Urbanization and technological development in India are playing a significant role in the EV market. With the growth reaching almost a CAGR(Compound Annual Growth Rate) of 23% by 2030, India holds a great opportunity for the EV industry. The EV market potential in India is mainly because of the push towards sustainable development, which drives people towards a better environment and cost-efficient transportation. In this article, we shall discuss the potential of the EV market in India and the prospects in the EV industry.
Current State of the EV Market in India
India's electric vehicle (EV) market is currently valued at $34.8 billion in 2024, it's expected to zoom past $120 billion by 2030, reflecting a robust growth rate of 22.92% annually. The Indian government has introduced several initiatives and programs to promote the adoption of electric vehicles. Some of the key initiatives are as follows.
- FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles):
- Launched in 2019, this scheme provides incentives for the purchase of electric vehicles and supports the establishment of EV infrastructure. The Government has allocated a budget of 10,000 crores for this initiative.
- Despite the launch of FAME || in 2019, The Government revised the FAME II scheme to offer 50% more subsidy at ₹15,000 per kWh on electric bikes and scooters in India.
- The government has also allocated ₹1000 crores to set up charging stations for e-buses, one slow charging unit for each electric bus, and one fast charging station for ten electric buses.
- The central government of India also incentivizes 5 lakh three-wheelers, 7000 electric buses, and 35,000 four-wheelers.
- National Electric Mobility Mission Plan (NEMMP) 2020
- NEMMP aims to enhance national energy security, mitigate adverse environmental impacts from road transport vehicles, and boost domestic manufacturing capabilities.
- India's NEMMP plan, launched in 2013, aims to boost electric vehicles for cleaner air and a more robust domestic EV industry.
- While initial targets weren't fully met, NEMMP's vision remains relevant. New initiatives like EMPS 2024 are building on this foundation. The Electric Mobility Promotion Scheme (EMPS) 2024, launched in April 2024, is a shorter-term initiative than NEMMP. It provides subsidies for electric two-wheeler and three-wheeler purchases to accelerate EV adoption in India further.
- The Electric Mobility Promotion Scheme (EMPS) 2024 offers tiered subsidies based on the type of electric vehicle:
- Electric Two-Wheelers: Up to ₹10,000 per vehicle.
- Electric Three-Wheelers (E-Rickshaws & E-Carts): Up to ₹25,000 per vehicle.
- Large Electric Three-Wheelers (L5 Category): Up to ₹50,000 per vehicle.
- The Electric Mobility Promotion Scheme (EMPS) 2024 does not provide subsidies for electric cars in India. The program promotes the adoption of electric two-wheelers and three-wheelers, which are more affordable and have a larger market share than electric cars in India.
For businesses and investors, this is the time to explore opportunities in the Indian EV market. Engage with local stakeholders, build charging stations, invest in infrastructure, and contribute to the sustainable mobility revolution in one of the world's fastest-growing economies.
EV Market Segments: EV Market Potential in India
We already know that the electric vehicle (EV) market in India is known for its exponential growth, driven by governmental support, increasing environmental awareness, and technological advancements. Understanding the potential and key segments within this market is crucial for stakeholders aiming to capitalize on the opportunities it presents. Let’s learn about different segments of the EV Market in India.
Vehicle Type Segments
This segment holds all Electric Vehicle types, with various kinds like Passenger Vehicles, Commercial Vehicles, Two-wheelers, and Three-wheelers.
Passenger Vehicles
- Battery Electric Vehicles (BEVs): Dominating the passenger vehicle segment, BEVs are favored due to government incentives, rising fuel prices, and increased environmental awareness. These vehicles are completely electric and have zero gasoline. For ex., Tata Nexon EV, MG Comet, etc.
- Plug-in Hybrid Electric Vehicles (PHEVs): Plug-in hybrid electric vehicles (PHEVs) are a type of electric vehicle that combines an electric motor with a gasoline engine. Though currently less popular than BEVs, PHEVs offer a transitional solution for consumers hesitant about fully switching to electric. PHEVs are not as common in India as they are in other countries. The PHEVs available in India are luxury ones like the Volvo XC40 Recharge, Mercedes-AMG GT 63 S E Performance, and more.
Also Read: What is a self-charging hybrid car and How does it work?
Commercial Vehicles
- Electric Buses: With urban areas focusing on reducing pollution, electric buses are gaining traction in public transport systems. In Karnataka, there are 6000+ E-buses that are under BMTC and KSRTC. These are mostly manufactured by Eicher Motors, Tata Motors and more.
- Electric Trucks and Vans: Logistics and delivery companies are increasingly adopting electric trucks and vans to reduce operational costs and emissions. Porter services that are quite famous in Bangalore are some of the most common electric trucks and vans.
Two-wheelers and Three-wheelers
- Electric Scooters and Motorcycles: EV scooters and bikes are a significant segment of India due to the high demand for affordable and efficient urban transport solutions. The most commons EVs in two wheelers are Ather, Ola, Bajaj Chetak, Revolt RV 400(Motorbike), etc.
- Electric Rickshaws (e-Rickshaws): Rickshaws are the most common public transport in India and the e-Rickshaws are becoming increasingly popular in both urban and rural areas. Mahindra Treo Yaari, Saarathi DLX are some of the common e-rickshaws.
Price Category Segments
This segment focuses on luxurious and the cost affordable Electric vehicles. Let’s learn about the different priced Electric cars in India.
Luxury EVs
These are high-end electric vehicles with top-of-the-line features, technology, and performance. Luxury EVs tend to be more expensive than other EV segments. For example, Mercedes-Benz EQS, Audi e-tron GT.
Mid-priced EVs
This is the fastest-growing segment of the EV market in India, offering a good balance between price, features, and range. Mid-priced EVs are a good option for many consumers who are looking to switch to electric vehicles. For example, MG ZS EV, Tata Nexon EV.
Affordable EVs
While still a relatively small segment, there is a growing number of budget-friendly electric vehicles available on the market in India. These EVs are typically smaller and have shorter ranges, but they offer a more affordable way to go electric. For example, Tata Tiago EV, Mahindra eVerito, MG Comet EV.
Also Read: What is a Self-Charging Hybrid, and How Does It Work?
The table below shows the approximate prices of the most common Electric Vehicles in India
Note: These prices can vary from state to state due to taxes and incentives.
Now that we are quite aware of the prices, segments and the market, let’s understand what the Government of India provides for the EV owners and fleet managers.
Government Initiatives and Policies: EV Market Potential in India
Continued government support through policies and subsidies will play a crucial role in accelerating the growth of the EV market in India. Future policies aimed at promoting domestic manufacturing and research and development will further strengthen the market.
- FAME India Scheme
As we already discussed about the FAME ||, Let’s have a quick overview of the incentives given by the Government.
- The FAME scheme launched in 2015, currently in Phase II: This section describes the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) program, outlining its launch year and current phase.
- Goals and Achievements: FAME II aims to increase the number of EVs on Indian roads significantly. The scheme encourages the development and production of EVs and EV components within India. By incentivizing EV purchases, FAME II aims to overcome "range anxiety," a concern for potential EV buyers regarding the limited driving range of some models.
- Incentives provided by FAME II: FAME II offers financial subsidies directly to consumers who purchase electric vehicles. These subsidies vary depending on the type of vehicle (2-wheeler, 3-wheeler, 4-wheeler) and its battery capacity. The aim is to make EVs more affordable and attractive compared to gasoline-powered vehicles. FAME II prioritizes the electrification of public transport fleets, such as buses and taxis. This can significantly reduce emissions and improve air quality in cities.
- State Electric Vehicle Policies
Many Indian states offer EV policies to boost adoption. These include subsidies on electric vehicles, free parking, and lower taxes. Some states like Delhi target public transport electrification, while Karnataka aspires to be the "EV Hub of India" with skill development programs. These policies vary, and details are best found on individual state government websites.
Also Read: EV Business Opportunities in India
- Production Linked Incentive (PLI) Schemes
This focuses on Advanced Automotive Technology (AAT) and ACC Battery Storage and explains how PLI schemes incentivize the development and production of critical EV components like advanced automotive technology and batteries.
When it comes to Investment and manufacturing capacity PLI schemes aim to attract investments and boost domestic manufacturing capabilities for EVs. PLI schemes function by offering financial incentives to companies that establish or expand their manufacturing facilities in India. These can also include electric motors, or electric batteries.
- Incentives for running an EV Charging station in India
The Government of India (GOI) offers a few different incentives to encourage the establishment of charging stations for electric vehicles (EVs). These incentives aim to make setting up and running charging stations more attractive to businesses:
- Subsidies on electricity tariffs: Charging stations benefit from electricity tariffs capped at a rate exceeding the Average Cost of Supply by 15%. This translates to cheaper electricity compared to commercial rates. In states like Karnataka, there are several other electricity benefits.
- Subsidies on chargers: The FAME scheme offers upfront subsidies to help purchase charging equipment. The subsidy amount varies depending on the charger type, with slow chargers receiving ₹10,000 each and fast chargers getting up to ₹1 lakh.
- Subsidized land rates: Some state governments are providing land at concessional rates, as low as 10-20% of the market value, to encourage setting up charging stations.
- Faster approvals and priority connections: Compared to other commercial establishments, charging stations get preferential treatment when acquiring electricity connections from power distribution companies. Additionally, public sector oil marketing companies are mandated to prioritize setting up charging stations on their premises.
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Major Players in the Indian EV Market
The Indian electric vehicle (EV) market is vibrant and growing, with several major players leading the charge. Let’s take a look at the top players who is playing a huge role in the EV market potential in India.
Leading Companies
- Tata Motors
Tata Motors has established itself as a leader in the Indian EV market through a diverse product lineup, competitive pricing, and a strong focus on customer satisfaction. Their extensive network and commitment to innovation have helped it maintain a dominant position.
Market Share: Tata Motors commands a significant 72% market share in the Indian EV market.
Key Models: The cars listed below are their top-selling EVs.
- Tiago EV: An affordable and efficient hatchback designed for urban commuting. The price ranges anywhere from 7 lakhs to 10 lakhs.
- Nexon EV: One of the best-selling electric SUVs in India, known for its robust performance and range. The price ranges anywhere from 14 lakhs to 20 lakhs.
- Tigor EV: A compact sedan offering a balanced mix of comfort, range, and affordability. The price ranges anywhere from 12 lakhs to 18 lakhs.
Suggested Read: EV Charging Business Ideas
- MG Motors
MG Motors has carved out a niche in the Indian EV market by offering premium electric vehicles with cutting-edge technology and safety features. The MG ZS EV, in particular, has been well-received for its range, performance, and overall value.
Market Share: MG Motors holds a 10.8% market share.
Key Model: These EVs from Morris Garages are among the top-selling cars in India.
- MG ZS EV: A popular electric SUV is known for its advanced features, safety, and performance.
- MG Comet EV: This compact EV suitable only for city-usage, is one of the top selling cars in busy cities of India.
- Mahindra
Mahindra, a long-established player in the Indian automotive industry, has leveraged its expertise to make a mark in the EV segment. The XUV400 reflects the company's focus on creating robust, high-performance electric vehicles that cater to both urban and rural markets.
Market Share: Mahindra has a 9% market share.
The key Model is XUV400, An electric SUV that combines the ruggedness and reliability of Mahindra's traditional vehicles with modern electric technology. This price ranges from 15 lakhs to 20 lakhs.
Also Read: Understanding Types and Connectors of EV Charger Units
Notable Emerging Companies
- Ola Electric Mobility Pvt. Ltd.
Ola Electric has quickly emerged as a significant player in the Indian EV market, particularly in the two-wheeler segment. The company has made headlines with its ambitious plans and innovative approach, including the launch of the Ola S1 electric scooter. Ola's aggressive marketing, competitive pricing, and expansive manufacturing capabilities have driven its rapid growth.
Market Share: Ola Electric achieved a 19.07% market share in 2023.
Average price in the market: 1.04 lakhs - 1.30 lakhs (Price varies in different states of India)
- TVS Motor Company Limited
TVS, a well-known name in the Indian two-wheeler market, has successfully ventured into the EV space. The company offers a range of electric scooters and motorcycles designed to meet the needs of urban commuters. TVS's strong brand reputation, extensive dealership network, and focus on quality have helped it gain a foothold in the competitive EV market.
Market Share: TVS Motor Company held an 11.89% market share in 2023.
- Ather Energy
Ather Energy has made a significant impact in the Indian EV market with its innovative and tech-savvy electric scooters. The company's focus on design, performance, and user experience, along with the establishment of a robust charging infrastructure, has positioned it as a strong competitor in the two-wheeler segment. This is one of the top-selling EV scooters in India and especially on the roads of Bangalore, where their headquarters are located.
Key Models:
- Ather 450X: Known for its high performance, advanced features, and smart connectivity options.
- Ather 450 Plus: A more affordable variant offering a balance of performance and value.
Also Read: Top Fleet Management Companies in India
Expansion of Charging Infrastructure
The expansion of charging infrastructure is a critical component for the growth and sustainability of the electric vehicle (EV) market in India. Adequate charging facilities are essential to support the increasing number of EVs on the road and to alleviate range anxiety among potential buyers.
There are several fleet management companies like Pulse Energy, which focuses on the Setting up and managing exclusive or public charging stations, Integrating with various charging networks across India, and helps in Monitoring charging activity and optimizing costs.
The Indian EV market's growth hinges on robust charging infrastructure. Government initiatives like the FAME II scheme and state policies, alongside private investments from automotive and energy companies, are driving expansion. In July 2020, EESL launched India's first EV charging plaza in New Delhi, showcasing effective public-private collaboration. To meet demand, India will need 1.32 million charging stations by 2030, aiming for one charger per 40 EVs. Overcoming challenges like high initial costs and grid capacity requires continued investment and innovation, which is crucial for sustainable electric mobility.
Conclusion
The expansion of charging infrastructure is crucial for the success of India's EV market. Government initiatives, private investments, and projects like EESL's EV charging plaza are making significant strides. To support the anticipated growth, India needs 1.32 million charging stations by 2030, ensuring an ideal ratio of one charger per 40 EVs. Future prospects are promising, with continued investments, technological advancements, and public-private collaborations expected to overcome current challenges. This will pave the way for sustainable electric mobility, reduce carbon emissions, and position India as a leader in the global EV market.
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