India’s EV Sector 2030: Plenty of Opportunities Abound for Indigenous Manufacturers

Indians are shifting towards EV keeping a sustainable future in mind:

India’s e-mobility sector is growing fast. The necessity for clean travel has been instrumental behind growing popularity of Electric Vehicles (EV) in the country. It has been projected that by 2030, there will be ten million EVs on the roads.

According to Market research of automobile industry in India, more than half of air pollution is caused by transport industry. Air pollution kills two million people annually in the world. This is why there is higher demand for clean transport, and EVs with no driving emissions appear to solve the problem best. There has been a significant increase in the choice for EVs by public. In India Internet expansion has also helped many residents learn about how air pollution is on a rise and there is a pressing need to solve the complex problem through swift action.

Consumers are aware that this country needs to reduce its greenhouse gas emissions and air pollution levels as it is only possible if EV come into play. Moreover, Indian market witnesses an increased demand for electric vehicles because they save money and thus there is a need for Feasibility of new auto manufacturing set up in India. Speaking of cost per kilometre travelled, a petrol/diesel car goes at Rs 7-8 while EV goes at around Rs 1-1.5 per kilometre

Growth of EV across segments: cars, 2 -wheelers, 3-wheelers

The Indian electric vehicle (EV) market is witnessing a strong growth in all segments, which include cars, two-wheelers and three-wheelers. For FY23, the overall sales of 1,670,736 units was registered, which is equivalent to a growth rate of 42.6% compared to FY22.

The strongest increase was noticed in Electric Two- Wheelers that rose by nearly half reaching 49% from FY22 for FY23 as stated by Feasibility study of EV manufacturing in India. In terms of registered vehicle sales, Ola Electric, Hero Electric and Okinawa Autotech are the top three players, accounting for over 45% market share.

(Source: GOI data, The India Watch Analysis)

Estimates are suggesting that the E3W segment will grow at an estimated YoY rate of around 70% in FY2023 when compared to FY2022. Mahindra & Mahindra tops the list followed by YC Electric Vehicle and Saera Electric.

Electric-4 Wheelers is a nascent segment with an expected growth of 116 percent in FY23 as opposed to FY22. The clear leader is Tata Motors capturing about 82.6% market share during year ending March’2023.

No. of units sold (category wise):

Factors that are driving adoption of EVs in India:

Indian Electric Vehicle (EV) Market is thriving as the Market research of automobile industry in India. Due to this fact, the Indian market for EVs is expected to reach $266bn by 2030 at an annual growth rate of around 94.4% as stated by Nitin Gadkari India’s Minister of Road Transport and Highways during an interview.

Mentioned below are the factors driving EV adoption in India:

- Changing tastes and preferences among consumers coupled with growing awareness have resulted in increased uptake of these cars by local users. India’s young tech generation is more embracing towards electric vehicles considering the future that they would like to have.

- Under FAME scheme sponsored by GOI, subsidies have been provided on purchase of EVs which has greatly reduced the upfront costs making them affordable for people. FAME II subsidy was capped at approximately 40% ex-factory price earlier

- The increase in fuel prices makes electric vehicles cheaper for a huge consumer base automatically. It will cost you between Rs 1 and Rs1.5 per kilometre if you use an electric vehicle thus it is pocket friendly compared to other alternatives

- Improvements in battery technology play a key role here, as there are new batteries with lower weight, faster charging, and higher energy density. According to Deloitte India survey, 72% Indians may purchase an electric car within two years. There comes need for Market research and feasibility study of automobile industry in India.

Government of India is pushing EV in India:

The Paris Agreement: It is the intention of GOI to change to electric vehicles by 2030. It is their hope that global warming will be limited to 1.5°C. The Paris Agreement had 192 countries including India as its members. For this reason, some green gas emissions are reduced by the agreement and it thus seems to promote using EVs. As such, subsidizing public transportation for two-wheelers, three-wheelers and buses has become a focus area of Indian government.

National Electric Mobility Mission Plan, 2020 (NEMMP): To achieve national fuel security improvement through hybrid and electric vehicle adoption, the Indian government introduced the plan in 2012. By 2030 NEMMP targets a penetration rate of electric vehicles of about 30 percent (The current is around 6%). Even though NEMMP 2020 initial sales target of six-seven million EVs was not fully fulfilled, there is strong growth within the Indian EV market. Get the Feasibility study of new EV manufacturing business in India done today.

Rapid Adoption and Manufacturing for Hybrid and Electric vehicles (FAME): This is a major step taken by the Indian government to encourage electric vehicles. This measure has been divided into two phases, FAME I (2015 – 2019) and FAME II (2019 – till date), which offer incentives on purchasing electric vehicles. The plan includes perks offered for buying plug-in hybrid and pure EVs of up to ₹29,000 per unit for two-wheelers and ₹1.38 lakh per unit for four-wheelers.

Go Electric campaign: In early 2021, the government rolled out its Go Electric drive aiming at encouraging the adoption of electric mobility devices. No registration fees were required for EVs, plus tax holidays were also suggested.

B2B segments in India is aggressively adopting EVs

E-Commerce Ventures: Companies such as Amazon, Flipkart, Zomato, Swiggy etc are moving aggressively towards E2W & E3W vehicles for their last-mile deliveries. This allows them to optimize operational costs. Additionally, programs such as FAME II entail incentives for electric commercial vehicles hence making them affordable. Similarly, Amazon and Flipkart also use electric trucks for its delivery in some Indian cities. By 2030 the report projects that the market of electric truck will be up to 10k units according to Frost & Sullivan.

Taxi Services: Moreover, there are ride-hailing companies entering EV sector. While existing firms like BluSmart and eee-Taxi dominate it now, Lithium Urban, Evera and Snap-E Cabs have all been well positioned for the future that lies ahead. OLA and Uber are increasingly incorporating EVs in major cities. Reports indicate that BlueSmart has reached a milestone of 7000 vehicles across India and is growing rapidly.

Charging infrastructure providers: Tata Power, Bolt, Ather offers charging infrastructures for EV Industry. For example, Bolt which is leading has already installed 23K fast & slow charge points.

Electric Vehicles Battery Companies: Indian EV battery business is currently booming due to rising demand of electrical automotive technology running on batteries. Indian government is also supporting indigenous battery business. Indian government has also introduced a PLI scheme of Inr 18,000 crores to support indigenous battery manufacturing.

Indian automakers showing interest in EV due to its long-term potential:

Future is electric cars. In the motor industry in India, there has been a huge shift towards EVs, hence all the major Indian automakers are rushing into the segment.

Tata Motors: This manufacturer leads in E4W field in India with 82.6% of market share as at FY23. There are many electric automobiles offered by Tata Motors such as Tata Nexon EV (most popular), Tata Tiago EV, Tata Tigor EV, Tata Punch EV. By FY23, they sold 59,580 units of their electric vehicles.

Mahindra and Mahindra: For some time now an old brand name among Indian carmakers has also begun growing in this ever-expanding sector of electrical mobility too. One such example of these growing numbers is the introduction of Mahindra XUV400 EV which is produced by Mahindra. This vehicle was able to clock 4201 units sold during FY23 with its sales forecast looking higher for 2024.

Maruti Suzuki: Nevertheless, India’s biggest automobile maker does not have any presence in the country within that class yet. It was announced last week that Maruti will be launching its first-ever SUV: Maruti’s EVX is due out sometime next year and reportedly up to six more models might follow before end decade

Electric 2-Wheeler:

Ola electric: Revealing that the company had over 54,000 registrations in March 2024 according to VAHAN, Ola Electric has become one of the main actors on the market of electric two-wheelers in India.

Hero electric: Also an established maker, it has been selling both high-speed and low-speed electric scooters. Prices range between Rs. 40,000 – 1,00,000.

Okinawa Autotech: Okinawa Autotech is a fast-growing E2W brand known for its stylish and feature-rich electric scooters that are low-speed and high-speed which are more performance and design oriented as a whole. The Company is spreading out across India with new dealerships.

Ather Energy: The brand name is famous for its cutting-edge technology and innovative design aspects too. Currently, Ather offers three models namely Ather 450X pro, Ather 450S and Ather 450X all of which have excellent quality features and good range.

Opportunities To Enter The Segment

Some of the key and fresh start ups to notice in the Indian EV segment as per Market research and feasibility study of automobile industry in India are:

1. E2W: Simple Energy, Revolt Motors, Bounce infinity.

2. E3W: Yulu and Moove Mobility.

3. E4W: Pravaig Motors.

4. Charge point startups: ChargeUp, VoltUp, Plug In India.

5. Battery pack startups: Cellcius Energy, Sun Mobility, Exide.

In India, the EV segment is growing very fast thereby creating tremendous opportunities for local businesses to join the market and grow. For example, there is a lack of charging points in the market which means that there are opportunity in the charging infrastructure segment. Although some startups are working on this issue, still demand is high. Such as you can have small local businesses setting up changing stations at strategic positions such as public parking lots, shopping malls, Office complexes, highway rest stops, large scale residencies.

Additionally, it could be an intriguing idea if they partnered with fuel stations to cater electric vehicles with fast charging facilities along with repair services and battery changing services also doing maintenance. Then come Component manufacturing like Battery management systems (BMS), Electric motors (EMs), Power electronics (PEs), Charging cables and connectors etc. EV maintenance and repair also has a significant and upward future.

Challenges which the EV industry in India is facing:

• High Initial Cost: The high initial cost of electric vehicles (EVs) compared to traditional vehicles is among the major obstacles. The report by BloombergNEF states that the average selling price of an electric vehicle in India in 2020 was roughly $20,000, a lot higher than that of a conventional internal combustion engine vehicle.

• Limited Charging Infrastructure: Absence of proper charging infrastructure is one major barrier to electric vehicle (EV) adoption. Unlike over 70,000 gas stations that exist across India as of January 2022, there were only about 2,000 public EV charging points. Since they are few and hardly located near highways; owners of EVs find it difficult to locate charging facilities especially during long distance journeys.

• Range Anxiety: One fear among potential Indian consumers willing to acquire EV’s is Range anxiety which refers to the fear of running out battery charge while driving. As per Feasibility study of new EV manufacturing business in India almost seventy percent of potential Indian EV purchases surveyed by Ola Electric mentioned that range anxiety as a significant barrier to buying them.

• Consumer Awareness and Education: Many in India do not know or understand what an EV is or what benefits they may derive from using it or where options are available for them. According to Deloitte survey findings, around sixty four percent of Indian consumers have little knowledge on this matter

How The India Watch can Help?

If you are an established business or a start-up looking to enter the lucrative EV manufacturing business or other ancillary businesses such as batteries, charging infrastructure, accessories, B2B leasing, etc we can be of help by doing Feasibility of new auto manufacturing set up in India. The India Watch can assist with consulting and research advisory, helping new businesses make informed decisions. Our range of services include but are not limited to

• Market scanning, custom data, and research

• Market surveys, stakeholder interviews, industrial research, etc.

• Feasibility study of EV manufacturing in India, detailed project reports, commercial viability study

• For any further information, feel free to drop us a mail at info@theindiawatch.com or paritosh@theindiawatch.com

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