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Addressing the growing challenge of EV battery waste through circular economy solutions is essential to ensure that India’s sustainability goals are met without creating new environmental burdens
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India's swift urban expansion has coincided with a substantial increase in vehicle ownership, with passenger vehicle registration soaring from approximately 2.6 million in 2001 to over 3.95 million by 2024. This exponential surge in vehicular density, particularly within metropolitan areas, has generated considerable transportation-related externalities. Primary among these are escalating levels of air pollution, greenhouse gas emissions, and traffic congestion. While the transport sector is responsible for approximately 12 percent of India’s total carbon emissions, per capita emissions from road transport have risen by 2.5 times since 2000. Furthermore, urban air quality degradation has emerged as a critical public health crisis, as evidenced by the presence of 83 of the world's 100 most polluted cities in India as of 2023.
In this context, the decarbonisation of urban transport represents both a critical policy mandate and an urgent environmental necessity. The widespread adoption of Electric Vehicles (EVs) offers a promising pathway towards achieving this objective. Possessing zero tailpipe emissions, EVs have the potential to significantly mitigate urban air pollution and substantially reduce the carbon footprint associated with mobility. Recognising this transformative potential, India has initiated ambitious programmes such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme version I and II, alongside various state-level EV policies, to accelerate the transition towards cleaner, more sustainable urban transportation paradigms.
The electrification of the transportation fleet has emerged as a crucial strategy in mitigating greenhouse gas emissions and addressing severe atmospheric pollution. In 2024, electric vehicle (EV) sales in India surpassed 2 million units, indicating a 24 percent year-over-year increase and securing an 8 percent share of the total vehicle market. This notable expansion is largely attributable to the widespread adoption of electric two-wheelers and three-wheelers, which currently dominate the EV market segment due to their economic viability and suitability for urban commuting requirements.
India has initiated ambitious programmes such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme version I and II, alongside various state-level EV policies, to accelerate the transition towards cleaner, more sustainable urban transportation paradigms.
Governmental initiatives have played a pivotal role in accelerating the embrace of EVs. The FAME scheme, particularly its second phase (FAME II), inaugurated in April 2019 with an allocation of INR 10,000 crores, has extended substantial fiscal incentives for the procurement of electric two-wheelers, three-wheelers, and public transport buses. By February 2025, FAME II had facilitated the deployment of over 1.6 million EVs, comprising 1.428 million two-wheelers, 164,000 three-wheelers, and 22,548 four-wheelers.
Looking forward, India's EV market is positioned for substantial expansion. Projections suggest that EV penetration could exceed 40 percent by 2030, driven by sustained policy support, continuous technological innovations, and heightened consumer awareness.
The rapid adoption of electric vehicles offers significant potential to reduce tailpipe emissions and decarbonise urban transport, but it also introduces a range of challenges from a circular economy perspective, particularly for developing sustainable cities. These challenges are outlined below.
Insufficient Battery Recycling Infrastructure: India's current infrastructure for battery recycling presents a considerable constraint, possessing an annual processing capability slightly exceeding 2 gigawatt-hours (GWh). This capacity is demonstrably insufficient to accommodate the anticipated substantial increase in end-of-life electric vehicle (EV) batteries projected by the year 2030. This imbalance poses a critical impediment to the successful realisation of a circular economy model for essential battery components within the nation.
Prevalence of Unorganised Recycling Operations: A significant proportion of electronic waste, encompassing end-of-life electric vehicle batteries, is currently managed by the informal recycling sector in India, accounting for over 90 percent of such materials. These unregulated operations frequently employ methods that pose substantial environmental contamination risks and present considerable health hazards to workers. Furthermore, the processes utilised by this sector often lead to an irreversible loss of valuable constituent materials, which could otherwise be effectively reclaimed and re-integrated into the supply chain through formalised recycling methodologies.
Lack of framework for collection and segregation of EV wastes: A significant challenge lies in the absence of comprehensive and efficient frameworks for the collection and meticulous segregation of end-of-life battery units. It is noteworthy that a considerable proportion of EV batteries retain substantial energy storage capacity—often exceeding 70 percent of their original capacity—even after their primary automotive application concludes. This residual capacity presents a compelling opportunity for repurposing these units for diverse "second-life" applications, including grid-scale energy storage, enhancing rural electrification initiatives, or serving as reliable backup power systems.
Environmental and Resource security concerns: The inappropriate discarding of EV batteries presents substantial risks, potentially leading to widespread environmental pollution and posing considerable health hazards stemming from the liberation of deleterious chemical compounds. Furthermore, the inability to effectively reclaim vital raw materials such as lithium, cobalt, and nickel not only compromises India's long-term resource autonomy but also significantly impedes the overarching sustainability objectives of its transition towards electric mobility.
Addressing the multifaceted circular economy challenges presented by EV waste streams in India necessitates the development and implementation of a robust and integrated policy framework. With the rapid acceleration of EV adoption across the nation, the volume of end-of-life (EoL) batteries is anticipated to escalate considerably. Projections indicate that approximately 128 GWh of lithium-ion batteries will become available for recycling by the year 2030, with a significant proportion—around 46 percent (or approximately 59 GWh)—attributable directly to EVs.
Government has articulated ambitious objectives aimed at material recovery, targeting a 90 percent retrieval rate for EV battery components by 2027. Concurrently, a mandate stipulates that newly manufactured batteries must incorporate a minimum of 20 percent recycled materials by 2030
In recognition of these imminent challenges, the Government of India promulgated the Battery Waste Management Rules in 2022. These regulations institute the principle of Extended Producer Responsibility (EPR), thereby obligating battery producers to facilitate the comprehensive collection and subsequent recycling or refurbishment of spent batteries. Crucially, the regulations explicitly prohibit the disposal of batteries in landfills and through incineration, thereby promoting environmentally sound management practices for battery waste.
Furthermore, the government has articulated ambitious objectives aimed at material recovery, targeting a 90 percent retrieval rate for EV battery components by 2027. Concurrently, a mandate stipulates that newly manufactured batteries must incorporate a minimum of 20 percent recycled materials by 2030. These strategic directives are designed to diminish the nation's reliance on imported raw materials and to cultivate a self-sustaining circular economy within the battery sector.
To bolster these critical initiatives, substantial capital investment in sophisticated recycling technologies and supporting infrastructure is indispensable. The formation of public-private partnerships can prove instrumental in the establishment of cutting-edge recycling facilities. Additionally, cultivating a resilient "second-life" market for EV batteries offers a promising avenue for extending their utility. For example, the repurposing of retired batteries for applications such as grid energy storage and rural electrification projects presents viable and sustainable energy solutions.
In summation, an expansive and multi-pronged policy approach, encompassing rigorous regulatory reforms, strategic infrastructure development, and proactive stakeholder engagement, is fundamentally essential for the effective management of EV waste and the successful realisation of a circular economy in India.
Nandan H Dawda is a Fellow with the Urban Studies programme at the Observer Research Foundation.
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Dr Nandan H Dawda is a Fellow with the Urban Studies programme at the Observer Research Foundation. He has a bachelor's degree in Civil Engineering and ...
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