Electric Vehicles Market in India 2024-2029

India's electric vehicle (EV) market is witnessing significant growth, with a shift towards electrification driven by government initiatives such as the FAME scheme. Opportunities include government incentives like reduced GST and extensive EV charging infrastructure development.

Companies such as Olectra, Mahindra & Mahindra, JBM Auto, and Ather are developing not only electric vehicles but are also concentrating on the expansion of EV infrastructure development for the market.

Market insights:

The EV market in India witnessed sales of 600,396 units of EVs in 2023. This figure is expected to reach 13,411,105 units by the end of 2029, expanding at a compound annual growth rate (CAGR) of 68.59% during the 2024 - 2029 period.

The EV market's expansion is supported by a combination of declining costs, technological advancements, and a growing shift in consumer preference toward sustainable transportation. By 2029, EVs are expected to account for 10-15% of the total automobile market in India, with both legacy and emerging manufacturers investing heavily in electrification. The Indian government has also played a crucial role by lowering the GST on EVs to 5%, making them more affordable for the broader population. Financial institutions and grid operators are expected to tap into this rising demand.

Segment insights:

Electric two-wheelers dominate the Indian EV market, with scooters making up approximately 97% of sales in this category. Motorcycles and e-bikes form a smaller portion but are gaining traction as well. The four-wheeler segment, while smaller, is rapidly evolving as consumers increasingly consider EVs for their next vehicle purchase, with a preference for full battery electric vehicles (49%) over plug-in hybrids (21%). As battery technology improves and charging infrastructure expands, electric cars are expected to achieve cost parity with internal combustion engine (ICE) vehicles, accelerating the shift toward electrification.

Market Opportunities:

Significant opportunities are emerging in the EV ecosystem, supported by policy measures and market dynamics. The Indian government’s focus on expanding charging infrastructure - installing over 2,600 stations with a target of one every 25 kilometres - aims to mitigate range anxiety, a major barrier to EV adoption. Additionally, capital grants are being offered to logistics and e-commerce companies to promote EV usage in delivery services. The Union Budget for 2022-23 also prioritized EV penetration in public transportation and the establishment of dedicated EV mobility zones. With the shift toward electrification, stakeholders across the value chain, from original equipment manufacturers (OEMs) to financial services and energy providers, can seize vast opportunities. Companies like Tata Motors, Ather Energy, and Mahindra are poised to capitalize on the increasing demand for EVs by offering a diverse range of products and investing in the expansion of the charging network.