Electric Vehicle Market in India Set to Skyrocket to $37.70 Billion by 2028?

 

India, as the world’s third-largest automotive market, is on the cusp of a groundbreaking shift towards electric mobility. With the Indian government’s ambitious target of achieving a 30% penetration of electric vehicles among all vehicles sold by 2030, the nation is witnessing a profound transformation. Automotive OEMs are aligning their strategies with this goal, leading to an influx of EV models in the latter half of this decade. This transformation is bolstered by efforts to enhance EV charging infrastructure, setting the stage for a momentous shift in the Indian automotive landscape.

Let’s take a look at the anticipated changes and movements of the electric vehicles market in India.

Electric Vehicles Market in India

Segment Analysis — Fuel and Vehicle Types

Largest Segment by Fuel Type: BEV (Battery Electric Vehicle)

The landscape of electric vehicles market in India is evolving rapidly, largely due to state subsidies and a concerted push for battery electric vehicles (BEVs). This combination is driving the ascent of BEVs, which offer an eco-friendly and sustainable alternative to traditional internal combustion engines.

Fastest-Growing Segment by Fuel Type: BEV (Battery Electric Vehicle)

Government norms, incentives, rebates, and growing awareness of electric mobility are catalyzing the rapid growth of BEVs, making them the fastest-growing segment in the electric vehicles market in India.

Largest Segment by Vehicle Type: Commercial Vehicles

Commercial vehicles have taken center stage in India’s electric vehicle adoption. The demand for electric passenger vehicles is surging, primarily driven by the growing need for sustainable personal transportation solutions. However, there remains a gap in the availability of the commercial electric vehicles market in India.

India Electric Vehicle Market Trends

As we explore the prevailing trends shaping the electric vehicles market in India, it becomes evident that India is in the midst of a transformative journey:

Commercial Vehicles Lead the Way

The commercial vehicle segment is at the forefront of adopting electric mobility solutions. The business sector is rapidly embracing electric commercial vehicles, aligning sustainability with operational efficiency.

Government Incentives: The FAME Scheme

The Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) program has emerged as a catalyst for the electric vehicles market in India. Subsidies and discounts offered under this scheme make sustainable choices more affordable and accessible, promoting the shift towards electric mobility.

Tax Advantages

Both the Indian government and select state governments extend a range of tax benefits to electric and hybrid vehicle owners, making them an appealing alternative to traditional vehicles. These fiscal incentives encourage eco-conscious consumers to embrace the electric vehicles market in India while reaping financial benefits.

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Industry Overview

The electric vehicles market in India is gradually consolidating, with the top five companies holding a substantial 53.49% market share. Leading players include Audi AG, Hyundai Motor India, Mahindra & Mahindra Ltd, MG Motor India Pvt. Ltd, and Tata Motors, all of which play a pivotal role in driving innovation and growth in the sector.

Recent Developments in the Indian Electric Vehicle Market

The evolving landscape of the electric vehicles market in India is marked by significant developments that offer a glimpse into the future of mobility:

Market Dominance — Tata Motors and MG

Tata Motors has captured the spotlight by selling 34,000 EVs during the first half of 2023, securing a remarkable 72% market share. This achievement can be attributed to the popularity of models like Tiago, Nexon, and Tigor. Tata’s plans include introducing four more EVs by 2024. MG, on the other hand, has made a noteworthy impact by surpassing 10% market share, largely driven by the success of the MG ZS and the new entrant, MG Comet (also known as the MG Air).

Challenging the Status Quo — Mahindra and Citroen

Mahindra has presented a direct challenge to Tata with its XUV 400, securing a substantial 9% market share. Similarly, Citroen’s eC3 EV has gained a 3.5% market share, reflecting a positive market response to more affordable compact EVs.

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Leading The Range Race — Top 5 Electric Cars With Longest Range In India

BYD’s Ambitious Plans

Chinese automotive giant BYD is aiming for a significant 30% market share in the electric vehicles market in India by 2030. They’ve already commenced deliveries of the Atto 3 in Q1 2023, capturing a 2.8% market share in the first half of the year. The upcoming Seal model is expected to leverage an early-mover advantage over competitors.

Hyundai-Kia’s Soaring Market Share

Hyundai’s launch of the Ioniq 5, sharing the platform with the Kia EV6, has propelled them into the spotlight. These models have become top sellers in their segment, and the combined Kia/Hyundai market share has risen to over 2%, up from 0.8% in H1 2022. Hyundai is set to further revamp its mobility strategy and plans to introduce five distinct EV models by 2032.

Maruti Suzuki’s Ambitious Entry

India’s leading car manufacturer, Maruti Suzuki, is gearing up to launch its first EV in 2024 and has ambitious plans to introduce six more models by 2030. While Maruti is relatively late to the EV game, its scale and ambition provide it with the potential to dramatically expand the electric vehicles market in India.

Tesla’s Potential Entry and Ola’s Challenge

Tesla, a global EV giant, is in discussions to manufacture EVs in India to meet the rising global demand. Success in the Indian market would hinge on offering more affordable EVs based on the next-generation platform and benefiting from local subsidies. However, the Indian government is committed to promoting local supply to cater to global demands.

Indian electric scooter manufacturer Ola has announced its plans to launch its first electric four-wheeler in the latter half of 2024. This bold move positions Ola to compete with established players like Tesla in the evolving electric vehicles market in India.

Challenges and Opportunities

While India offers an attractive market for global automakers due to its talent pool, government support, and active EV subsidiaries, challenges persist. One of the pressing needs is for sufficient EV component suppliers within the country. Developing a robust supply chain is essential to meet the growing demand of the electric vehicles market in India.

Future Projections

The electric vehicles market in India is set to continue its rapid growth, with the number of EV units exceeding 300,000 in 2025. This represents over 6% market share of the total light vehicle market and signifies a remarkable compound annual growth rate (CAGR) of 59%.

Conclusion

The electric vehicles market in India is on an exhilarating trajectory towards a more sustainable and eco-conscious future. As consumers increasingly embrace electric mobility and industry players invest in innovation, the electrified horizon beckons with promise. Stay tuned for further developments in this dynamic landscape, where electrification reigns supreme, and the future of mobility is being rewritten.

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