A strategic and sustainable ZEV transition pathway needs to be based on three key economic pillars:
- Value addition: The Indian automotive industry remains a key contributor to national GDP (~8%). As per recent estimates, with localization of electric powertrains and battery pack assembly, India can see close to 6% higher output value addition for the auto industry, in a scenario where EVs make up 30% of passenger vehicle sales (CEEW 2019), which can be greater across all vehicle segments.
- Employment generation: The Indian automotive sector employs over 30 million across the value chain. While the concept of Just Transitions in gaining momentum in India in the coal mining sector, it is imperative that these principles be applied to the domestic automotive sector as well to contain livelihood impact during a ZEV transition.
- Manufacturing competitiveness: Given the significant share of MSME clusters in the Indian automotive manufacturing landscape, clear supply side regulations and a pathway for a ZEV transition will provide much needed market certainty, and the flow of technology and capital to facilitate a broader industry transition, driven by higher economic value-add and in turn, fueling growth for the long term.
The California India ZEV Policy Collaboration will aim to greatly elevate the amount of information and research brought to the transportation decarbonization policy process in India, linked to real-world global and national policy priorities, providing an opportunity to engage policymakers globally in well-orchestrated efforts.