The Indian electric vehicle market was valued at USD 1,434.04 billion in 2021, and it is expected to reach USD 15,397.19 billion by 2027, registering a CAGR of 47.09% during the forecast period (2022-2027).
The COVID-19 pandemic had limited domestically produced electric vehicles due to the shutdown of manufacturing facilities and lockdowns. However, as restrictions eased, EV witnessed optimistic growth as consumers became inclined toward affordable eco-friendly transportation supported by governments incentives.
The automotive sector in India is dominated by two-wheelers (scooters, motorbikes) and three-wheelers (autos and rickshaws) that play a significant role in last-mile mobility in the country. Rising government emphasis and focus on private and government players partnership to enhance EV ecosystem in the country. Increasing investments and product launches by major OEMs into the country and their focus on localizing supply chain facilities are expected to create a positive outlook in the market.
Moreover, in India, the level of market maturity also varies according to the state depending on factors, including demographics, income levels, regulatory landscape, and urbanization. For instance, the state of Uttar Pradesh, with one of the lowest urbanization rates, has seen significant uptake of electric two-wheelers. Maharashtra, on the other hand, with a higher urbanization rate, has the highest penetration of electric three-wheelers and passenger cars. Delhi is home to the largest electric commercial vehicle fleet due to a higher demand for electric buses and trucks.
Key Market Trends
Growing Adoption of Electric Buses
The government of India has undertaken multiple initiatives to promote the manufacturing and adoption of electric vehicles in India to reduce emissions pertaining to international conventions and develop e-mobility in the wake of rapid urbanization.
- The National Electric Mobility Mission Plan (NEMMP) and Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India (FAME I and II) helped create the initial interest and exposure for electric mobility. For instance, in phase two of FAME, the government announced an outlay of USD 1.4 billion through 2022. This phase focuses on the electrification of public and shared transportation through subsidizing 7,090 e-buses, 500,000 electric three-wheelers, 550,000 electric passenger vehicles, and 1,000,000 electric two-wheelers.
To promote the domestic electric vehicle industry, the Indian government has provided tax exemptions and subsidies to EV manufacturers and consumers. As per the phased manufacturing proposal, the government has imposed a 15% customs duty on parts that are used to manufacture electric vehicles and 10% on imported lithium-ion cells. The revised duty under PMP has been proposed from April 2021.
States have also launched policies that support powertrain electrification by stimulating the demand, local manufacturing, research and development (R&D), and infrastructure development. Several states, like Delhi, Kerala, Karnataka, Telangana, and Andhra Pradesh, have formulated their electric vehicle policies, while others are in the process of doing so. For instance,
- According to the Delhi Electric Vehicle Policy 2020, the government plans to have at least 50% e-buses for all new stage carriage buses and aims for 25% of the new vehicles to be electric by 2024. In March 2021, the Delhi government announced its plans to introduce an interest subvention of up to 5% for electric vehicle (EV) purchases in the state. This initiative has been taken to promote the Delhi government's EV policy offering financial incentives on all categories of e-vehicles, i.e., two-wheelers, three-wheelers, four-wheelers, goods carriers, and electric rickshaws.
- In February 2021, the Delhi government announced a subsidy of INR 30,000 for promoting e-rickshaws as last-mile connectivity in Delhi. This, in turn, has led to the proliferation in their demand in the city, further benefiting the market.
Owing to the above-mentioned instances and developments, rising government initiatives are expected to enhance demand in the market over the forecast period.
Electric Two-wheeler Vehicles Expected to have Optimistic Growth
Though the COVID-19 pandemic resulted in lockdowns and supply chain disruptions, increasing petrol and diesel prices, government incentives, and an increase in spending for setting up charging infrastructure in the country are expected to drive demand. For instance, In FY 2020, around 152,000 units of electric two-wheelers were sold in the country compared to 126,000 units sold in FY 2019.
In the electric two-wheeler segment, electric motorcycles and scooters are popular modes. Like conventional two-wheelers, they are easier to navigate through congested roads. From a speed point of view, low-speed (up to 25 km/hr.) and medium-speed electric two-wheelers (up to 40 kmph) with conventional lead-acid batteries are projected to dominate the market over the forecast period.
This is mainly because, in terms of upfront cost, they are already on par with ICE vehicles. However, with more companies becoming eligible for FAME-II incentives, several new models are expected to be operated in the market in the coming years. Some of the key two-wheeler rental companies have already started investing heavily in expanding their fleet of vehicles to cater to the rising demand in the country. For instance,
- In February 2021, Bounce, a bike rental startup in the country, made an announcement that it was planning to launch its electric scooter in the country. However, the expected launch date has not been declared. Price is expected to be around INR 55,000 and an additional INR 1,450 per month for maintenance, including battery maintenance.
Several local major players in the country are investing heavily to enhance their production capacity of electric two-wheelers in the country to cater to enhancing the demand in the country. For instance,
- In February 2021, Ampere Electric made an announcement that it would be investing INR 700 crore in setting up a new electric two-wheeler plant in Tamil Nadu. It is expected to have the potential to start manufacturing 100,000 units in its first year of operation.
Thus, with such growing advancements and developments passenger cars segment is expected to witness steady and consistent growth during the forecast period.
The Indian EV market is moderately consolidated with the presence of major players in the market due to cheap and readily available manpower. The startups are also expanding their presence by raising funds from investors and tapping into new and unexplored cities. Companies are investing a tremendous amount in R&D and launching new models to mark their presence in the market. However, established players in the market are introducing new models to gain a competitive edge over other players. For instance,
- In August 2021, Tata Motors launched the new Tigor EV, which uses Tata's advanced Ziptron high-voltage architecture that uses a permanent magnet synchronous electric motor producing 75hp and 170Nm. These output figures allow for a 0 to 60kph time of 5.7 seconds.
- In July 2021, Audi launched 2 EVs: e-tron SUV and e-tron Sportback . The e-tron SUV is available in e-tron 50 variant with a 71 kWh battery and two electric motors. This configuration puts out 308 bhp with 540 Nm and claims a driving range between 264 km and 379 km (WLTP) on a single charge.
- In February 2021, Ampere Electric, the wholly-owned electric mobility subsidiary of Greaves Cotton Ltd, announced a phased investment potential of INR 700 crore over 10 years to set up a world-class e-mobility manufacturing plant in Ranipet, Tamil Nadu. A Memorandum of Understanding (MoU) to this effect was signed by the company with the Government of Tamil Nadu.
- The market estimate (ME) sheet in Excel format
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1.2 Scope of the Study
4.2 Market Restraints
4.3 Industry Attractiveness - Porter's Five Forces Analysis
4.3.1 Bargaining power of Suppliers
4.3.2 Bargaining Power of Consumers
4.3.3 Threat of New Entrants
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
5.1.1 Battery Electric Vehicle
5.1.2 Plug-in Hybrid Electric Vehicle
5.1.3 Fuel Cell Electric Vehicle
5.2 By Vehicle Type
5.2.1 Passenger Cars
5.2.4 Commercial Vehicles
6.2 Company Profiles *
6.2.1 Bajaj Auto Corp.
6.2.2 Mahindra & Mahindra Limited
6.2.3 MG Motor India
6.2.4 Hyundai Motor Company
6.2.5 Olectra Greentech Ltd
6.2.6 JBM Auto Limited
6.2.7 Hero Electric
6.2.8 Ampere Vehicles Pvt. Ltd
6.2.9 Revolt Intellicorp Private Limited
6.2.10 Okinawa Autotech Pvt. Ltd
6.2.11 Ather Energy Pvt. Ltd
6.2.12 Lohia Auto Industries
6.2.13 Piaggio Vehicles Pvt. Ltd
6.2.14 Kinetic Green Energy & Power Solutions Ltd
6.3 MARKET OPPORTUNITIES AND FUTURE TRENDS
A selection of companies mentioned in this report includes:
- Bajaj Auto Corp.
- Mahindra & Mahindra Limited
- MG Motor India
- Hyundai Motor Company
- Olectra Greentech Ltd
- JBM Auto Limited
- Hero Electric
- Ampere Vehicles Pvt. Ltd
- Revolt Intellicorp Private Limited
- Okinawa Autotech Pvt. Ltd
- Ather Energy Pvt. Ltd
- Lohia Auto Industries
- Piaggio Vehicles Pvt. Ltd
- Kinetic Green Energy & Power Solutions Ltd