Change is coming to India’s transportation industry for the better due to the rising demand for electric vehicles (EVs). With schemes like the FAME initiative, the country is set to become a leader in terms of manufacturing and exporting EVs. Enormous developments are right around the corner, and together with national players looking towards expanding their EV range, global companies are focusing more on India to meet their expansion goals.
Why? That’s because the Indian automotive industry’s complete ecosystem encompassing 2 wheelers, commercial fleets, and cars is set to undergo an EV revolution. It is a big gamble with an even bigger payout. Multiple international organizations see an opening to partner with the Indian government to release 80 million EVs on the streets by 2030, so the race is on.
But what does that mean for a regular customer? How does India counter its plans of releasing an influx of EVs with the current electricity situation and infrastructure limitations? Let’s dive deeper into this topic and witness how global organizations are entering India’s fast growing EV market.
The Fast Developing Scenario of EV Market in India
The country that has the fastest growing market as per the statistics available as of 2023 seems to be India. The electric vehicles percentage growth was 49.25 percent in the year 2023 and the number of units sold were 1.52 million. Multiple factors are driving this growth:
- Government support: One of the most beneficial factors is the subsidies received under the FAME II scheme.
- Rising pollution: More and more people around cities are concerned about their environmental impact so they are switching to less polluting options.
- Technology growth: EV technology has improved in terms of providing better batteries which last longer, can be charged quickly and perform well.
- Economics of EV: The initial investment might be higher than the traditional internal combustion engine (ICE) vehicles but the running costs are drastically lower making the EV affordable in the long run.
Reports state that the Indian electric vehicle market will expand from US$ 3.21 billion in 2022 to US$ 113.99 billion in 2029 with an impressive CAGR of 66.52 percent. But the real shift? Private cars will have 30 percent of EV sales, commercial vehicles will have 70 percent, and two- and three-wheelers will have 80 percent by the year 2030, according to the government. That makes India one of the best countries in which to sell EVs.
Key Statistics at a Glance
| Metric | 2022 | 2029 (Projected) |
| EV Market Value (US$) | 3.21 billion | 113.99 billion |
| EV Sales (Units) | 1.52 million | 80 million (by 2030) |
| EV Battery Market (US$) | 16.77 billion | 27.70 billion (by 2028) |
| CAGR | 66.52% | – |
Global Brands Enter the Arena
Why India?
For global automakers, India represents an enormous opportunity. The country is the fifth largest automobile market in the world but is expected to be the third largest by 2030. Steady increase of the middle class together with the strong usage of EVs as supported by the government makes India an attractive market for global players.
Also, India is not like the developed markets where EV uptake is almost at saturation; this posits that there are opportunities for new ideas, collaborations, and market entrance. Global brands are not only marketing cars, but are also putting money into the local manufacture and assembly, setting up partnerships, and establishing the charging plans.
Major Players in Indian EV Automotive Market
Several foreign car companies have also occupied the Indian EV market to a large extent. Let’s look at some of the big names:
1. Tesla
India has been waiting for the entrance of Tesla for quite a while now. While the company has had problems in rotating around regulations in the past, it has begun working adequately on it. The initial offerings of Tesla India are expected to be Model 3 and Model Y, based on plans to manufacture local plants.
2. BYD (Build Your Dreams)
The Chinese EV giant BYD has made rapid advancements within the Indian region. In 2023, BYD India made its debut in the Indian luxury sedan sales market with its electric sedan BYD SEAL, which has enjoyed a warm reception. Some of the offerings the company has are the BYD Atto 3 and All-New e6 models for the commercial and private sectors.
3. Ola Electric
Despite not being a conventional global player, Ola Electric failed to go unnoticed in India’s e-vehicle market. Cheap electric scooters are already produced by the company with an expectation of producing cars before 2025. More so, Ola is investing in a lot of charging infrastructure and battery manufacturing.
4. Hyundai
Hyundai Motor India plans to reach out to wider audiences and make the country’s ultra-fast EV charging network easily accessible. With the likes of Hyundai Kona Electric and upcoming Ioniq 5, the brand Hyundai is aiming to become a high end electric vehicle selling company.
5. MG Motor
MG Motor hails from one of the first batch of companies to tap into the EV market in India as counting of its ZS EV sales began. This isn’t going to be the end for the company as they also express intent to launch further models at a lower price range.
Challenges Facing the EV Market in India
Although the future appears to be promising, the path for EV adoption in India is not devoid of bumps. There are several factors that remain to be addressed for the market to achieve its maximum potential.
1. Charging Infrastructure
As of February 2024, India has 12,146 public EV charging stations that are operational, but this appeals to only a fraction of the users. As per a CII report, in order for India to stand by its EV commitment by 2030, 1.32 million additional stations will be necessary. With this particular data, there is an implication that the country must build more than 400,000 charging stations every year.
India’s EV infrastructure isn’t very equitable even though Maharashtra and Delhi are spearheading the movement. Brands like Tata Power, Hyundai, and many others have invested and are providing services for ultra-fast EV chargers but that is far from satisfactory considering the situation.
2. Cost of Purchase
Even though EV running cost and electricity costs are low in the long term range, the cost to buy the car is still a barrier that many Indian customers are unable to cross. This particularly applies for the case of electric cars, it is much more expensive in comparison to combustion engine cars. The government through FAME II implements measures to incentivise consumers through subsidy but still cannot make mass production affordable.
3. Indigenous production
If India aspires to dream to be an EV giant, the country has to prioritize manufacturing EVs within the country. Any ‘Make in India’ campaign would only be able to place focus on those brands which would be willing to manufacture within India while barriers such as high import duty on batteries and critical structure necessitates to resolve.
Support from Government – A Game Changer
The Indian government has been a major force in fostering the shift towards EV adoption. The FAME II scheme, initiated in 2019, has spent more than US$ 1.43 billion as an outlay for electric vehicles and charging stations. Furthermore, the state has also offered tax credits, customs duty security for the EV constituent, authority of switching out diesel buses for electric buses in the near future.
The 30% electric mobility by 2030 objective, set by the government, is believed to be merely a dream however it comes off as powerful. With the battery swapping station coming into existence, incentives for the EV producers, and various level government aid programs a strong base is crafted for the electric vehicle ecosystem.
Key Government Initiatives
- FAME II Scheme: Subsidies for the sale of 1.34 million EVs and the setting up of charging stations.
- Battery Swapping: In order to address the challenge of charging time, IOC and Sun Mobility have launched battery swapping stations.
- State-Level Policies: States such as Maharashtra, Karnataka, and Gujarat have introduced policies that are focused on EV and promote both buyers and manufacturers.
Demystifying India’s EV Space – What’s On The Horizon?
1. Battery Chemistry
One of the critical aspects that has many influences has to do with innovation in the EV space, which is battery technology. Companies such as Exide Industries and Tata Chemicals invest quite some amount of money into R&D so as to invent cheaper batteries which are also longer lasting and more efficient. The addressable market for EV batteries in India is expected to expand from US$ 16.77 billion in 2023 to US$ 27.70 billion by 2028.
2. Public Transport
The Indian government is also working on electrifying the public transport system and plans on scaling up commercial adoption, whereas most of the attention has been concentrated on private EV penetration. There are several companies such as Ola Electric and Mahindra who are working on electric auto rickshaws, and buses and cargo distributed vehicles which will penetrate the market in time.
3. Urban structures
Collaborations between international and local businesses will contribute to the creation of blockchain based electric vehicle apps aimed at enhancing the electric vehicle user experience while converting the whole system into a decentralized mobility app designed for integration with electric vehicle charging stations, renewable energy sources, and intelligent city planning.
To sum up – The journey towards a better future
With both international and domestic players entering and focussing on the Indian market, There is an indication that the Indian electric vehicle market is at an inflection point. While challenges remain, the country’s focus on sustainability, innovation, and infrastructure development makes it an attractive destination for EV investments.
The Indian electrical car market is set to become wide, not only can one find economy two wheelers up to luxury sedans, the Indian market is also going to be one of the key leaders in worldwide EV development.
