Wednesday, 09 Oct, 2024
Source: Getty
However, the sales surge questions fossil fuel reliance reduction. Limited charging infrastructure, low domestic production, and high battery costs could hinder sustained growth despite momentum. The path to sustainable adoption remains unclear.
India, one of the world's fastest-growing oil markets, has now emerged as one of the fastest-growing electric vehicle (EV) markets. Although the country initially lagged behind major economic peers in Europe and Asia in adopting EVs, sales are now picking up, and investment in new auto production and energy infrastructure is accelerating. EV sales in India are projected to surge by 66 per cent this year, following a near doubling in 2023, according to a report published by research firm Counterpoint in April. This growth is attributed to state subsidies boosting demand and the expansion of supporting infrastructure.
Projections for 2024 indicate that EV sales will account for 4 per cent of total passenger vehicle (PV) sales, spurred by new market entrants and government incentives. By 2030, EVs are expected to make up nearly one-third of India’s PV market, reflecting a strong long-term growth trajectory in the automotive sector, the report mentioned.
Notably, despite the new momentum in India, the critical question remains whether this progress will be sufficient to reduce the country's dependence on fossil fuels. Key challenges include limited charging infrastructure, low domestic EV production, and high costs of EV batteries, all of which could hinder sustained growth in electric vehicle adoption over the long term.
EV sales in India saw a 55.2 per cent year-on-year growth in July, reaching 179,038 units, driven primarily by a significant 96 per cent surge in e-two-wheeler sales, according to the Federation of Automobile Dealers' Association (FADA). In comparison, total EV sales in July 2023 were 116,221 units.
Last month, electric two-wheeler sales surged to 107,016 units, a remarkable 95.94 per cent increase from the 54,616 units sold in July of the previous year, according to data from the FADA. Electric three-wheeler sales also grew by 18.18 per cent, reaching 63,667 units, up from 58,873 units in the same period last year. Meanwhile, commercial vehicle sales more than doubled, rising to 816 units from 364 units in July 2023. In contrast, passenger vehicle sales dipped slightly by 2.92 per cent, with 7,541 units sold, compared to 7,768 units in the prior year.
FADA president Manish Raj Singhania highlighted the impressive market share gains in the two-wheeler and three-wheeler segments in July 2024. He noted the remarkable year-on-year growth rates of 95.94 per cent for two-wheelers and 18.18 per cent for three-wheelers, underscoring a market share of 7.4% for two-wheelers and 57.6% for three-wheelers. These figures, according to Singhania, clearly reflect the increasing acceptance and demand for electric vehicles in India.
Experts point out that the surge in sales to several factors, including customers buying ahead of the proposed expiration of the Electric Mobility Promotion Scheme (EMPS) 2024 and original equipment manufacturers (OEMs) providing discounts on vehicles.
The EMPS scheme, initially set to expire on July 31, was extended by two months following a government notification on July 26. Experts suggest that many customers rushed to make their purchases before the extension was announced.
India aims to achieve significant EV adoption by 2030, targeting 30 per cent of private car sales, 70 per cent of commercial vehicle sales, 40 per cent of bus sales, and 80 per cent of two-wheeler and three-wheeler sales to be electric. This ambitious goal translates to having 80 million EVs on the roads by 2030. Additionally, the country seeks to achieve full domestic EV production through its 'Make in India' initiative.
According to Fortune Business Insights, the Indian EV market is expected to grow significantly from $3.21 billion in 2022 to $113.99 billion by 2029, achieving a compound annual growth rate (CAGR) of 66.52 per cent. This global shift toward EVs is likely to generate new opportunities for automotive suppliers. Additionally, the Indian EV battery market is projected to increase from $16.77 billion in 2023 to $27.70 billion by 2028.
