Infra, Policy Key to Accelerating EV Adoption in India’s $5 Trillion Vision: KPMG in India-CII Report

NEW DELHI: In a landmark move to address the challenges of urban mobility and environmental sustainability, KPMG in India and the Confederation of Indian Industry (CII) have jointly released a report titled “Enabling Infrastructure Changes Through Policies for Growth of EVs.”

The report arrives at a critical juncture in India’s development trajectory, as the country prepares to transition from a $3.7 trillion economy to surpassing the $5 trillion mark within the next three years, positioning itself as the third-largest economy globally.

While the automotive sector is a key driver of this economic growth, it is also a significant contributor to the nation’s rising oil import bills and carbon dioxide emissions.

The report positions electric vehicles (EVs) as the cornerstone of India’s strategy to balance growth with environmental responsibility, aligning with its COP26 commitment to transition to 100% zero-emission vehicles by 2040. The momentum is already evident, with EV sales reaching 1.2 million in FY24 and a market penetration of 5%.

Jaideep Ahuja, Chairman of CII Delhi State and Managing Director & CEO, Ahuja Residency Pvt Ltd, emphasized the transformative potential of electric mobility, particularly in Delhi. “The transition to electric mobility represents a pivotal shift towards a cleaner, more sustainable future. As one of the most populous and dynamic regions in India, Delhi has the potential to lead this transformation and set an example for the nation. The Confederation of Indian Industry (CII) Delhi State is deeply committed to championing the growth of the EV sector, recognizing its vital role in addressing urban mobility challenges, reducing emissions, and fostering economic growth,” he stated.

He further outlined key priorities, including encouraging investments in charging networks, enabling public-private partnerships, and equipping the workforce with skills to meet the demands of a growing EV ecosystem.

The report outlines a holistic approach to accelerating EV adoption, anchored on four interconnected pillars: physical, power, economic, and social infrastructure. Together, these pillars form a roadmap for addressing current challenges while creating a robust ecosystem to sustain future growth.

A key focus of the report is on developing physical infrastructure to support EVs. The lack of adequate charging networks, exacerbated by high setup costs ranging from ₹15-20 lakhs for a 60kW charging station, has deterred large-scale expansion.

Compounding this issue is the fragmentation caused by multiple incompatible connector types, such as CCS, CHAdeMO, and Bharat AC/DC-001, which results in underutilization of existing infrastructure. The absence of a unified platform to locate and access charging stations further hampers consumer confidence. The report stresses the urgent need to address these barriers to build a seamless charging network nationwide.

India’s power infrastructure also plays a vital role in facilitating the EV transition. With an installed capacity of 430 GW and an additional 156 GW under construction, the country’s energy system appears well-prepared to meet the modest 1-2% increase in demand anticipated from EVs at a 30% market penetration by 2030.

However, the push for fast-charging stations brings technical challenges such as voltage fluctuations and power quality issues, particularly in urban centers. The report emphasizes the importance of integrating smart grid technologies and renewable energy sources, such as solar power, to ensure that distribution networks can handle this demand efficiently.

Economic infrastructure is another cornerstone of the strategy, with the report highlighting the inverted GST structure as a significant hurdle. While EVs are taxed at 5%, components such as batteries attract rates between 18-28%, creating financial strain on manufacturers and service providers. A uniform GST rate of 5% would ease working capital burdens, promote battery leasing, and reduce costs for end users. Additionally, improving financing options for EV buyers by including them in priority sector lending and fostering partnerships between financial institutions and innovative companies could make electric mobility more accessible to the masses.

The transition to electric mobility also necessitates significant investments in social infrastructure. The report points out that the evolving automotive value chain will require new skill sets, particularly in areas like battery recycling and charge-point operation. As traditional automotive roles undergo transformation, initiatives like reskilling programs and the introduction of EV-specific courses in Industrial Training Institutes (ITIs) will be essential. To address public apprehension about costs, safety, and resale value, sustained awareness campaigns, combined with tangible incentives such as toll exemptions and reserved EV parking, are recommended to foster greater acceptance.

Raghavan Vishwanathan, Partner-Automotive at KPMG in India, highlighted the broader implications of the EV revolution. “This is more than just a shift to zero-emission transportation; it’s a systemic transformation of infrastructure, finance, technology, and mindsets. India stands at a pivotal moment to lead the global transition through strategic policies, public-private partnerships, and forward-thinking investments. By addressing infrastructure gaps, creating affordable pathways for consumers, and building societal trust in EVs, India can set a global benchmark for sustainable mobility, green growth, and inclusive prosperity,” he remarked.

The report concludes with actionable recommendations to streamline EV charging standards, strengthen distribution networks, and align taxation policies to promote EV adoption. As India accelerates its transition to electric mobility, this vision promises to not only drive economic growth but also position the country as a global leader in sustainable development. With collaborative efforts among policymakers, industry leaders, and the public, the dream of a cleaner, greener India is well within reach.