India Poised To Lead Global EV Market, Boosting Business Sustainability

As India positions itself to become the world's largest Electric Vehicle (EV) market by 2030, surpassing China and the United States, a transformative era unfolds for businesses across all sectors. This shift presents an opportunity for companies to revolutionise their approach to ESG strategies and contribute to a greener future. The rapid adoption of EVs is not just reshaping India's energy and transportation sectors but also offering a blueprint for corporate sustainability. Moreover, it is paving the way for a cleaner environment and reduced carbon footprint.

In today's corporate landscape, the significance of ESG goals cannot be overstated. A strong ESG performance can stimulate long-term growth, draw in investment, improve brand recognition and aid in talent attraction and retention. As stakeholders increasingly demand responsible and transparent business practices, ESG provides a framework for companies to demonstrate their commitment to these ideals. Shifting to EVs emerges as a compelling starting point in this journey towards sustainability.

Integrating ESG priorities

Every organisation has the potential to contribute significantly to a greener future by integrating ESG priorities into their operations, partnerships and overall strategy. Furthermore, sustainable practices must be embedded throughout the organisation, driven from the top down, to ensure impactful change. For non-EV manufacturers, the opportunities lie in the integration of EV technology into existing ESG strategies. This includes offering incentives for EV adoption among staff, prioritising supply chain partners who use EVs in their operations, partnering with EV manufacturers to offer employee leasing programmes, and contributing to the national charging network.

Meanwhile, fleet electrification, including company cars and options for employee commuting, stands out as a strategic move towards achieving net-zero targets and ESG goals. By transitioning to electric fleets, companies can impact ESG metrics in several ways. Environmentally, it reduces carbon footprints and dependency on fossil fuels while improving energy efficiency. Socially, it contributes to improved public health through reduced emissions and noise pollution. From a governance perspective, it demonstrates proactive risk management in response to increasing emissions regulations.

Several Indian companies have joined the global EV100 initiative, committing to transition to 100 percent electric fleets by set deadlines. To support this shift, companies are aligning with central and state government policies and investing in EV charging infrastructure on their campuses. Additionally, businesses must collaborate to educate their suppliers and partners about the benefits of EV adoption. This will create a ripple effect that promotes sustainability throughout their supply chains.

Government initiatives: A springboard for corporate action

India's commitment to the global EV30@30 campaign, aiming for 30 percent of new vehicle sales to be electric by 2030, sets the stage for widespread corporate involvement. The government's FAME (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles) scheme has already subsidised the sale of millions of electric vehicles, from four-wheelers to motorcycles. This initiative, along with programmes such as PM e-Bus Sewa for public transport, creates a supportive ecosystem for businesses to transition to electric mobility. As the government proposes FAME-III and focuses on expanding charging infrastructure, companies have an opportunity to benefit from this green revolution.

Environmental and economic benefits

Notably, integrating EVs into ESG objectives helps not only in reducing emissions but also in enhancing air quality and reducing costs. Unlike gasoline engines, EVs eliminate smog-forming emissions such as nitrogen oxide, carbon monoxide, and formaldehyde. They contribute to a healthier environment, especially in densely populated Indian cities, by producing zero tailpipe emissions and providing excellent power conversion efficiency.

Economically, the move to EVs translates to reduced operational costs for businesses through fuel savings and lower maintenance expenses. Besides, the projected growth of the EV market in India, expected to reach 10 million units in annual sales by 2030, creates abundant opportunities for companies to innovate and develop new revenue streams in areas such as battery technology, energy storage, and smart grid solutions. This shift not only aligns with ESG goals but also positions businesses at the forefront of a rapidly evolving and lucrative industry.

To fully realise the ESG potential of electric vehicles, modernising the EV grid to align with green technology goals is essential. Technological advancements, especially battery innovation and sustainable disposal methods, are critical for improving performance and ensuring environmental sustainability.

Meanwhile, challenges such as range anxiety and high initial costs present opportunities for cross-sector collaboration. Financing institutions can devise innovative funding models for EV adoption, technology companies can develop cutting-edge battery solutions to reduce charging times, and healthcare companies can investigate the benefits of lower emissions. Furthermore, consulting and professional services firms are uniquely positioned to guide clients through this complex transition, offering expertise in strategy, implementation, and ESG performance optimisation.

Combining an EV migration strategy with renewable energy sources can significantly accelerate their impact. By using clean energy to power EVs, companies can reduce their carbon footprint and more effectively achieve their sustainability goals. This integrated approach ensures that the shift to electric mobility not only addresses transportation emissions but also promotes the broader adoption of renewable energy. This will lead to a more sustainable and resilient energy ecosystem.

By working together, we can create a robust framework that will boost the growth of the EV industry while significantly improving the ESG performance of businesses.

(Rohit Bhagwat is the office managing principal and global ESG committee member of ZS)