Electric Vehicles Market in India 2023-2028

India is on the brink of embracing an electric vehicle (EV) future, with approximately 70% of tier-I car consumers in the country expressing a willingness to consider electric cars for their next vehicle purchase. This percentage surpasses the global average of 52%, marking a notable inclination towards EVs in India.

Despite recent increases in sales in the Indian internal-combustion engine (ICE) vehicle market, the swift shift towards electrification indicates a crucial turning point for the nation. This transformation is largely fueled by global climate policies, prompting both central and state governments to roll out initiatives like the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme. These efforts are aimed at accelerating the adoption of EVs in the country. Companies such as Olectra, Mahindra & Mahindra, JBM Auto, and Ather are not only involved in the development of electric vehicles but are also actively focusing on expanding the infrastructure for EVs in the market. This dual commitment underscores the comprehensive approach being taken to facilitate the widespread acceptance of electric vehicles in India.

Market Insights:

Around 1.18 million EVs were sold in the country in FY 2023, and by the end of FY 2028, it is anticipated that around 17.30 million EVs will be sold, growing at a compound annual growth rate (CAGR) of 72.58 % between FY 2023 and FY 2028.

Electric vehicles (EVs) are now more widely available, with established car manufacturers setting ambitious goals for electrifying their product portfolios. New entrants to the market have introduced models tailored for urban settings in India. Overcoming the historical hurdle of high total ownership costs for EVs, which deterred potential buyers, has led to cost parity with internal combustion engine (ICE) vehicles. Consequently, the forecast predicts a growth in EV market penetration to reach 10 to 15% by 2030, presenting a substantial opportunity for original equipment manufacturers (OEMs), financial institutions, grid operators, and other stakeholders.

Segment insights:

Electric two-wheelers dominate the EV market; Electric scooters comprise the majority (~97%) of vehicles sold in this segment, while motorcycles and e-bikes account for the remainder.

Moreover, consumer sentiment suggests the transition to electric cars will gain momentum. Most people are eyeing EVs for their next car purchase, with a clear preference for full battery electric vehicles (49 percent) over plug-in hybrid electric vehicles (21 percent).

COVID-19 impact analysis:

The growth of the electric vehicle (EV) market in the country is anticipated to accelerate rapidly. The government has implemented measures to boost the adoption of EVs, including a reduction in the Goods and Services Tax (GST) on EVs to 5%, making them more cost-effective. Additionally, the government plans to offer capital grants to organizations, particularly in the delivery and e-commerce sectors, that actively support EV adoption. Approval has been granted for the installation of over 2,600 EV charging stations, aiming to ensure charging facilities are available every 25 kilometers, thereby addressing concerns about range anxiety. The Union Budget for 2022-23 includes various proposals to enhance India's EV landscape, such as encouraging EV use in public transport and establishing special mobility zones dedicated to EVs.