The electric mobility revolution is sweeping through the world and by delivering holistic benefits to societal stakeholders, Electric vehicles (EVs) are helping nations achieve prospects of sustainable mobility.
India, the 3rd largest automobile market globally, is witnessing a steady uptick in the demand for EVs. Buyers are waking up to the potential of EVs and with a constant surge in monthly sales, these zero-emission vehicles are catching up with their Internal Combustion Engine (ICE) counterparts. EVs are crucial for achieving sustainable mobility and to meet India’s commitment to be net-zero by 2070, they have to play a crucial role across segments and categories. To that end, the government of India has set ambitious targets of achieving 80% electric mobility in 2Ws and 3Ws, 70% in Commercial vehicles, 40% in buses, and 30% in passenger vehicles by the year 2030.
EV adoption is surging around the world and the same is true for the Indian market. However, this journey of EV mainstreaming on the global stage was full of challenges. From innovating quality EV products to upgrading battery tech and building charging infrastructure, the entire EV ecosystem has come a long way. Fortunately, all these efforts have started bearing fruits with EVs now picking the pace and garnering good sales around the world.
Regarding EV adoption in India, we are at the cusp of the electric mobility revolution. Especially since 2020, EV adoption in India has been progressing in a very positive way. From 1.73 lakh EVs sold in FY2020, the number of EVs that were retailed in FY2024 reached 1.67 million units. Compared to FY2023 which witnessed the dispatch of 1.14 million EVs, the sales in FY2024 represent a healthy growth of 41%.
While many factors contributed to rising EV sales in India, the instrumental role played by policymakers in conjunction with the heavy lifting done by the industry player couldn’t be overemphasised. While the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme enthused buyers with attractive purchase subsidies, the production-linked incentives (PLI) encourage manufacturers to produce EVs here in India. FAME II scheme which ended March 31 earlier this year outlaid Rs 10,000 crore and subsidies are now offered through the Electric Mobility Promotion Scheme 2024 with earmarking of Rs 500 crore for Electric 2-wheeler (E2W) and Electric 3-wheeler (E3W) categories. Further, the National Electric Mobility Mission Plan (NEMMP) is also playing an instrumental role in furthering the prospects of EVs in India.
The dynamics of EVs is also reflected in their sales across the automobile segments with E2W and E3W being at the forefront heralding the electric mobility revolution. Both E2W and E3W are championing the cause of affordability and by offering last-mile connectivity, these are sitting at the top of EV sales charts. In FY2024, E2W and E3W commanded 56% and 38% of the total 1.67 million units of EV sales respectively, making 94% of the total market share in India. Within the 3W category, E-rickshaws account for around 76% of the total sales while in terms of sales in the EVs category, this segment accounts for 40-50% of the total sales. The immense popularity of E-rickshaws is primarily due to their cost-effective nature and ability to offer last-mile connectivity. Consequently, the use of these E-rickshaws is proving immensely beneficial to the environment as they save tonnes of CO2 emissions into the atmosphere. The adoption in other categories is not as robust although the sales are expected to get better with advancements in battery technology, expansion of public charging infrastructure, and price parities making their way into larger EV ecosystem.
With more prospective buyers realising the cost-effective and environmentally friendly nature of EVs, the phenomenon of electric mobility is fast expanding beyond metropolitan cities into towns and villages in India. Although challenges related to high cost, battery tech, and charging infrastructure remain, the continuous evolution of technology, greater investment by OEMs, and enhanced localization levels will ensure that the EV revolution reaches the doorsteps of the masses sooner than expected.
