Electric vehicles (EVs) have emerged as a beacon of hope in a world where environmental challenges loom large. With their promise of cleaner, more sustainable mobility, EVs are key players in the fight against climate change and urban pollution. India’s EV Industry is on the verge of a transformative journey, ready to shape the nation’s transportation landscape. The Industry shows immense potential to drive change, provide a brighter and more eco-friendly future for India and contribute to global efforts to combat climate change and create cleaner, healthier cities.
India has set an ambitious target of increasing the share of EV sales to 30 per cent in private cars, 70 per cent in commercial vehicles, 40 per cent in buses, and 80 per cent in two-wheelers and three-wheelers by 2030. In absolute numbers, this is estimated to translate into an impressive target of 80 million EVs on Indian roads by 2030. The country also aims to achieve 100 per cent local production of EVs under the ‘Make in India’ initiative.
Adoption and Industry Focus
The India electric vehicle market size is projected to grow from USD 3.21 billion in 2022 to USD 113.99 billion in 2029, growing at a compound annual growth rate of 66.52 per cent, according to a report by Fortune Business Insights. This meteoric rise is indicative of the Industry’s potential to transform the automotive landscape in the country. The Industry has recorded strong growth in the past few years and is supported by the Government’s implementation of favourable policies and programs. According to a joint report by GameChanger Law Advisors and Speciale Invest, the Indian EV battery market is also set to skyrocket, from $16.77 billion in 2023 to an impressive $27.70 billion by 2028.
In a remarkable milestone, India achieved over 1 million EV sales in less than nine months in 2023, a feat that took an entire year in 2022. Data from the Ministry of Road Transport and Highways indicates that these EV registrations accounted for 6.4% of total automobile sales in the country. In 2023, the two-wheeler segment accounted for 56% of EVs sold, closely followed by three-wheelers and passenger vehicles. Notably, CY2022 was the first year when EV sales in India had charged past the million-unit mark. Fleet operators played a crucial role in this milestone, as they contributed substantially, accounting for roughly 25 percent of all EVs sold in 2022.
Numerous automotive brands are taking the electric vehicle segment seriously. Established players and new entrants alike have embraced the EV revolution and introduced a range of electric vehicles in the Indian market. Beyond automakers, industries including automotive, power, and oil are bolstering this shift towards clean mobility. Collectively, these sectors are investing heavily in expanding EV charging infrastructure across the country. Thousands of charging stations have already been established, with commitments to construct even more. It is a clear indication that the Industry is committed to enabling widespread EV adoption.
A recent report by the Confederation of Indian Industry (CII) underscored the need for a minimum of 1.32 million charging stations in India by 2030 to support the rapid proliferation of electric vehicles. To maintain an ideal ratio of one charger for every 40 electric vehicles, India must install over 400,000 charging stations annually, culminating in 1.32 million chargers by the target year.
This success of EVs can be credited to a combination of factors, including government initiatives at both the central and state levels, a dedicated Industry focus, and growing public adoption of electric vehicles. Programs like Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME India), the Production-Linked Incentive (PLI) scheme for the Auto and Auto Component, and the PLI scheme for manufacturing advanced chemistry cell (ACC) batteries have proved instrumental in fostering local production and boosting EV adoption. The Government of India is also exploring the possibilities of switching all their vehicles to electric in the next few years.
States have also shown a growing interest in fostering the Industry and embracing EVs. Delhi, for instance, has set an ambitious goal of transitioning 80 percent of its city buses to electric power by 2025. Achieving this target requires a substantial increase in the number of e-buses, from 800 to an impressive 8,000.
Catalysing Global Change
The transformative boom in India’s EV Industry is not only indicative of its domestic prowess but also has significant implications on the global landscape. The growth, industry participation, and ambitious goals set by India place it at the forefront of the international EV revolution. India’s journey towards an electric future aligns with the broader global efforts to mitigate climate change, reduce greenhouse gas emissions and transition to sustainable transportation. As India paves the way towards a sustainable and electric future, it not only reduces its carbon footprint but also provides inspiration and a tangible blueprint for other developing countries to follow suit.