India's automotive sector is dominated by two-wheelers (scooters, motorcycles) and three-wheelers (autos and rickshaws), which play an important role in last-mile mobility in the country. The electric vehicles industry at a nascent stage in India. One of the main reasons behind India's recent move to accelerate its transition to electric mobility is rising oil import prices, increasing pollution, and international commitments to tackle global climate change. Also, electric vehicles are gaining attention around the world as they contribute to reducing emissions and depleting natural resources. India's EV market is also developing rapidly, with nearly 1.01 million vehicles sold in 2022, a year-on-year increase of 210%.
EV Sales in India
India surpassed Japan & US in auto sales for the first-time last year to become the world's third largest auto market. According to the India Energy Storage Alliance (IESA), the Indian EV market is expected to grow at a CAGR of 49% from 2022 to 2030. Between 2017 to 2022, the EV sales grew around 1072% YoY. By 2030, NITI Aayog wants to see EV sales penetration for all commercial vehicles reach 70%, for private vehicles reach 30%, for buses reach 40%, and for two- and three-wheelers reach 80%. This is consistent with the objective of achieving net zero carbon emissions by 2070. Over the last six years, 1.836 million of EV running in India, according to the Ministry of Road Transport & Highways (Vahan dashboard).
State wise -EV Sales in 2022
In India, Uttar Pradesh held the highest share of electric vehicle sales in 2022, with the number of units sold across all segments reaching 1,62,868, followed by Maharashtra with 1,36,032 units and Karnataka with 95,909 units. Uttar Pradesh dominated the three-wheeler transport segment, while Maharashtra and Karnataka led the two-wheeler segment, respectively.
In January 2023, a total of 1,00,915 units’ electric vehicles were sold in India. Out of which 64,353 units Two-Wheeler (Non-Transport) compared to 29,472 units sold in Jan’22. Sales of Three-Wheeler (Transport) reached 32,908 units, a 73.95% increase over the same month last year. According to the Ministry of Road Transport & Highways (Vahan dashboard), in 2022, 6.26lakh units e-Two-Wheeler (Non-Transport) were sold, a 306% increase over last year, 3.38lakh units e-three-Wheeler (Transport) with an increase of 120% over last year, 33,106 units Light Motor Vehicle (170% increase), 4,966 units Light Passenger Vehicle (568% increase over last year).
Electric two-wheeler and electric passenger vehicle market share 2022
Ola, Okinawa, Hero Electric, Ampere, Ather, TVS controls the electric two-wheeler market in India with a combined market share of 77%. Ola has a market share of 17% followed by Okinawa and Hero Electric with 16% each. Ampere with an 13% market share, Ather 8%, and TVS 7% share are slowly gaining the market. In the passenger vehicle segment, Tata Motors enjoys a commanding position in electric vehicle space with a market share of 82%, led by their two key models, Nexon and Tigor EV. MG Motors India enjoys the second position and offers the longest-range EV (MG EZS provides 439 KM range on a single charge) followed by BYD India, KIA Motors, M&M.
Three-Wheeler Sales Trend
In Jan’23, 50% of the total three-wheeler vehicles sold were electric whereas in 2022, 52.5% of the total three-wheeler vehicles sold were electric followed by 29% CNG, and 11.7% Diesel vehicles were sold during the year 2022.
Top 10 electric Three-Wheeler Brands
Electric three-wheelers are leading the EV revolution in India. Compared to sales of electric passenger cars, sales of three-wheelers are substantially higher. The number of electric three-wheeler sales surpassed 3.38lakh in 2022. The development of electric 3-wheelers is primarily driven by lower maintenance costs, government EV efforts, and rising gasoline prices. Small business owners and rickshaw drivers are converting to electric vehicles in order to boost their revenues. Mahindra Electric is leading the EV 3-wheeler sales list of last year. In 2022, Mahindra Electric sold 28,623 EVs across India with an increase growth of 176%. YC Electric Vehicle (popularly known as Yatri EV), a New Delhi-based manufacturer of electric rickshaws and electric carts, is in the second position. The company sold 27,880 electric three-wheelers, an increase of 87% in 2022 from 2021. Yatri is a popular electric rickshaw brand in North India. Number three on the sales list is Saera Electric, better known as Mayuri. Mayuri sold 18,456 (172% increase from 2021) 3-wheeler EVs, followed by Dilli Electric (13172, 158%), Champion Poly Plast (12720, 94%), Mini Metro (10486, 204%), Unique International (9948, 161%), Terra Motors (7457, 135%), and Piaggio (7355, 230%).
Opportunities in Electric Vehicles
India's electric vehicle industry is gaining momentum with increased commitment to 100 FDI possible, new manufacturing centers and improved charging infrastructure. Other growth drivers for India's EV industry are government subsidies and policies encouraging deep discounts on Indian-made electric two-wheelers, and boosting local production of ACC batteries. According to Center for Energy Finance (CEEW-CEF), the Indian EV market represents a US$206 billion opportunity by 2030, if India makes steady progress towards reaching its ambitious 2030 targets. This will require a combined investment of more than $180 billion in vehicle production and charging infrastructure.
Also the EV industry could add 10 million new direct employment by 2030, creating 50 million new indirect jobs in the sector, according to the Ministry of Skill Development and Entrepreneurship (MSDE).
In 2021, the India electric car industry was estimated to be worth $1.45 billion. The market is anticipated to expand at a CAGR of 66.52% between 2022 and 2029, rising from $3.21 billion to $113.99 billion, according to Fortune Business Insights report. Numerous economic opportunities are made available by India's EV drive in the mobility, infrastructure, and energy sectors. These prospects include, among others, those in the battery infrastructure, solar vehicle charging, EV OEM market, EV franchising, and battery swapping technologies. NITI Aayog estimates that a total investment of US$ 267 billion (Rs. 19.7 lakh crore) in EVs, battery infrastructure, and charging infrastructure is needed to make the full transition to EVs. The industry has significantly boosted the coalition's FY24 budget for electric vehicle production, hydrogen fuel adoption and changing technology adoption.
Finance Minister Nirmala Sitharaman disclosed a budget allocation of INR 35,000 crore in the Union Budget 2023–24 for significant capital investments intended to meet the energy transition and net-zero targets by 2070. she also explained that the government will support a battery energy storage system with a capacity of 4,000 MWh by funding the profitability gap.
The government has already started programmes for electric vehicle manufacturers as Production Linked Incentive Scheme (PLI) and the Faster Adoption of Manufacturing of Electric Vehicles Scheme – II (FAME – II). For its FAME-II scheme to subsidize and encourage the adoption of renewable energy vehicles, the Budget has allotted INR 51.72 billion (about $631 million). Compared to prior years, this funding allocation has increased by 80%.
India's electric vehicle market is expected to expand significantly during the next few years. The nation is ideally situated to switch to a more sustainable and environmentally friendly form of transportation thanks to supporting government legislation, rising consumer awareness, and technological breakthroughs. To reach the goal of 100% EV use by 2030, the government has launched a number of measures to boost EV manufacturing and adoption across the nation and due to the rise in the demand for EVs, the opportunity for both domestic and foreign businesses to participate in and support the expansion of India's EV ecosystem is enormous.