The Indian electric vehicle market size was valued at USD 3.68 billion in FY2023 and is projected to reach USD 22.95 billion in FY2031, growing at a CAGR of 25.07% between FY2024 and FY2031. The Indian electric vehicle market is being driven by factors such as increased adoption of electric vehicles, low running and maintenance cost, technological innovations and government schemes. As people become more aware about the environmental impact of traditional fossil fuel-powered automobiles, EVs are becoming more popular as a more sustainable and eco-friendly option.
Low Running and Maintenance Cost of Electric Vehicles
Electric vehicles have a lower running and maintenance cost as compared to internal combustion engine. Electric vehicles are more efficient, and when combined with the electricity cost, charging an electric vehicle is less expensive than using petrol or diesel. Electric vehicles are more cost-effective to charge than diesel or petrol vehicles due to their higher efficiency and lower cost of energy.
Technological Innovations in Electric Vehicle Market
India has been witnessing several technological innovations in the electric vehicle market, with a growing focus on sustainability and reducing carbon emissions. Rapid technological advancements such as constant upgradations in battery, establishment of charging infrastructure and emergence of solar powered EV. Several startups are working on developing EVs with built-in solar panels, which can recharge the vehicle’s batteries while driving or parked in the sun.
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Environmental Benefits of Electric Vehicles
Hazardous emissions from petrol and diesel automobiles have long-term negative consequences on health of Indians. Electric automobiles emit far less pollution than petrol or diesel vehicles. Electric vehicles can convert 60% of the electrical energy from the grid to power the wheels, but gasoline and diesel vehicles can only transmit between 17% and 21% of the energy contained in the fuel to the wheels. To reduce the environmental impact of charging electric vehicles, India aims to attain approximately 40% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.
Government Scheme
The Indian government has implemented several incentives to promote the adoption of electric vehicles in India. The government provides tax benefits to EV owners. For example, the EV owners do not have to pay road tax and registration fees. The government has also initiated plans to set up charging infrastructure across the country. Exemptions and incentives are being given to EV manufacturers, there is lower tax rate for EV components and manufacturers are exempted from certain duties on imported EV components.
Impact of COVID-19 on India Electric Vehicle Market
The electric vehicle industry witnessed a downward trend during the pandemic phase, affecting the demand for electric automobiles, two-wheelers and three-wheelers. The Society of Electric Vehicle Manufacturers (SMEV) stated that the total electric vehicle registrations fell 20% in FY2021 to 236,802 units, down from 295,683 in FY2020. The supply chain was disrupted by temporarily closed manufacturing facilities, and the industry’s growth was significantly hampered by the lack of raw materials.
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India’s electric vehicle (EV) landscape is evolving rapidly due to several key factors:
- Government Initiatives: The Indian government has launched various initiatives to promote EV adoption. These include the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) schemes, which provide subsidies for electric vehicles and charging infrastructure development.
- Policy Support: There are policies aimed at boosting EV manufacturing and sales, such as tax incentives, import duty exemptions on EV components, and setting up charging infrastructure.
- Automobile Industry Response: Many Indian and international automakers are investing in EV production facilities in India. Companies like Tata Motors, Mahindra Electric, and Ola Electric are leading the charge.
- Challenges: Despite growth, challenges remain, such as the high cost of EVs compared to conventional vehicles, limited charging infrastructure outside major cities, and range anxiety among consumers.
- Public Transport: Government is focusing on electrifying public transport, including buses and two-wheelers, to reduce emissions and dependency on fossil fuels.
- Battery Manufacturing: Efforts are being made to establish battery manufacturing facilities in India to reduce dependency on imports and bring down costs.
Overall, while India’s EV sector is promising, continued policy support, infrastructure development, and technological advancements will be crucial for widespread adoption and sustainability.
Report Scope
“India Electric Vehicles Market Assessment, Opportunities and Forecast, FY2016-FY2030F,” is a comprehensive report by Markets and Data, providing in-depth analysis and qualitative and quantitative assessment of electric vehicles market in India, industry dynamics and challenges. The report includes market size, segmental shares, growth trends, COVID-19 impact, opportunities and forecast between FY2023 and FY2030. Additionally, the report profiles the leading players in the industry mentioning their respective market share, business model, competitive intelligence, etc.
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