The World Economic Forum and Ola Electric highlighted that the Indian automobile industry is one of the fastest-growing markets globally, but it still just makes up 0.5% of the global EV market.
The goal is now to come on par with China, the USA and Japan in terms of the manufacturing and sales of passenger and commercial electric vehicles.
At present, India is still in the early stages of adoption. According to a McKinsey&Company report, the electric vehicle adoption rate is less than 1%. However, over the last two years, there has been a significant development in the electric vehicle space in India with both two-wheeler and four-wheeler launches from automobile giants, local players and startups alike. There are several factors that have contributed to this growth and many EV players believe that these factors will eventually lead to the exponential growth of electric vehicles across the country.
The government’s target of 30% electric vehicle adoption by 2030 is projected to be powered primarily by electrification of two-wheeler, three-wheeler, and commercial vehicles in India.
Today, the situation is gradually improving as many EV players have entered the market. The likes of Hyundai, MG Motor, Mahindra Electric and Tata have raced to take the lead in the nascent EV four-wheeler category. In the two-wheeler category, a lot of brands have emerged in the country with affordable, premium and high-power electric vehicles, including Okinawa, Tork Motors, Ather Energy, Ultraviolette, Evolet, and Ampere Vehicles among others.
Sq. Ldr. Prerana Chaturvedi, the CEO at Evolet (Rissala Electric Motors) also said that the electric vehicle market (two-wheeler segment) is growing at a very rapid pace and there are a number of key drivers that are responsible for this growth. She said, “Government incentive schemes, growing distributor and dealership network, better quality products, increased awareness and acceptance of EV by consumers are some of the key factors that are fueling the growth of the electric vehicle market in India.”
In the three-wheeler market, which occupies a majority of share in the electric vehicle market in India, Mahindra & Mahindra, Lohia Auto, Greaves Cotton among others are the leading companies. According to DataLabs by Inc42, the market share of electric vehicles is split heavily in favour of smaller vehicles, with four-wheeler cars making up just 10% of the market, and two-wheelers and three-wheelers accounting for the rest. This will only change once more manufacturers join the game and more affordable models are released.
Coronavirus and the Future of EVs
The next couple of years are crucial for the Indian electric vehicle industry as the market is poised to grow like never before. But with the coronavirus pandemic impacting almost all the sectors in India, the electric vehicle market has also been hit by supply chain problems and manufacturing disruption. The pandemic has sent oil prices crashing and at the same time, it is also putting a lot of pressure on the global supply chains for renewable energy, including power generation for electric vehicles.
According to a research, the electric vehicle market is expected to grow at CAGR of 43.13% between 2019 and 2030. Akshay Kashyap, founder of battery solutions provider GreenFuel Energy Solutions said that the electric vehicle industry will follow a J-curve in the coming years and will suddenly shoot up after 2020-2021.