Indian Electric Vehicle Industry 2021, Growth, Outlook, Future Opportunities and Forecast 2021-2027

 

The electric vehicle industry in India is growing at a faster rate. Electric mobility will contribute to balancing energy demand, energy storage, and environmental sustainability. Unlike internal combustion engines (ICE) vehicles which produce a high amount of greenhouse gases into the environment, EVs produce zero carbon emission. The growing concern over the environmental pollution generated by the ICE is the major reason for the adoption of electric vehicles and replacing them with ICE engine vehicles. Further, cohesive government policies and the introduction of various new EV models are also fueling the Indian electric vehicle industry. The reducing cost of the EV due to the decreased prices of Li-ion batteries and fluctuating prices of fossil fuels are also augmenting the growth of the EV market in India. In July 2019, the government of India (GoI) reduced the Goods and Service Tax on electric vehicles from 12.0% to 5.0% which will also raise the adoption of EVs in India.

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Government Policies and Subsidies

The Central and State government of India has taken initiative by providing incentives and subsidies to promote electric mobility. Besides this, the Government of India has also come up with various schemes plan for both electric vehicle production and charging infrastructure associated with it.

Faster Adoption and Manufacturing of Hybrid Electric Vehicle (FAME): The Indian government has adopted the FAME-I scheme for faster adoption and manufacturing of hybrid electric vehicles with an outlay of $130 million to providing subsidies to electric cars, buses, and 2 & 3 -wheelers.  This phase was lasted from 2015-2019, while the second phase, FAME II was being activated in 2019 under which an outlay of $1.4 billion for purchasing EVs and deployment of charging infrastructure. For instance, under FAME phase II, the government has allocated around $145 million for EV charging infrastructure. The fund is allotted for the next three financial years from April 2019 to April 2022, with a ratio of 3:4:3. Under the scheme, the government has planned to develop 2,700 charging stations in metros, and other cities that have a population of more than a million.

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National Electric Mobility Mission Plan (2020): The plan was launched by the Government of India with aiming to achieve national fuel security by promoting hybrid and electric vehicles in the country. FAME is part of this plan.

Electric Vehicle Sells in India

Battery electric vehicle has the highest share in the Indian EV market. The electric vehicle sales increased by 20% excluding E-rickshaws in 2019-2020 as per the Society of Manufacturers of Electric Vehicle (SMEV). Around 1.56 lakh EVs sold in 2019-2020, under this Electric two-wheedler accounted for nearly 97.5% of all EVs sold in FY20.

Foreign Direct Investments for Electric Vehicle Market

The automobile sector of the Indian market accounted for 49% of India's manufacturing GDP, and 7.1% of overall India's GDP in 2020. As per Invest India, the Indian government has allowed 100% FDI for EVs. The two-wheeler segment is expected to grow at $200 million by 2023 and the Three-wheeler segment is expected to grow at the value of $1 billion by 2030 and the four-wheeler segment is expected to be valued at $700 million by 2025. India is expected to be the world's third-largest automotive market by volume in 2026.

Challenges for the EV Market in India

There is no shortfall for government incentives in India still the production and availability of electric vehicle is less. Some of the challenges that become the barrier to the growth of EV markets are:

·        Poor charging infrastructure.

·        High manufacturing cost.

·        EV range anxiety among consumers.

·        The high price of EVs in the Indian Market.

·        Import of lithium-ion batteries from other countries.

·        Scarcity of repair option and after purchase assistance.

·        Improper supply of electricity in underdeveloped areas in India.

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Electric Vehicle and New Launches in the Indian EV Market:

·        The electric model by Tata Company, Tata Tigor EV with a price range of ($15,000-$18,000) is the cheapest EV model in the Indian market.

·        Mercedes-Benz EQC is the most expensive electric car in the Indian market with a cost of $140,000. Followed by Tata Nexon EV ($19,000 -$23,000), MG ZS EV ($29,000 - $33,000), Hyundai Kona Electric ($33,000).

·        JBM auto launched electric bus ECO-LIFEe-9, incorporated with fast charging lithium batteries with (125-150) km in a single charge.

·        Mahindra & Mahindra launched the eKUV100 electric model with a price range of Rs 8.25 lakh along with a 147km range capacity.

·        The new Ather 450X Scooter with a price range of $1,362 comes up with advanced improvement than its previous model Ather 450.

 

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