Govt's EV policy is an 'aggressive' push towards EV adoption, says Pawan Goenka

Goenka spoke about government's new EV policy, India's EV penetration, investments in the sector, on EV 2W, and more.

Pawan Goenka, former MD at Mahindra & Mahindra, feels the new electric vehicle (EV) policy by the government is an 'aggresive' push by the Centre for its adoption. "The government has been pushing electric vehicles very aggresively in the last 5-6 years," he said in an interview with CNBC-TV18. During the interaction, Goenka touched upon the government's new EV policy, India's EV penetration, investments in the sector, on EV 2W, and more.

Speaking about passenger vehicles in the EV segment, Goenka said, "We have had good progress in three wheelers and decent progress in 2 wheelers. In the passenger vehicle (PVs) segment, the needle hasn't moved that much. We have only reached 2 percent, where globally the EV penetration is at 15 percent."

He feels the new EV policy may accelerate the adoption of electric PVs. "This probably is the step which may accelerate the adaptation of electric PVs in India. If we get 2-3 Greenfield plants at $500 million per plant, I think we will see lot more EV penetration," Goenka said.

The Centre on March 15 announced that a scheme has been approved to promote India as a manufacturing destination so that electric vehicles (EV) with the latest technology can be manufactured in the country. "The policy is designed to attract investments in the e-vehicle space by reputed global EV manufacturers," said Ministry of Commerce & Industry in a statement.

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On the present and new incumbents, he said that the govt has put enough guard rails in terms of investment, volume, reduction in duty. "...hence I think its a balanced move. It is good enough for the new incumbents to come in and establish a plant here and because the price level is high enough, the current incumbents shouldn't feel much pressure," he said.

Goenka lays out reasons why EV penetration is less than 3% in India

As per Goenka, some of the reasons are:

1. Charging infrastructure

2. Limited number of products, and

3. Not enough localisation

Goenka also does not think that Mahindras and Tatas, who are working on new products, will be at a disadvantage compared to anyone who comes in. "Dont undermine the ability of Indian players to be able to compete with whoever comes in because of this policy," he said.

'Good 2-wheeler penetration in the next 2-3 years'

Goenka said scale is coming in and hence there will be an increase in localisation, which will drive the prices down. "Secondly, the bigger players are coming in more aggressively in this segment. At the Bharat Mobility show, a good range of products were displayed. Given this increase, we will be able to see good 2-wheeler penetration in the next 2-3 years," he added.

Also Read | EV policy likely to attract Tesla, BYD, VinFast and global OEMs, claim industry analysts

India’s electric two-wheeler sales increased by nearly 24 percent Year-on-Year (YoY) to 81,963 units in February of 2024 and crossed 800,000 units in the 11-month period of FY24.