India Electric Vehicle (EV) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

India Electric Vehicle (EV) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

  • December 2021 •
  • 86 pages •
  • Report ID: 6195707 •
  • Format: PDF
The India electric vehicle market was valued at USD 5.47 Billion in 2020, and it is expected to reach USD 17.01 Billion by 2026, growing at a CAGR of 23.47% over the forecast period (2021-2026).

The COVID-19 epidemic affected the auto sector, and demand for electric automobiles, two-wheelers, and three-wheelers suffered as a result of the disruption. According to the Society of Electric Vehicle Manufacturers (SMEV), total electric vehicle registrations fell 20% in FY21 to 236,802 units, down from 295,683 in FY20. However as the sales of EVs are picking up, the market is expected to register positive growth during the forecast period.

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 to develop e-mobility in the wake of rapid urbanization.

Key Highlights
To promote the domestic electric vehicle industry, the Indian government has provided tax exemptions and subsidies to the EV manufacturers and consumers.
The Ministry of Power issued a clarification stating that no license is required to operate EV charging stations in India. The reasoning for making it license-free is that the government considers EV charging station as a service and not the sale of electricity.
The Ministry of Road Transport and Highways also announced that all battery-operated, ethanol-powered, and methanol-powered transport vehicles would be exempted from the requirement of permits.
As per the phased manufacturing proposal, the government has imposed 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.

Following the launch of the FAME India plan, which aims to transition toward e-mobility in the light of expanding international policy commitments and environmental difficulties, the EV market in India has gained substantial momentum. Additionally, India has the world’s largest untapped market, particularly for electric two-wheelers. The automatic route market is likely to gain traction throughout the forecast period due to the fact that 100 percent foreign direct investment is permitted in this sector.

Key Market Trends

Growing Adoption of Electric Buses During the Forecast Period

India is the second most populated country in the world after China, and just like China, which has the largest electric bus fleet in the world. India is also pushing hard for the electrification of buses. Many state governments have already started procuring electric buses from Chinese and local electric bus manufacturers. The National Electric Mobility Mission Plan, 2020 was launched by the Government of India with the aim of improving national fuel security through the promotion of hybrid and electric vehicles. The Government started the Faster Adoption and Manufacturing of Hybrid and Electric vehicles (FAME) scheme which provides incentives for purchasing electric vehicles. Currently, Phase II which began in 2019 is planned to be completed in 2022.

With the growing need for controlling GHG (Greenhouse gases) emissions emitted by vehicles, the government is encouraging the use of electric-powered vehicles across various states, boosting the demand for electric buses in India. The market is driven by factors such as the increase in domestic manufacturing, rapid urbanization, and a rise in environmental awareness. For instance,

In February 2020, the Union Transport minister inaugurated India’s first inter-city electric bus service. These buses were manufactured by Mitra Mobility Solution, with a range of 300 km on a full charge.

Many local bus manufacturers who are in collaboration with some Chinese manufacturers are trying to cater to the rising demand for electric buses in India. For instance,

Olectra Greentech, India’s largest manufacturer of electric buses, announced with an investment of more than Rs 600 croreis setting up the country’s biggest electric bus factory with a capacity of 10,000 units in Hyderabad.

Electric Two-wheeler Vehicles Likely to have Optimistic Growth

At the beginning of 2021, the government began the Go Electric campaign to encourage the adoption of electric mobility vehicles in order to ensure the country’s energy security. Concerned about the high cost of importing fossil fuels, the Road Transport and Highways Ministry initiated the campaign to promote low-priced, ecologically beneficial, and indigenous electrical goods. The government’s decision to waive the registration cost for electric vehicles will convince states to offer tax advantages as well.

For extracting the maximum revenue from the rapidly growing Indian electric scooter and motorcycle market, original equipment manufacturers (OEMs) are expanding their facilities. For instance,

In December 2021, Hyundai India said that it is planning to invest Rs 4,000 crore for R&D towards the expansion of its battery-electric vehicle portfolio.
Similarly, in December 2021, Tata Motors has established a wholly-owned company, Tata Passenger Electric Mobility Limited (TPEML), with an initial capital of Rs 700 crore to spearhead its EV aspirations.

Furthermore, the availability of a considerable number of electric two-wheeler models, their low cost, as well as their availability as a substitute for conventional fuel-based vehicles. These aforementioned factors are fueling the demand in the Indian electric vehicle market.

Competitive Landscape

The Indian EV market is consolidated with the presence of major players in the market, owing to cheap and readily available manpower. 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 gets 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 with e-tron SUV and e-tron Sportback . The e-tron SUV is available in e-tron 50 variant that 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.

The startups are 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. For instance,

Electric vehicle (EV) startup, Simple Energy, has raised USD 21 million and aims to accelerate the adoption of electric vehicles by making them more accessible, affordable, and secure.

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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