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India’s electric vehicles (EV) market is expected to grow to one crore units annual sales by 2030 and create five crore direct and indirect jobs, according to the Economic Survey 2022-23.

The Survey tabled in Parliament on Tuesday said that in December 2022, India became the third-largest automobile market, surpassing Japan and Germany in terms of sales.

“The automotive industry is expected to play a critical role in the transition towards green energy. The domestic electric vehicles (EV) market is expected to grow at a CAGR of 49% between 2022 and 2030 and is expected to hit one crore units of annual sales by 2030,” it said.

As per industry estimates, the total EV sales in India stood at around 10 lakh units in 2022.

Further, the Survey said, “The EV industry will create five crore direct and indirect jobs by 2030. To support and nurture this development, the government has undertaken multiple steps.”

The pre-Budget document also highlighted that the automobile sector is a key driver of India’s economic growth.

In 2021, India was the largest manufacturer of two-wheeler and three-wheeler vehicles and the world’s fourth-largest manufacturer of passenger cars.

“The sector’s importance is gauged by the fact that it contributes 7.1% to the overall GDP and 49% to the manufacturing GDP while generating direct and indirect employment of 3.7 crores at the end of 2021,” it said.

Under the government’s Faster Adoption and Manufacturing of Electric Vehicles (FAME) II scheme, between 2019 and 2024, with a budget outlay of Rs 10,000 crore, the Survey said the scheme incentivised 7.1 lakh EVs, sanctioned 7,210 e-buses, out of which 2,172 e-buses have been deployed until December 2022.

The scheme had envisaged supporting one million two-wheelers, 0.5 million three-wheelers, 55,000 cars, and 7,090 buses.

The Survey also pointed out the rising sales of auto components.

According to the Automotive Component Manufacturers Association of India (ACMA), the auto components industry witnessed a 34.8% growth to Rs 2.65 lakh crore in the first half of 2022-23, riding on domestic demand, particularly from the passenger vehicles segment.

During the period, exports of components grew by 8.6% to $10.1 billion (Rs 79.03 lakh crore), while imports climbed 17.2% to $10.1 billion (Rs 79.8 lakh crore).

The industry clocked a turnover of Rs 4,20,621 crore in 2021-22, up from Rs 3,40,733 crore in 2020-21.