Advantage India
Robust
Demand
* Over 50% of 3-wheelers, about 5% of 2-wheelers, and 2% of cars bought in 2024 are EVs.
* The Indian EV battery market is projected to surge from US$ 16.77 billion in 2023 to a remarkable US$ 27.70 billion by 2028.
* Indian automakers will launch nearly a dozen new EVs in 2025, focusing on premium models, as India’s EV sales rose 20% despite slowing global demand, with a 30% target by 2030.
Opportunities
* Union Minister of Commerce & Industry, Mr. Piyush Goyal, launched Bharat Mobility Global Expo 2025, outlining India's vision to lead in EVs and target Rs. 8,65,000 crore (US$ 100 billion) exports through innovation and cost-competitiveness.
* The imperative highlighted by a recent Confederation of Indian Industry (CII) report to set up 1.32 million charging stations by 2030 presents a significant growth opportunity for the electric vehicle sector.
Policy
support
* In Phase-II of the FAME India scheme, the Ministry of Heavy Industries (MHI) approved a capital subsidy of Rs. 800 Crore (US$ 96.13 million) to set up 7,432 Electric Vehicle Public Charging Stations (EVPCS).
* A dedicated policy FAME II with a budgetary outlay of Rs. 10,000 crore (US$ 1.43 billion), to incentivize electric vehicle consumption and support manufacturing.
* The Ministry of Heavy Industries launched the PM E-DRIVE Scheme with Rs. 10,900 crore (US$ 1.28 billion) to boost India's EV ecosystem, promoting electric mobility and reducing fossil fuel reliance.
Investments
* India is emerging as a global hub for auto component sourcing and the industry exports over 25% of its production annually.
* India’s auto component industry will see Rs. 25,000-30,000 crore (US$ 2.89-3.46 billion) investment in FY26 for capacity expansion and EV parts, after Rs. 15,000-20,000 crore (US$ 1.73-2.31 billion) in FY25, says ICRA.
Introduction
India's Electric Vehicle (EV) sector is experiencing rapid growth, fuelled by government incentives, rising environmental concerns, and technological advancements. With initiatives like the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, India aims to significantly increase EV adoption, revolutionizing its transportation landscape towards sustainability and innovation.
India has established an objective to elevate the proportion of Electric Vehicle (EV) sales to 30% in private cars, 70% in commercial vehicles, 40% in buses, and 80% in two-wheelers and three-wheelers by the year 2030. This equates to an ambitious objective of 80 million EVs on Indian roads by 2030. Additionally, India strives for complete domestic EV production through the 'Make in India' initiative.
In 2023, the global electric vehicle market was valued at US$ 255.54 billion. It is forecasted to reach approximately US$ 2,108.80 billion by 2033, growing at a significant CAGR of 23.42% from 2024 to 2033.
Sales of electric vehicles (EVs) in India saw a notable increase in January 2025, with a 19.4% MoM and 17.1% YoY growth, reaching 1,69,931 units.
In 2023, electric vehicle sales in India saw a significant increase of 49.25%, reaching 1.52 million units. Although the sector is still in its early stages, it is steadily gaining traction.
Indian automakers will launch nearly a dozen new EVs in 2025, focusing on premium models, as India’s EV sales rose 20% despite slowing global demand, with a 30% target by 2030.
The shift towards electric vehicles on a global scale will create fresh opportunities for automotive suppliers. The Indian EV battery market is projected to surge from US$ 16.77 billion in 2023 to a remarkable US$ 27.70 billion by 2028.
On the infrastructure side, as of February 2024, there are 12,146 operational public EV charging stations nationwide, Maharashtra has the highest number of EV charging stations, followed by Delhi and other states. A recent Confederation of Indian Industry (CII) report emphasized the necessity of establishing at least 1.32 million charging stations in India by 2030 to facilitate the rapid growth of electric vehicles, requiring over 4,00,000 installations annually.
Major industry players are striving to improve electric vehicle charging infrastructure, Hyundai Motor India is enhancing accessibility to electric vehicles nationwide, expanding its ultra-fast EV charging network with 11 new stations strategically located in cities including Mumbai, Pune, Ahmedabad, Hyderabad, Gurugram, and Bangalore, as well as along major highways.
Maharashtra targets 10% share of EVs in all new vehicle registrations by Dec 2025.
Karnataka has set a goal to electrify 100% of three and four-wheeler cargo vehicles by December 2030.
Market Size
A recent survey reveals strong interest among Indian consumers in New Energy Vehicles (NEVs), with 83% of respondents indicating their readiness to choose NEVs exclusively for future purchases by the end of this decade.
On a state-wide level, Goa leads the country in EV penetration, with 14.20% of all new vehicles sold this year being electric, followed by Tripura and Chandigarh. Delhi also stands out with a 10.72% penetration, reflecting the capital's push towards sustainable urban mobility.
India's electric vehicle market is anticipated to expand at a CAGR of 28.52% to attain US$ 18.319 billion by 2029 from US$ 5.22 billion in 2024.
According to Fortune Business Insights, the Indian EV market is forecasted to expand from US$ 3.21 billion in 2022 to US$ 113.99 billion by 2029, with a 66.52% CAGR.
The Indian EV battery market is projected to surge from US$ 16.77 billion in 2023 to a remarkable US$ 27.70 billion by 2028.
According to NITI Aayog and Rocky Mountain Institute (RMI), India's EV finance industry is likely to reach Rs. 3.7 lakh crore (US$ 50 billion) in 2030.
Investment
- In 2024, notable EV investment commitments include Tata Motors-JLR Rs. 9,000 crore (US$ 1.07 billion), VinFast up to Rs. 16,500 crore (US$ 2 billion), Royal Enfield Rs. 3,000 crore (US$ 358.1 million), and Stellantis Rs. 2,000 crore (US$ 238.7 million).
- India’s auto component industry will see Rs. 25,000-30,000 crore (US$ 2.89-3.46 billion) investment in FY26 for capacity expansion and EV parts, after Rs. 15,000-20,000 crore (US$ 1.73-2.31 billion) in FY25, says ICRA.is planning to assemble EV battery packs and install 100 charging stations for EVs.
- Tata Motors aims to achieve 30-40% of its sales from Electric Vehicles (EVs) by FY30 and plans to invest approximately Rs. 18,000 crore (US$ 2.16 billion) to create an ecosystem for its electric vehicle business. Over the next two years, the company has scheduled the launch of new models.
- Ather Energy has secured Rs. 600 crore (US$ 71 million) from the National Investment and Infrastructure Fund, increasing its valuation to US$ 1.3 billion. This investment positions Ather as India’s fourth unicorn of 2023.
- YULU has successful raised US$ 19.25 million (Rs. 160 crore) into its operations in February 2024. The capital was secured through additional share issuance to Yulu's current strategic backers, Magna and Bajaj Auto Ltd.
- In June 2024, BM Electric Vehicles Private Limited, a subsidiary of JBM Auto Limited, has signed an agreement with MUON India Private Limited, a Macquarie Group company. Macquarie Group has launched 'Vertelo,' an EV financing platform in India that will provide financing, fleet management, and charging infrastructure solutions.
- In April 2024, Uno Minda, an auto components manufacturer, announced on Wednesday that it has partnered with Suzhou Inovance Automotive Co. from China to produce electric vehicle components.
- In March 2024, Okaya EV, a prominent electric two-wheeler manufacturer, has launched "Ferrato," its premium electric vehicle brand, as part of its nationwide expansion strategy, they will prioritize high-end models.
- In March 2024, Ola Electric, poised for an IPO, has emerged as India's top patent publisher for 2022-23, with 205 patents in EV and related technologies, surpassing rivals.
- In March 2024, Ola Electric has announced to introduce a consumer-focused electric autorickshaw named Raahi.
- In March 2024, BYD India, a subsidiary of the world's leading New Energy Vehicles (NEV) manufacturer, announced its entry into the luxury electric sedan segment with the launch of the BYD SEAL. BYD India currently has two products in its portfolio - the BYD ATTO 3 and the All-New e6, both of which have been very well received by Indian consumers.
- In December 2023, Indian Oil Corporation (IOC) inaugurated its inaugural battery-swapping station in Kolkata for Electric Vehicles (EV). The oil marketing PSU collaborated with Sun Mobility, affirming its commitment to advancing sustainable electric mobility solutions.
- In November 2023, SAIC Motor and JSW Group announced a strategic joint venture to accelerate growth with focus on green mobility.
- In August 2023, Adani TotalEnergies E-Mobility Limited (ATEL) disclosed a collaboration with all-electric cab aggregator, Prakriti E-Mobility (Evera), to deploy EV charging infrastructure, starting with a 200-point super hub in Delhi.
- Battery Electric Vehicle production in India is set to nearly triple to 377,000 units in 2025 from 130,000 in 2024, driven by major launches from Maruti Suzuki, Hyundai, Mahindra & Mahindra, Tata Motors, and JSW MG Motor, capturing a 6.6% market share.
- In August 2023, Mahindra & Mahindra anticipates that its forthcoming plant in Chakan, Maharashtra, will reach a peak production capacity of 200,000 electric vehicles annually from 2027 to 2029. They project EVs to constitute 30% of total volumes by 2030.
- According to a UK-based breakdown and recovery service provider, Electric Vehicles (EVs) exhibit a 59% lower likelihood of breakdown compared to traditional internal combustion engine (ICE) vehicles. Start Rescue's Managing Director, Lee Puffett, emphasized the remarkable reliability of EVs, spanning from new to a decade old, on the road. With over a million EVs currently in operation in the UK, this data underscores the practical advantage of choosing an EV, reducing the risk of unexpected roadside issues.
- In February 2024, the Indian Army has proposed a gradual introduction of a select number of Electric Vehicles (EVs) at 'Peace Stations' nationwide. This initiative aims to embrace technological advancements, promote green energy, and diminish reliance on fossil fuels.
- India’s mobility industry is set to exceed Rs. 51,92,400 crore (US$ 600 billion) by 2030, driven by EV adoption, with two-wheeler EVs reaching 35-40% and four-wheeler EVs hitting 15-17%.
- In October 2023, Mr. R. K. Singh, Union Minister for Power and New & Renewable Energy, unveiled the new EV-Ready India Dashboard (evreadyindia.org) in New Delhi, facilitating access to pertinent information.
- Ministry of Electronics & Information Technology (MeitY), Mr. S Krishnan attended the unveiling of a domestically developed 2KW DC Portable Charger at IIT Madras Research Park in October 2023. This initiative aims to accelerate electric vehicle adoption.
- In January 2024, VinFast and Tamil Nadu Govt. signed a MoU to invest US$ 2 billion for an EV project in Thoothukudi, with US$ 500 million committed for the first phase, targeting 150,000 units annually.
Government Initiatives
The Government has reaffirmed its commitment towards EVs and its mission for 30% electric mobility by 2030. Budget announced customs duty exemption on the import of capital goods and machinery required for the manufacture of lithium-ion batteries that typically power EVs.
FAME II for EV Scheme was Commenced on 1st April 2019 with a total budgetary support of US$ 1.43 billion (Rs. 10,000 crore), 30% procurement of manufactured or processed products must be from SMEs. This phase primarily targets the electrification of public and shared transportation. A subsidy of Rs. 5,790 crore (US$ 693 million) has been granted to electric vehicle manufacturers for the sale of 1,341,459 electric vehicles under phase II of the FAME India Scheme. It aims to provide demand incentives for 7,090 e-buses, 5 lakh e-3 Wheelers, 55,000 e-4 Wheeler Passenger Cars, and 10 lakh e-2 Wheelers. Additionally, the scheme supports the development of charging infrastructure. As of December 2023, electric vehicle manufacturers received a subsidy of US$ 637 million (Rs. 5294.00 crore) for selling 11,79,669 electric vehicles under Phase-II of the FAME India Scheme.
The government has outlined a scheme to transition 800,000 diesel buses to environmentally friendly alternatives, possibly supplanting FAME III.
The strategy involves substituting 800,000 diesel buses, comprising over a third of all vehicles on roads, with electric ones within seven years. This endeavour seeks to diminish vehicular emissions and stimulate investments in the national Electric Vehicle (EV) infrastructure.
Electric Mobility Promotion scheme with a US$ 60.18 million (Rs. 500 crore) budget will be operational from April 1 to July 31, 2024, aiming for effective implementation within this period, to enhance green mobility and stimulate electric vehicle manufacturing in the country, further measures will be taken to promote this sector. It will be applicable on electric two-wheeler (e-2W) and three-wheeler (e-3W). The Scheme supports 3,72,215 EVs, comprising 3,33,387 e-2Ws, and 38,828 e-3Ws (including 13,590 rickshaws & e-carts and 25,238 e-3Ws in L5 category), offering incentives exclusively for advanced battery-equipped vehicles.
The Ministry of Heavy Industries launched the PM E-DRIVE Scheme with Rs. 10,900 crore (US$ 1.28 billion) to boost India's EV ecosystem, promoting electric mobility and reducing fossil fuel reliance.
References: International Organization of Motor Vehicle Manufacturers, Media Reports, Press Releases, Department for Promotion of Industry, and Internal Trade (DPIIT), Automotive Component Manufacturers Association of India (ACMA), Society of Indian Automobile Manufacturers (SIAM), Union Budget 2023-24, EY Parthenon Electrifying Indian Mobility.
Note: Conversion rate used in January 2025, Rs. 1 = US$ 0.012, * - Includes Electric vehicles and auto mobiles, E - Estimated
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