The festive season has always been a key enabler that drives auto sales across segments in the country. Setting a joyous mood in the market, the season witnesses buyers stepping forward to purchase vehicles that go best with their needs―personal or commercial, as they find this time most auspicious to make investments. In the midst of such sentiments, commercial electric vehicles (EVs) have emerged as the biggest beneficiary, owing to factors including an amalgam of the e-commerce boom, growth in consumer spending, positive news on increased savings from early adopters, environmental concerns after COVID and an increased commitment by society to participate in sustainability.
With rising fossil fuel prices, and reports about Global Warming disasters, companies, commercial fleet owners, e-commerce giants, small businesses, startups, and others are becoming more conscious about the cost savings and green options. The festive season is further giving an impetus to EV sales that can result in record growth in the coming period.
Consumers’ spending behaviors have seen a dramatic improvement in recent quarters with the relaxing of pandemic-induced restrictions. Easing of supply chain bottlenecks, demand from semi-urban, tier-2,3 locations, and availability of easy financing options have propelled sales and growth.
In recent months, commercial EV manufacturers have recorded a surge in demand and real enquiries have gone up substantially. A healthy partnership between OEMs, consumers, financing stakeholders, and the governments has further helped to address the roadblocks in EV growth and the results are now visible.
Major factor that is pushing the sale of commercial EVs in the festive season is the massive transformation in the Indian logistics industry and the growth of online / E-commerce. Service providers now have to meet consumer demands in a highly competitive market with new delivery models like 15-minute delivery, or hyperlocal delivery.
This e-commerce boom has forced buying of new vehicles, most of them being EVs. There is a huge demand for electric 2 & 3 Wheelers and other variants like EV mini trucks to meet the present-day requirements. Even the transportation industry OEMs are willing and working towards adopting green and eco-friendly technologies based on electric mobility.
As these noise-less, small-format EVs can easily access the deep network of the Indian cities, they have become the most-sought after choice of ecommerce giants for doorstep delivery of packages or groceries or daily supplements.
A huge demand is being experienced across all sections and there is a raging interest for 3 wheelers or cargo vehicles even among small businesses or low-income groups for commercial purposes, who find them more economical in terms of operating costs and maintenance than conventional vehicles. This is creating a multiplier effect and demand is increasing to install charging infrastructure at central hubs to help overcome range anxiety and increase operational efficiency.
The positive sentiments are even reflected in industry reports. As per available data, the registered EV sales in July 2021 witnessed a month-on-month growth of 134.8%, at 26,127 units. On a Y-o-Y basis, EVs posted growth of 261.11%. These growth drivers are accelerating India’s EV progress and soon we can expect heightened India-specific R&D innovations, new manufacturing hubs and PLI scheme implementation, chip/semiconductor fab plants, battery and cell production, and deployment of easily accessible charging infrastructure.
Furthermore, incentive schemes for both buyers and manufacturers like FAME-II, development of the local manufacturing ecosystem for self-reliance, and incentivizing fresh investments into developing indigenous supply chains for key technologies, products, and auto components will greatly support greater adoption of electric mobility transport in days to come.
The future is EV and the commercial vehicle owners have realized that the burden of oil imports, rising pollution, and commitments to combat climate change are key factors that are guiding India’s policy for faster EV adoption. To support the change, they are increasingly stepping up and the growth prospects are so huge that as per industry reports, the Indian EV market will grow at a CAGR of 36 percent till 2026.
The EV battery market is also projected to grow at a CAGR of 30 percent during the same period. According to an independent study by CEEW Centre for Energy Finance (CEEW-CEF), the EV market in India will be a US$206 billion opportunity by 2030 if India maintains steady progress to meet its ambitious 2030 target. No doubt, this festive season has laid the foundation stone of India’s great EV transformation in 2022.
Author: Dr Amitabh Saran, CEO, Altigreen Propulsion Labs
Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.
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