The Indian EV market will achieve 7.4% penetration by 2024 based on the government incentivisation of 30% through FY30.
The penetration of electric vehicles (EVs) in India saw remarkable growth, rising from less than 1% in 2019 to 7.4% in 2024. In the research “Charging the Ecosystemic EV-olution,” by SBI Capital Markets (SBICAPS), quantitative data on the market growth of the EV industry are presented. Research by SBI Capital Markets (SBICAPS) reports a sales forecast for electric vehicles in the year FY30 which is expected to register 30-35% of the annual target but for many years the ICE vehicles will rule the Indian roads.
Global Context
In 2024 the global vehicle sales of EVs constituted a quarter of the total vehicles driven respectively, compared with a fifth last time. Global acceptance of electric vehicles is on the rise, and India is preparing for its unique path of electric vehicle development. The country will leapfrog ahead of standard automotive phases since it rapidly switched from 3G to 4G communication networks.
Incentives Driving Growth
Using carefully selected incentives that directly created a demand for EVs, the Indian government made significant contributions to the recent surge. These include:
- Electric vehicle pricing comes under a 5% GST, which differs from ICE vehicles at 28% tax.
- Several states have reduced road taxes as an element of their EV road map.
- Indian Energy sector growth accelerates through state-led programs including FAME (Faster Adoption and Manufacturing of Electric Vehicles) and PM E-DRIVE.
These economic inducements emphasise particular vehicle groups through enhanced charging network growth by enabling India to embrace tested worldwide EV technology.
Two- and Three-Wheeler Dominance
The EV market adopts two- and three-wheelers first because they cost less yet need smaller battery units. The combination of detachable batteries with home charging solutions drives the rapid wireless market evolution, especially in states where income levels are lower. Private car consumers avoid four-wheeler electric vehicles because they seek vehicles that excel in performance along with attractive design above all else.
Investment Needs
The achievement of a mature Indian EV market in FY30 will need a battery capacity installation of 100 GWh which requires an investment between ₹500-600 billion according to the report. Seven in ten battery requirements in India come from imported sources. Through backward integration and joint venture partnerships supported by the PLI scheme, the government intends to lower imports to 50% by 2030.
Developing public charging infrastructure requires approximately ₹200 billion of capital investment for its expansion. There are currently 25,000 charging stations in India yet only a small number of them operate as fast chargers.
Financing Challenges
EV adoption presents encouraging signs despite the major barrier that financing creates for the market. Personal vehicle financing for electric vehicles remains modest since banking institutions avoid such loans because of elevated LTV ratios combined with weak secondary markets for pre-owned EVs. The process of developing complete financing guidelines through the entire EV value chain requires immediate attention to resolve financing gaps.
Collaborative Efforts
India’s EV market success depends on strong collaboration across manufacturers and start-ups along with financial stakeholders and government regulators according to the report. Such consolidated strategies between stakeholders create essential conditions for sustainable sector evolution.
Future Projections
The electric vehicle market’s growth outlook for FY30 predicts formations of between 30% penetration which manufacturers and government backing help drive forward. The adoption rates are expected to vary across vehicle categories:
- Two-wheelers: The projected growth indicates that electric vehicles will reach 5.8% penetration in FY25 before reaching 20% by FY30.
- Passenger vehicles: Anticipated growth from around 2% currently to between 5-9% by FY30
The rising slope of these projections shows how sustainability combined with environmentally conscious transportation systems gains momentum worldwide.
Research indicates that the Indian EV market demonstrates increasing speed as it reaches its projected market penetration of 30% by FY30. Public support measures backed by specific incentive programs along with increased investments in battery production and infrastructure development will transform India into a worldwide electric mobility benchmark. The achievement of this target requires resolving financial barriers and strengthening collaboration between all involved entities. Indian automobiles follow sustainable directions in their transformational journey through the automotive industrial phases.
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