India’s EV market is set for rapid growth, driven by government incentives, local manufacturing, and expanding charging infrastructure.
The overall growth rate in the Indian EV market is expected at a CAGR of 35- 40% until 2027 as per a report by Niveshaay. The sales of EVs in the country according to the forecast may reach 3 to 4 million units by 2025 and grow up to 10 million units by 2030. At the present, the two- and the three-wheelers hold the largest share of the market and contribute approximately 80% to the electric vehicle sales.
Government policies and action plans
Part of the goals of the Indian government for the manufacturing industry is to increase levels of local production while decreasing imported goods. The commodity is being supported in this growth by mechanisms such as the production-linked incentive (PLI) schemes and the lowering of customs duties on key minerals. Still, India’s conservative approach to policy support and market development is making the country a worthy contender for the main EV players, added Arvind Kothari, Founder of Niveshaay.
Projected Market Penetration
It is anticipated that by 2030, India’s electric vehicle projection is likely to comprise at least 30 – 40 % of two-wheelers, three-wheelers and passenger vehicles out of the overall market sales. This growth will also be buoyed by the increased use of electric buses as well as commercial vehicles. It is approximated that over two million public charging points will be needed for bolstering the growing base of EVs.
Budgetary Support and Incentives
This should be music to the ears of manufacturers since the Union Budget has been crafted to offer more funds to the EV sector. While the FAME II scheme was initially running at Rs 10,000 crore in FY2019-20, the many times over scaled up budget touches Rs 19,744 crore for the Green Hydrogen mission along with Rs 2,908 crore for the ongoing FAME II scheme in the FY2023-24 budget. Also, the Electric Mobility Promotion Scheme (EMPS) has added Rs 500 crore to facilitate the use of electric two and three wheelers.
Global Outlook
Therefore, India has the potential to become a significant stakeholder in the global EV market in the near future. Even though China accounts for 60% of the global electric vehicle sales at the moment, the burgeoning middle class, cities and government incentives in India are pushing the demand for inexpensive electric vehicles forward.
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