According to the latest forecast from the research company BloombergNEF, by 2040, India is expected to become the world’s fourth-largest passenger electric vehicle market. The report predicts that by 20 years from now, electric vehicle sales in India will stand at a mark of 2.6 million, equalling that of Germany and only behind China (14.6 million) and Unites States (9.7 million). Electric vehicle sales in India, by 2040, will exceed Japan, France, United Kingdom as well as South Korea. The report predicts this outcome while considering just the sales of electric four-wheelers.
At the moment, there are more than 5 million passenger electric vehicles on roads around the world. Globally, a significant increase in the sales of electric vehicles was observed around the year 2014-2015, and the graph has been observing an upward trend since then. Currently, China, Europe, Unites States, Japan and South Korea stand as the leading market in terms of electric vehicle sales globally.
According to the BloombergNEF report, from 2014 to 2018, India has observed a rather lacklustre sales of passenger electric vehicles. During the year 2018, only 3,000 units of passenger electric vehicles were sold in the Indian market. One of the major reasons for the same can be attributed to the fact that passenger electric vehicles, in India, currently command a significant premium over their conventional counterparts. For instance, the petrol-powered Tata Tigor currently retails in India at a price of Rs 5.5 lakh. However, the prices of its all-electric derivative start from Rs 9.99 lakh. India’s first long-range all-electric vehicle i.e. the Hyundai Kona SUV has launched in India recently at a price of Rs 25.30 lakh. With the recent cut in GST rates, its prices have come down to Rs 23.71 lakh, which is still way above the traditional mass-market segment.
The government has taken several steps in order to increase the popularity of electric vehicles in India. The GST council has recently announced the reduction of taxes on electric vehicles and chargers from 12% to 5%. In addition to this, exemptions have been announced on import duty of select electric vehicle components. Furthermore, the Rs 10,000 crore FAME scheme currently provided incentives to commercial electric vehicles and also extends the same to private two-wheelers as well.
The BloombergNEF report predicts that by 2030, the prices of Lithium-Ion battery packs, in co-relation to their cumulative demand, is going to decrease significantly. In 2018, what stood at $200/kWh is likely to come down to $62/kWh by 2030. Furthermore, the purchase price parity of electric vehicles with ICE vehicles is predicted to be achieved in India by 2030 across all EV segments.
According to the report, shared mobility services along with the public bus market will electrify faster than cars. By 2040, out of the estimated 2.6 million sales of passenger electric vehicle in India, the majority is going to be from the shared mobility segment. Similarly, it is predicted that by 2040, the share of ICE bus sales will shrink down to 21% while those of the e-bus sales will rise up to 79%. The three-wheeler segment in India is already embracing electric mobility. In 2017, out of the total 1.4 million sales of three-wheelers in India, more than 50% were those of all-electric ones.