Indian EV market revving up for accelerated growth as adoption increases

The electric vehicle market in India is witnessing a surge, thanks to the Government’s move to reduce vehicular emissions and adopting greener technologies. According to Fortune Business Insights, the electric vehicle market size in India was pegged at $1.45 billion in 2021. This market is projected to grow from $3.21 billion in 2022 to $113.99 billion by 2029 at a CAGR of 66.52% in forecast period – 2022-2029. Autocar Professional states that electric vehicles registered cumulative sales of around 740,000 units for the first six months of FY2024, a 51% YoY growth. While two- and three-wheelers together account for 94% of sales, demand is growing for electric cars and SUVs, the report states.

Globally, too, the electric vehicles market is experiencing exponential growth, reporting over 10 million sales in 2022, representing a 55% increase from the previous year. The future outlook for the EV market is very positive, with the International Energy Agency (IEA) projecting that EV sales will reach 65% of total car sales by 2030.

This growth is being driven by a number of factors, including government policies and incentives that support EV adoption, declining battery costs, improving EV performance and range, and increasing awareness of the environmental benefits of EVs.

The growth of the EV market will have a number of positive impacts, including reduced greenhouse gas emissions from the transportation sector, improved air quality in cities, created new jobs in the EV industry, and reduced reliance on foreign oil.

However, there are also some challenges that need to be addressed in order to support the continued growth of the EV market, such as the need to expand EV charging infrastructure, the need to develop more affordable EV models, and the need to address concerns about the environmental impact of EV battery production and disposal.

Market Overview

The global EV market is segmented by vehicle type, battery type, and region. The vehicle type segment includes passenger vehicles, commercial vehicles, and two-wheelers. The battery type segment includes lithium-ion batteries, nickel-cadmium batteries, and lead-acid batteries. 

The passenger vehicle segment is the largest segment of the global EV market, accounting for over 70% of global EV sales in 2022. The commercial vehicle segment is the second largest segment, accounting for over 20% of global EV sales in 2022. The two-wheeler segment is the smallest segment, accounting for less than 10% of global EV sales in 2022.

The lithium-ion battery segment is the largest segment of the global EV market, accounting for over 90% of global EV sales in 2022. The nickel-cadmium battery segment is the second largest segment, accounting for less than 10% of global EV sales in 2022. The lead-acid battery segment is the smallest segment, accounting for less than 1% of global EV sales in 2022.

Asia Pacific is the largest region of the global EV market, accounting for over 50% of global EV sales in 2022. Europe is the second largest region, accounting for over 30% of global EV sales in 2022. North America is the third largest region, accounting for over 15% of global EV sales in 2022. 

Namit Jain , Co-founder & CEO, Rupyy part of CarDekho Group, informed, “In India, the two-wheeler electric vehicle sector has exhibited a robust growth of 60% in H1CY23, capturing a 7% market share from just 1% two years prior. While challenges persist – ranging from high initial costs to infrastructural gaps – the landscape is ripe for disruption. One such avenue is the evolving fintech sector, which is playing an increasingly significant role in EV adoption by streamlining financing options. From a 30% to 40% surge in EV financing penetration in recent months, fintech innovations are effectively democratising access to electric mobility. Supported by government initiatives, technological breakthroughs, and financial ingenuity, we are confident that India is steering towards a sustainable and electrified future.”

Market Growth Drivers

The global EV market is being driven by a number of factors, including:

• Government policies and incentives: Governments around the world are offering a variety of policies and incentives to support EV adoption, such as tax breaks, subsidies, and access to carpool lanes.
• Declining battery costs: Battery costs have declined significantly in recent years, making EVs more affordable for consumers.
• Improving EV performance and range: EVs are now offering better performance and range than ever before, making them more competitive with traditional gasoline-powered vehicles.
• Increasing awareness of the environmental benefits of EVs: Consumers are becoming more aware of the environmental benefits of EVs, such as reduced greenhouse gas emissions and improved air quality.

Rajat Verma, Founder & CEO, Lohum, said, “We commend the Government of India for their proactive approach in establishing clear legislation for the burgeoning electric vehicle (EV) industry. The innovation witnessed within the EV ecosystem has been nothing short of remarkable, exceeding all expectations. Equally inspiring is the rapid embrace of EVs by consumers, who have shown remarkable resilience in the face of uncertainties, all in the pursuit of a cleaner, more sustainable planet.”

India stands on the cusp of a transformative decade, one that promises groundbreaking advancements in EV technology, scalability, and sustainability.

“At Lohum, we are actively driving this transformation by spearheading efforts to create a sustainable supply of materials crucial for the energy transition. Our pioneering solutions are designed to convert waste materials from EV batteries and critical resources into assets with virtually limitless value. This journey propels us towards a future where resource utilisation is maximised, and we take full responsibility for the well-being of our planet,” Verma added.

Speaking at conclave of Tata EV recently, Vivek Srivatsa, Head of Marketing, Sales and Service Strategy, Tata Passenger Electric Mobility Ltd, had said, “We are entering a new era with TATA.ev. Our new brand identity for electric vehicles underlines our commitment to accelerate the adoption of clean energy mobility solutions. We intend to drive positive change in the automotive industry with a focus on sustainability, community, and technology. Both the products and services are intended to create highly differentiated and meaningful consumer experiences. The brand personality is humane, honest, invigorating, and conversational – a rallying point for those curious about having a better impact on the world.”

Mayank Bindal, Founder & CEO, Snap E Cabs, told Adgully, “In many companies, the pursuit of sustainability through adopting eco-friendly practices often falls under the purview of the Corporate Social Responsibility (CSR) department. While the intention behind such efforts is commendable, the execution sometimes falters as the sustainability goals fail to permeate consistently across the entire organisation. However, at Snap-E, it’s accurate to say that the commitment to CSR principles is deeply ingrained throughout the entire company. We firmly believe that addressing some of the most urgent transportation challenges for our customers in a profitable manner and leading the charge in adopting sustainable practices are not two distinct objectives; rather, they are intricately intertwined.”

Future Market Outlook

The future outlook for the global EV market is very positive. The IEA projects that EV sales will reach 65% of total car sales by 2030. This growth will be driven by a number of factors, including the continued decline in battery costs, the introduction of new and improved EV models, the expansion of EV charging infrastructure, and the increasing adoption of EVs by governments and businesses.

Ketan Mehta, Co-Founder & CEO, HOP Electric Mobility, said “Global climate concerns have been driving nations toward sustainability. India’s pledge for carbon neutrality by 2070 spurs interest in New Energy Vehicles (NEVs) like, Hydrogen Fuel Cells, Electric Vehicles (EVs), among other options. ‘Auto Expo 2023’ earlier showcased a futuristic emphasis among OEMs on Green Energy-powered vehicles. Electric Vehicles’ adoption has been gaining traction due to their lower carbon footprint and cost-efficiency. In the first-half of CY-2023, the segment has experienced consistent sales, surpassing the 100,000-unit mark each month according to government estimates. Efforts are also underway to establish a nationwide charging network by the government and companies collaboratively. For example, we are expanding our ‘HOP Infinity Energy Network’, which we piloted in Rajasthan, now rolling out to other states.”

He further said, “Affordability is key for increasing access to EVs; Battery-as-a-Service is an option, keeping in mind its high upfront cost, separating battery costs from vehicle prices to sweeten the deal. Easy financing is also crucial. We at HOP Electric prioritise financial accessibility with financing at our ‘HOP Experience Centres’ and a PAY AS YOU GO system, aiming to provide quality products at reasonable prices. Our commitment to de-carbonization is aimed at reducing greenhouse gas emissions in mobility.”

Conclusion

The global as well as the Indian EV market is experiencing exponential growth, and this trend is expected to continue in the coming years. The growth of the EV market will have a number of positive impacts, including reduced greenhouse gas emissions, improved air quality, and new jobs created in the EV industry. However, there are also some challenges that need to be addressed in order to support the continued growth of the EV market, such as the need to expand EV charging infrastructure and develop more affordable EV models.