The electric vehicle (EV) industry is experiencing rapid growth, driven by the global shift towards sustainability and green transportation. However, as demand for EVs increases, so does the pressure on supply chains to adopt sustainable practices. In India, where EV adoption is gaining momentum, companies are addressing these challenges through cleaner production processes, better battery recycling, and ethical sourcing. The Indian government’s policies further support these efforts, ensuring that sustainability remains a core focus of the EV sector.
The Need for Sustainable Supply Chains
The EV industry’s biggest challenge lies in sourcing materials for batteries, including lithium, cobalt, and nickel. According to the International Energy Agency (IEA), the demand for minerals used in EV batteries is set to increase by 10 times by 2040, depending on the speed of EV adoption (IEA, 2023). While these minerals are essential, their extraction often leads to environmental degradation and ethical concerns, including child labor and unsafe working conditions.
In response, Indian companies are working towards reducing the environmental impact of their supply chains. This involves adopting cleaner methods for material sourcing, improving recycling capabilities, and exploring alternatives to critical raw materials like cobalt.
The Role of Indian Government Initiatives
The Indian government has made significant strides in promoting EV adoption and supporting supply chain sustainability. The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, launched in 2015, has been crucial in providing financial incentives for the production and purchase of EVs. Under the FAME-II phase (2020-2024), the government allocated ₹10,000 crore (approximately $1.3 billion) to promote EV manufacturing and charging infrastructure (Ministry of Heavy Industries, 2020).
Additionally, the Production-Linked Incentive (PLI) Scheme for Advanced Chemistry Cell (ACC) battery storage, introduced in 2021, aims to reduce India’s reliance on imports for critical EV battery components. The scheme offers incentives to companies investing in battery manufacturing. By reducing dependency on foreign suppliers, this initiative not only strengthens the supply chain but also supports sustainable practices in battery production.
Battery Manufacturing and Recycling
As the EV market grows, battery production and disposal present significant environmental challenges. This has led to companies seeking innovative ways to recycle batteries and reduce waste.
Battery manufacturers in India are focusing on creating batteries that are longer-lasting and recyclable, thereby reducing the demand for new raw materials. Additionally, companies are collaborating with recycling companies to improve the efficiency of battery disposal and reuse, contributing to a circular economy. According to the Indian Ministry of New and Renewable Energy (MNRE), the government aims to establish an EV battery recycling ecosystem, ensuring that of lithium-ion batteries are recycled effectively.
Energy-efficient Manufacturing
In India, the National Solar Mission has made solar energy more accessible, and EV manufacturers are leveraging this to power their factories sustainably. Companies are incorporating clean energy into their manufacturing processes, reducing the carbon footprint of their batteries. India’s EV industry is undergoing a rapid transformation, supported by both government initiatives and innovations from companies addressing sustainability at every step of the supply chain. From cleaner battery production and improved recycling to ethical sourcing and energy-efficient manufacturing, Indian EV companies are setting the stage for a greener, more sustainable future. By continuing to prioritize sustainability in their supply chains, India can emerge as a leader in the global electric vehicle market.
