A recent study by JMK Research & Analytics estimates cumulative EV sales to reach approximately five crores in India by FY2030. However, the early wave will be driven by public and shared mobility, including last-mile connectivity services and not by private cars.
A boutique consulting firm focusing on renewables, electric mobility, and battery storage, JMK Research believes that India could realise EV sales penetration of 30% of private cars, 70% of commercial cars, 40% of buses and 80% of two and three-wheelers by 2030. More policy measures along with infrastructure and industry support is crucial for greater penetration.
The obvious low hanging fruit, the affordable electric two-wheelers is expected to clock in maximum sales due to lower upfront costs along with national and state subsidy support. However, within this also it is the low and medium speed two-wheeler categories that make more sense, in terms of balancing the total cost of ownership factor.
Meanwhile though there is a steady uptick in adoption of EVs in the commercial three-wheeler segment, the high upfront cost is a matter of concern. Going forward, the increased demand of last-mile connectivity for delivery of goods is expected to offer the much needed push to enable greater growth of electric cargo three-wheelers.
The report further states that the commercial use case for electric passenger vehicles can be another low hanging fruit in the coming years, especially in terms of their TCO compared to internal combustion engines (ICE). For an average daily use case of 120 km, TCO for an electric four-wheeler is 12% lower than ICE-run PVs. Especially in cities with high traffic, the TCO of electric passenger vehicles has become a definitive game changer. While traffic snarls lead to mileage drop in conventional ICEs, an EV is able to conserve energy through regenerative-braking. Add to this, the rising fuel prices. However, the cost is still a concern. The study points out how an electric car with good performance in the price range of Rs 10 lakh, the core of the current market is still far from reality.
The other key segment is the adoption of electric buses by state transport units. The government has already planned to procure at least 50,000 electric buses in the next one year. This coupled with the EV targets of various state EV policies is expected to provide additional push. Most state policies are targeting 100% of EV bus fleet over the next seven to eight years. According to JMK Research, this is expected to boost EV adoption but till the time supporting infrastructure is not in place, it will be hard to translate these estimates into actual numbers. Adequate charging infrastructure, therefore, is the key prerequisite that will define the adoption trends of EVs in India.
The consulting firm estimates that India needs at least 20.5 lakh and 39 lakh charging stations to support five crore and eight crore EVs by 2030. The state EV policies need to define targets for charging infrastructure in order to meet the estimated requirement .
Close to 19 have drafted their EV policies and set specific timelines for adoption. But the study points out the necessity of these targets to complement sales forecasts to enable coordinated efforts from all stakeholders in a cohesive manner.
Last but not the least important aspect is the investments required for India’s mobility transition. The study puts the focus on the need for higher liquidity and lower cost of capital for EV assets and infrastructure. Mobilising the investments to finance OEMs, charging stations, battery manufacturers, and end consumers “will require targeted and systemic policy support,” they believe.