Home EV Tips Electric Vehicle Market Size In India

Electric Vehicle Market Size In India

As the world is becoming increasingly conscious of environmental issues, one of the ways to minimize pollution is by introducing electric vehicles (EVs) that can reduce harmful emissions. India has shown a growing interest in EVs in recent years, with the government offering incentives to manufacturers and consumers to encourage the transition from conventional internal combustion engines (ICEs) to EVs. The rise in fuel prices and the increasing concern for the environment have driven the EV market in India. Today, the electric vehicle market holds immense potential and is expected to grow significantly in the coming years. This section will introduce the size of the electric vehicle market in India and the factors behind its growth.

Current status of the electric vehicle market in India

electric vehicle market size in india

India has been making significant strides towards the adoption of electric vehicles in recent years. According to recent reports, the Indian electric vehicle market has grown at a compound annual growth rate (CAGR) of 44.31% from 2015 to 2019. However, the current share of electric vehicles in the total automotive market in India is still quite low, with only 1% in 2020. The main reasons for this low adoption rate include lack of infrastructure, high cost, and limited range anxiety. The Indian government has been taking several initiatives to promote the use of electric vehicles in the country, such as tax rebates, subsidies, and incentives for manufacturers and consumers. Many automobile manufacturers are also shifting their focus towards electric vehicles and launching new models in the Indian market. With these efforts and increasing awareness among consumers, the electric vehicle market in India is expected to grow in the coming years.

Factors driving the growth of the electric vehicle market in India

electric vehicle market size in india

India’s electric vehicle market has been growing rapidly over the past few years, driven by several factors. One of the key drivers is the government’s push towards a cleaner and sustainable form of transportation. The Indian government has set a target of having all-electric vehicles on the road by 2030, and it has introduced various incentives to encourage the adoption of electric vehicles, including tax benefits, subsidies, and grants. This has led to a surge in demand for electric vehicles, particularly in urban areas where air pollution is a major concern.

Another factor driving the growth of the electric vehicle market in India is the declining cost of batteries. The cost of lithium-ion batteries, which are used in most electric vehicles, has been steadily decreasing over the years, making electric vehicles more affordable for consumers. This has resulted in a wider adoption of electric vehicles, particularly in the two-wheeler segment, which has traditionally been dominated by petrol-powered vehicles.

Furthermore, the increasing availability of charging infrastructure has also played a significant role in the growth of the electric vehicle market in India. With the government’s focus on developing a robust charging infrastructure network across the country, electric vehicle owners now have more options for charging their vehicles, reducing range anxiety and making electric vehicles a more convenient option for daily use.

Overall, the combination of these factors has created a favorable environment for the growth of the electric vehicle market in India. With the government’s continued support and increasing awareness among consumers about the benefits of electric vehicles, the future looks bright for the electric vehicle industry in India.

Key players in the Indian electric vehicle market

electric vehicle market size in india

Currently, the Indian electric vehicle market is in its nascent stage, but several key players have entered the market and are aggressively promoting and selling their electric vehicles. Some of the prominent players in the Indian electric vehicle market are Tata Motors, Mahindra Electric, Hero Electric, Bajaj Auto, TVS Motors, and Ather Energy. Additionally, international companies such as Hyundai and MG Motors have also introduced their electric vehicles in the Indian market. These companies are not only targeting the urban markets but are also focusing on the tier 2 and tier 3 cities in India where there is a growing demand for electric vehicles due to rising environmental concerns and increasing disposable incomes. As the Indian government provides various incentives and subsidies for electric vehicles, we can expect more players to enter the market in the near future.

Government initiatives and policies promoting the use of electric vehicles

electric vehicle market size in india

There have been a number of government initiatives and policies put in place to promote the use of electric vehicles in India. One of the most significant is the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme. Launched in 2015, this scheme offers incentives for the purchase of electric vehicles, as well as funds for research and development in the electric vehicle industry.

In addition to the FAME scheme, the government has also introduced a number of tax incentives and exemptions for electric vehicle manufacturers and buyers. For instance, electric vehicles attract a lower Goods and Services Tax (GST) rate of 5%, as compared to a rate of 28% for petrol and diesel vehicles. There are also no registration fees or permits required for electric vehicles in some states, and electric vehicle manufacturers are offered various subsidies and waivers on land and electricity tariffs to encourage investment in the industry.

Furthermore, the government has set ambitious goals for the adoption of electric vehicles in the country. It aims for electric vehicles to make up 30% of all new vehicle sales by 2030, an increase from the current rate of 1%. To achieve this goal, the government has proposed a number of measures, such as setting up charging infrastructure across the country and phasing out petrol and diesel vehicles in certain cities.

Overall, the Indian government’s efforts to promote the use of electric vehicles have been significant and have contributed to the growth of the electric vehicle market in the country. With continued support and investment, it is possible that India could become a leader in the electric vehicle industry in the coming years.

Challenges faced by the electric vehicle market in India

electric vehicle market size in india

India’s electric vehicle market has been slow to take off due to several challenges. One major challenge is the lack of charging infrastructure across the country. With a limited number of charging stations, buyers are hesitant to invest in electric vehicles, since they may not be able to find charging options during long-distance travel. Another challenge is the high upfront cost of electric vehicles, which is a barrier for many customers.

Moreover, battery technology is another challenge for the electric vehicle market in India. The current battery technology restricts the driving range of electric vehicles to only a few hundred kilometers on a full charge, making it difficult for customers to travel long distances. Additionally, the lifespan of the batteries is limited, and the replacement cost is very high.

There is also a lack of government incentives and policies to promote and support the electric vehicle market in India. The government has not implemented enough regulations to reduce emissions from vehicles, nor have they introduced enough incentives such as tax benefits, subsidies, and rebates to encourage the adoption of electric vehicles.

Finally, there is also a lack of awareness among customers about electric vehicles, their benefits, and the technology involved. It is imperative that the government, manufacturers, and media engage in increasing awareness about electric vehicles, their technology, and their benefits to accelerate the growth of this market in India.

Comparison with the global electric vehicle market

electric vehicle market size in india

The global electric vehicle market has been expanding rapidly over the past few years. According to a report by BloombergNEF, the global electric vehicle sales reached a record high of 2.1 million units in 2019, which accounted for 2.6% of the total car market share. The market is expected to grow further to 10 million units by 2025.

Compared to the global market, the electric vehicle market in India is still at a nascent stage. However, the Electric Vehicle industry in India has been growing at a steady pace. According to a report by India Energy Storage Alliance (IESA), the EV market in India is projected to reach 63 lakh units per annum by 2027. Currently, the electric vehicle industry in India is dominated by two-wheelers, followed by three-wheelers and passenger cars.

One of the main reasons for the slower growth of electric vehicles in India is the lack of infrastructure such as charging stations. However, the Indian Government has announced several initiatives to boost the development of electric vehicles, including the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) scheme and the National Electric Mobility Mission Plan (NEMMP).

Overall, while the electric vehicle market in India still has a long way to go before it catches up with the global market, the steady growth of the industry and the government’s initiatives are encouraging signs for the future.

Future prospects of the electric vehicle market in India

electric vehicle market size in india

The future prospects of the electric vehicle market in India are promising due to several factors. Firstly, the Indian government has shown a strong commitment to promoting the adoption of electric vehicles, evidenced by its ambitious target of achieving 30% electric vehicle penetration on Indian roads by 2030. The government has also implemented various policies and incentives, such as tax benefits and subsidies, to encourage the purchase of electric vehicles.

Furthermore, the rising concerns over air pollution and climate change have led to an increasing level of awareness among the Indian population on the importance of reducing carbon emissions. This has resulted in a growing demand for environmentally friendly means of transportation, particularly in densely populated cities where air pollution is a serious issue.

Additionally, the cost of electric vehicles has been decreasing steadily, making them more accessible to a wider range of consumers. Major automakers are partnering with local Indian companies to develop and manufacture electric vehicles domestically, leading to job creation and boosting the Indian economy.

Overall, the prospects for the electric vehicle market in India are bright, with a combination of government support, rising public awareness, and decreasing costs leading to a promising future.

Conclusion

electric vehicle market size in india

In conclusion, the electric vehicle market in India is expected to grow significantly in the coming years. The Indian government’s push to reduce dependence on fossil fuels and curb emissions has led to various incentives and subsidies being offered to electric vehicle manufacturers and buyers. Additionally, the increasing public awareness about the benefits of electric vehicles is also contributing to the growth of the market.

However, the industry still faces some challenges, such as high upfront costs and limited charging infrastructure. But with the introduction of new and more affordable electric vehicle models, and the government’s plans to establish more charging stations across the country, these challenges are expected to be addressed soon.

Overall, the growing demand for electric vehicles in India presents a significant opportunity for businesses to invest in the market and contribute to the country’s sustainable development goals.

Previous articleElectric Car Moving Parts
Next articleBest Electric Car Tax Credit