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Green mobility on the fast track: 20-25 EV models expected by 2025-27 in mass market segment

By 2025-27, India is expected to have 20-25 EV models.

According to the FY22 retail sales data shared by the Federation of Automobile Dealers Associations (FADA), four-wheeler electric vehicles (EVs) formed a mere 0.65% of the passenger vehicle (PV) market—17,802 EVs, of the 2,726,047 PVs sold.

But EV sales also grew a hefty 257.18% in FY22 over FY21 (4,984 units), and their market share tripled—from 0.21% in FY21 (4,984 EVs, of the 2,387,925 PVs sold) to 0.65% in FY22.

The sales performance of EVs has already started surpassing some recent projection reports. For instance, according to a 2021 IHS Markit report, the EV market size was expected to be 12,000 units in 2021, and grow to 18,000 units (2022), 73,000 units (2025) and 175,000 units in 2028.

But EV sales touched the 2022 projection in FY22, full nine months earlier.

Automotive analysts FE talked to said that, in a matter of years, the growth rate of EVs will go from arithmetic progression to geometric progression.

“I believe the years 2025 to 2027 will prove to be the launchpad for EVs, and from thereon these will take off,” Som Kapoor, partner, Automotive Sector, EY India, told FE. “In any growing technology-based industry, there is a point when things move from arithmetic progression to geometric progression. From now till 2025, the EV market might grow at a CAGR of 10-15%, and from thereon it will start growing at high double-digit rates. It could potentially happen as early as 2025.”

Number of EV models

Currently, in the mass market segment, there are four EV models—Nexon EV and Tigor EV by Tata, Kona EV by Hyundai and ZS EV by MG Motor—of the 110-odd PV models (data from the Society of Indian Automobile Manufacturers).

By 2025-27, India is expected to have 20-25 EV models.

Maruti Suzuki will launch an EV in 2025. By 2026, Tata Motors will offer least 10 EV models, Hyundai India will have six EVs by 2028 (as will Kia India), and Mahindra & Mahindra will have at least four electric SUVs by 2027.

Gaurav Vangaal, associate director, Light Vehicle Forecasting, S&P Global Mobility, told FE that with Maruti Suzuki entering the EV space in 2025 and Hyundai launching its made-in-India EV possibly before 2025—and both utilising their vast sales network—growth could touch new highs.

He, however, cautioned that the success of EVs will be decided by the customer. “The customer will buy what she loves; with the focus of some Japanese carmakers on strong hybrid cars, the customer will soon have choice beyond EVs,” he said. “Hybrid cars are being promoted as self-charging EVs and that could shift a section of customers towards hybrids, provided these are priced well.”

Top-down approach

Volkswagen Group has already started its electrification drive in India, following a top-down approach. In 2021, the Group’s luxury brand Audi launched five EV models under the e-tron sub-brand and Porsche launched the Taycan electric supercar. These are niche EVs imported as completely built-up (CBU) models, priced upwards of Rs 1 crore.

Last year, Ashish Gupta, brand director, Volkswagen Passenger Cars India, told FE that the carmaker is studying the EV segment. “By 2025, our internal studies show that EVs could form about 5% of the market. That will be a good starting point for us and we can look at bringing our global EV portfolio to India,” he said. “This will also give us sufficient time to customise our global EVs for the Indian market.”

Skoda Auto India, part of Volkswagen Group, is expected to launch the Enyaq electric SUV in 2023. “We will bring the Enyaq via the CBU import route in 2023 (to test the waters),” Zac Hollis, brand director, Skoda Auto India, told FE. “But as far as local manufacturing of EVs is concerned, for the next three years there are no plans.”

Local EV players

Tata Motors aims to have 20-25% of its PV sales coming from EVs within five years and more than 30% by 2030. Last week, it launched its born-electric pure EV architecture and the first car on this architecture will be launched in 2025. The carmaker also said it will soon start producing EV batteries in India (currently, it imports components such as cells, and then assembles the battery pack locally).

“I think the geometric progression has already started. If the market grows more than three times a year, it’s not linear growth. The EV market is in the initial states of geometric growth,” Shailesh Chandra, managing director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, told FE.

He added that electrification of PVs will see rapid pace of growth, provided the supply chain isn’t negatively impacted for a long time (like the recent semiconductor shortage) and how fast carmakers are able to build capacities.

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“The government has set a 30% aim (of EV sales accounting for 30% of private cars by 2030), and it will come with supportive policies that will steer the ecosystem players to start working in that direction,” Chandra said. “At Tata Motors, we have grown hugely on the back of only two EV models and about 60 cities we currently operate in. This year, we should hopefully double the number of cities and have more EV models. The driving range of EVs will also increase (without a commensurate increase in their sticker price) as global battery prices are coming down.”

Anish Shah, the MD of Mahindra & Mahindra, had last month said that the adoption of EVs has been faster than expected and “50% of the Indian PV market could shift to EVs by the end of this decade.” Mahindra has committed Rs 3,000 crore investment in the EV space and will launch 16 EVs by 2027, of which at least four will be electric SUVs (in the PV space) and mostly in the commercial vehicle space.

Charging infrastructure

Alongside EV adoption, the charging infrastructure is also growing. According to a recent EY report, till September 2021 India had about 2,900 EV charging points, which are expected to grow to 22,700 by 2023 and 79,000 by 2025.

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