While the government hopes to have electric vehicle (EV) sales accounting for 30 per cent of private cars, 70 per cent for commercial vehicles, and 80 per cent for two- and three-wheelers by 2030, just about 30% of overall vehicles are likely to be EVs by that time.
Of these 30 per cent, mostly will be two- and three-wheelers, as expensive electric cars would be outside the reach of many consumers in India, according to a study by management consultancy firm, Arthur D Little.
The study, ‘Unlocking India’s Electric Mobility Potential’, stated “the EV industry will cross-sales of 10 million vehicles by 2030, with an overall adoption rate of more than 30 per cent across different vehicle categories. However, EV adoption for passenger vehicles (PVs) is likely to be a mere 10 per cent by the end of the period, amounting to a strikingly small 5 per cent of total EV sales.” The study cited several factors for the low adoption of passenger EVs in India, including higher upfront costs compared to traditional vehicles, lack of enough models, dearth of charging infrastructure (charging stations, battery swapping centres, chargers, and the entire supporting ecosystem), low consumer confidence in the product-driven primarily by range anxiety, exacerbated by product safety mishaps.
The study added that the private sector and the government should work together to remove the barriers to electric mobility, and help India lift its EV game.“Our study reflects the best estimate (30 per cent) for EV penetration to be achieved in India by 2030 given current visibility into plans and initiatives,” author Barnik Chitran Maitra, managing partner & CEO, India & South Asia, Arthur D Little, said.
He, however, added that if India were to truly unlock its full potential, an adoption rate of 50 per cent could be achievable with the sale of more than 17 million EVs by 2030. “This reflects the ‘true potential’ of the Indian EV industry if all stakeholders come together and put a concerted effort in setting up a robust ecosystem in India.”The study added that despite the obstacles, India is one of the largest markets for EVs in Asia, behind only China and, surprisingly, ahead of Japan.
“We can build on this position by acting to support product innovation, create reliable charging infrastructure, and provide subsidies to buyers and additional incentives to start-ups involved in battery R&D, among others,” Maitra said. “If India achieves its true EV potential of 50 per cent electrification, every 10th EV sold globally could be manufactured in India, making India a global EV powerhouse.”As far as electric cars are concerned, in the mass market segment there are currently four EV models — Nexon EV and Tigor EV by Tata, Kona EV by Hyundai, and ZS EV by MG Motor—of the 110-odd passenger vehicle models available in the market.
But 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 at 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.
India also needs to work on battery technology, the study noted.“To attain more than 30 per cent EV adoption, India will require approximately 800 GWh of batteries by 2030. To meet this rising demand, India is accelerating plans to manufacture lithium-ion cells within the country, anticipating $2.3 billion in government subsidies and more than $7.5 billion in investment potential,” it said. “In terms of investment, given FDI inflow of nearly $6 billion in 2021, India’s EV industry could attract further foreign investments of about $20 billion by 2030 to fuel the country’s economic growth and help achieve the required scale in this industry. In the recent past, government support and investments made by auto-incumbents in the EV ecosystem have also bolstered private equity (PE) and venture capitalists (VC) confidence in India’s EV space.”