India’s Path to Sustainable Mobility: EV and circular economy practices

Electric vehicles (EVs) are playing a central role in India’s move towards sustainable mobility. With 1.61 million units sold in the first 10 months of 2024, EV sales in India have already set a record. EVs offer a promising solution to the country’s air pollution and carbon emissions, with zero tailpipe emissions that significantly reduce local air pollution, especially in urban areas.

Government policies, such as subsidies, tax breaks, and the expansion of charging infrastructure, have been crucial in fostering the EV ecosystem. By 2030, India aims for 70% of commercial vehicle sales, 30% of passenger vehicles, 40% of buses, and 80% of two- and three-wheelers to be electric. This shift is already being seen in the market, with an increase in the adoption of electric two- and three-wheelers, which are more affordable and suited to short-distance travel in cities. As technology improves, EVs are becoming more accessible, attracting a broader demographic.

However, challenges remain. The high upfront cost of EVs, limited charging infrastructure, and concerns about battery longevity and disposal must be addressed for widespread adoption. Moreover, while EVs are emissions-free during operation, their production relies on raw materials like lithium, cobalt, and nickel, which raise environmental and social concerns. Responsible sourcing and effective battery recycling are crucial to ensuring the long-term sustainability of India’s EV market.

New Paradigm for the Auto Industry

While EVs provide a promising solution, sustainability in the automotive industry cannot be achieved through adoption alone. Circular economy practices—emphasising the reuse, remanufacturing, and recycling of materials—are essential to ensuring long-term sustainability in vehicle production and consumption.

The traditional "take-make-dispose" model of production leads to significant waste and resource depletion. Circular economy principles aim to minimise waste by promoting the recycling of vehicle parts, reducing reliance on virgin raw materials, and repurposing materials like steel, aluminium, and plastics. In India, where resource conservation is critical due to growing material demand and manufacturing environmental pressures, incorporating circular economy practices into the automotive industry can make a significant difference.

Incorporating these principles can also offer economic benefits. By recycling vehicle parts, the automotive industry can reduce dependence on expensive raw materials, lower manufacturing costs, and create a more resilient supply chain. Furthermore, India’s increasing vehicle fleet and growing number of end-of-life vehicles (ELVs) present an opportunity to develop a well-organised recycling ecosystem. The government’s Voluntary Vehicle Modernisation Programme (VVMP) could encourage vehicle scrapping and facilitate the recovery of valuable materials from old vehicles.

Adopting Circular Economy in the Auto Sector

Several countries have successfully integrated circular economy practices into their automotive industries. Germany has implemented efficient vehicle recycling systems, ensuring that most parts of a vehicle are recovered and reused. Japan has set ambitious recycling targets, and China is focusing on waste reduction and resource recovery to foster sustainable industries.

By adopting similar circular economy practices, India can reduce its reliance on imported raw materials, lower production costs, and create new employment opportunities in the recycling and remanufacturing sectors. This approach would also help to conserve resources and reduce waste, fostering a more sustainable automotive sector.

An Integrated Approach to Sustainable Mobility

True sustainability in India’s automotive ecosystem requires integrating both electric mobility and circular economy principles. The two strategies complement each other. For example, as EV adoption increases, sustainable methods for handling EV batteries become more pressing. Recycling EV batteries can reduce the demand for new raw materials and address environmental issues related to disposal.

Vehicle manufacturers can also adopt circular design practices to make disassembly and recycling easier at the end of a vehicle’s life cycle. Such practices might include designing vehicles for easy component removal and using materials that are recyclable or reusable. Government initiatives like the VVMP can promote vehicle scrapping, reducing outdated, inefficient vehicles while enabling the recovery of valuable materials.

This integrated approach offers several benefits. It can create new jobs in recycling and battery technology, stimulate local industries, and reduce reliance on imported materials. Circular economy practices can also lower production costs, benefiting both consumers and manufacturers. At the same time, EV adoption will contribute to cleaner air and reduced carbon emissions, aligning with India’s sustainability goals.

Moving Toward a Sustainable Future

India’s path to sustainable mobility lies in a holistic approach that embraces both EV adoption and circular economy practices. By integrating these strategies, the country can address its immediate environmental challenges and foster long-term economic growth. The combined efforts of the government, manufacturers, and consumers will be key to creating a sustainable automotive ecosystem.

As India progresses, continued investment in infrastructure, public awareness, and innovation will be critical to making this vision a reality. Through strategic planning and collective action, India can create a cleaner, more efficient automotive sector that contributes to both environmental responsibility and economic prosperity.

By combining EV adoption with circular economy practices, India can lead the way toward a more sustainable and economically prosperous automotive future. This integrated approach will not only address environmental concerns but also foster economic resilience and job creation, ensuring that India’s automotive industry remains competitive in the global marketplace.

(Naoya Nishimura, CEO, Musashi - India and Africa.)

Views are personal, and do not represent the stand of this publication.