By: Greg Moran, CEO and Co-Founder of Zoomcar
The automobile market worldwide has evolved in the last decade, especially in the past 5 years. India’s automotive market was valued at USD 100 billion in 2021 and is projected to reach USD 160 billion by 2027. Out of this, while it is still in a fledgling state compared to its western counterparts, the EV market has witnessed steady growth over the years.
The current scenario
EVs are in no way a new concept. The first practical EVs came into existence in the 1870s. However, it’s only of late that EVs have gained incredible traction, primarily due to the increasing pollution and other adverse environmental implications of vehicle emissions. In 2022, India’s EV market was valued at USD 3.21 billion. And according to the Economic Survey 2023, the EV market is projected to grow at a CAGR of 49% between 2022 and 2030.
As consumers, brands, and the government become more and more conscious about the environment, global warming, and climate change, EVs have become one of the most plausible solutions. And when we say EVs, we aren’t only referring to cars/trucks. The entire EV ecosystem, including EV infrastructure like charging stations, battery production, etc., is gradually becoming more robust. The government has also introduced several EV-friendly policies and subsidies in an attempt to drive EV adoption in the country. Now, what happens to fuel consumption in the country?
Reanalysing India’s fuel requirements
Given that India’s EV segment has witnessed faster-than-anticipated growth in the past few years, it will result in the country’s gasoline consumption peaking sooner than previously thought. The quick transition to EVs noticeably increased the manufacturing of petrochemicals. Both diesel and petrol, the two major fuels, are expected to witness peak demand by the mid-2030s, compared to the previous estimate of the mid-2040s.
India is one of the fastest-growing oil markets in the world. Now, given the surge in demand for petrochemicals, Indian refiners are looking to raise our production capacity and are investing millions of dollars to ensure the same. But, as the EV market continues to grow, we can expect the demand for fossil fuels to decrease gradually.
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Despite this, the question is, will India’s automobile industry be able to shake its fossil fuel dependency completely? The answer is likely to be no. Challenges like insufficient EV production, inadequate charging infrastructure, high battery costs, etc., will need to be addressed to ensure that the EV market picks up steam and maintains the growth momentum in the long run.
Summing up
Given that India is looking to meet 50% of its energy requirements from renewable energy by 2030 and achieve Net Zero carbon intensity by 2070, the country is going the extra mile to drive EV adoption. From heavy vehicles used for transportation to waste pickup trucks to personal transport and car rentals, EVs have made their way into multiple automotive categories. There is a goldmine of opportunity that awaits in the EV segment. It all boils down to how we utilize it and achieve our goals.
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