EV Manufacturers Line Up Their Products As Sustainability Concern Adds To Market Appetite

At the same meeting, South Korea’s Hyundai and India’s Ola were other major automobile manufacturers that pledged to ramp up their EV game in the world’s third-largest car market. Elsewhere, at the Vibrant Gujarat Summit, Japanese carmaker Suzuki announced it will launch its first EV in India by the end of this year. It also plans to export the new model to Japan and European countries.

Not just the budget vehicle manufacturers, luxury carmakers too appear to be testing the waters in the battery-powered vehicle segment. Recently, Audi India head Balbir Singh Dhillon said the German carmaker is planning to expand its presence here.

Audi expects 50 per cent of its sales in India to come from EVs in the next 7 years, by which time EV penetration is likely to reach 30 per cent for private cars.

“We are still not representing the whole of the segment, we are just selling cars above Rs 1.2 crore… To reach 50 per cent from the current situation we will need more models," the Press Trust of India quoted Dhillon as saying. The new models would be more affordable than the current EV offerings in the country, he said.

While India has been lagging behind its regional rival China in the EV sector, these investments suggest increasing confidence of global carmakers in India’s evolving EV ecosystem. By a stretch, it may also suggest that these automobile giants see a decent potential in the country’s efforts to shift to electric mobility.

At present, Tata Motors is the top-selling EV brand in the country, followed by Chinese-owned MG Motor and the homegrown Mahindra and Mahindra.

There have been discussions about Tesla’s entry into India, although no confirmation has been made by the American giant, which has a significant presence in China. It reportedly wants India to lower import duties on cars, but the government wants it to set up a manufacturing plant in the country.

Tesla is said to have told the government it could bring the fast-charging small batteries technology to reduce the cost of its proposed affordable car for the price-sensitive Indian market. Tesla’s entry is likely to boost competition among the existing EV players and push them to innovate to cut down the high upfront cost of their EV models.

The high upfront cost of EVs has been a big spoiler for those considering to buy an EV or those planning to dump their current vehicles that run on dirty fuels. Besides the lack of adequate charging infrastructure is also a serious dampener.

Industry experts are hopeful that as the electric vehicle market grows, these bottlenecks will be streamlined. The government is already working on an ambitious plan to build 6,000 km of EV-ready highways on the Golden Quadrilateral over the next 7 years in an effort to electrify intercity public transport, the Economic Times recently reported.

“EVs have a slow and steady growth. The PLI scheme by the government has helped a lot as well. Going forward EVs have a good outlook. Indigenous manufacturing is increasing. Affordability is also increasing as battery prices have come down," said Vinod Aggarwal, President, Society of Indian Automobile Manufacturers (SIAM).

But is there really an appetite in the market for EVs?

Market Appetite

While India is one of the fastest-growing EV markets in the world, more than 90 per cent of its over 3.3 million electric vehicles are cheaper and more popular motorbikes, scooters, and 3-wheel rickshaws.

However, consumers now appear to be showing a greater preference for 4-wheeler EVs. This shift is largely driven by an overall concern for sustainability.

According to a Mckinsey & Company report, a vast majority of people are eyeing EVs for their next car purchase, “with a clear preference for full battery electric vehicles (49 percent) over plug-in hybrid electric vehicles (21 percent)”.

The report underlines the low availability of charging infrastructure in India. More than 75 per cent of all consumers surveyed by the consultancy and research firm feel that India is not yet well set up in terms of charge points.

“There is definitely an appetite in the market. As the range (of EVs) grows, people will move towards adoption. Indeed, it is gaining slowly. However, as more EVs come into the market with better range it (the appetite) will grow,” said Rajesh Menon, Director General, SIAM.

What Lies Ahead?

India has set an ambitious target of realising EV penetration of 30 per cent for private cars, 70 per cent for commercial vehicles, 40 per cent for buses, and 80 per cent for two-wheelers and three-wheelers by 2030. In absolute numbers, this roughly means 80 million EVs on Indian roads by the end of this decade.

The country also aims to achieve 100 per cent local production of EVs under the ‘Make in India’ initiative. The government has launched schemes to push the manufacturing and attract investments in this sector.

According to a Confederation of Indian Industry (CII) report, at least 13 lakh charging stations would be needed in India by 2030 to support EVs. It said about 106 million EVs will be sold every year by 2030 and to achieve a ratio of 1:40 charging infra to EVs, India will need to install more than 400,000 chargers annually with a total of 1.32 million chargers till 2030.

With a favourable policy framework and rising awareness among consumers, EVs in India could be headed for a fast-tracked journey.