Electric two-wheelers, eRickshaws, and electric auto-rickshaws will occupy a large chunk of the Indian EV market, followed by electric four-wheelers and buses.
The nascent Indian electric vehicle (EV) market is fast emerging as a sunrise sector, and the country is expected to aggressively push toward electrification. Frost & Sullivan’s recent analysis, Indian Electric Vehicle Growth Opportunities, finds that mega trends such as rapid urbanization, rising fuel costs, traffic congestion, pollution, emerging economic growth, and energy security will drive EV adoption in the country in the next few years.
Driven by India’s emission norms, high cost of compliance, and lucrative incentive policies, the buoyant EV industry is likely to witness more than eight-and-a-half-fold growth, reaching 4,844,500 million units sales by 2025 from 556,036 units in 2019. Of the total estimated EV sales, electric two-wheelers (e2Ws), eRickshaws, and electric auto-rickshaws (eAuto) will occupy a large chunk of the market, followed by electric four-wheelers and electric buses. Domestic original equipment manufacturers (OEMs) such as Tata Motors and Mahindra & Mahindra and foreign OEMs such as Hyundai and MG have entered the sector with their flagship EVs. They are expected to launch various new EV models in India.
“OEMs need to leverage the emerging battery industry to make EVs affordable. The developments in the lithium-ion battery field have created new chemistries/production technologies that reduce the cost of the battery significantly and increase its capacity. This allows OEMs to produce long-range EVs at affordable prices, increasing the sales volume of EVs,” said Prajyot Sathe, Research Manager, Mobility Practice at Frost & Sullivan. “Additionally, the massive success of battery swapping, especially in e2Ws and eAuto segments, and increasing charging infrastructures are prominent factors driving EV adoption in the country.”
Sathe added, “With the EV sales still revolving around incentives/subsidies, companies should align business strategies to the government initiatives. These strategies should be flexible to help companies shift gears when needed without a lot of effort. Further, the government is also looking to localize battery production that will bring the vehicle costs down. OEMs need to secure sufficient battery supply to avoid any production halts or bottlenecks.”
To tap into the growth prospects brought about by the EV and its component industry, market participants need to focus on: