India EV Market Outlook to 2030

India EV Market Overview

• The India EV market has experienced significant growth, reaching a valuation of USD 28.31 billion in 2023. This growth is fueled by strong government initiatives, increased adoption of electric vehicles, and a shift toward sustainability. The demand for electric two-wheelers and four-wheelers has risen sharply as consumers seek eco-friendly alternatives, further accelerating market expansion.

• Prominent players in the India EV market include Tata Motors, Mahindra Electric, Hero Electric, Ola Electric, and Ather Energy. These companies are leading the charge in the electric mobility revolution. Tata Motors dominates the four-wheeler segment with its popular Nexon EV, while Hero Electric and Ola Electric are at the forefront of the two-wheeler market, capitalizing on domestic production and competitive pricing to meet the growing demand for electric vehicles.
• In 2023, Tata Motors announced an investment of INR 15,000 crore aimed at ramping up its EV production over the next five years, with a goal to introduce 10 new electric vehicles by 2025. This strategic move is part of Tata's effort to strengthen its position in the growing Indian EV market. Tatas aggressive investment and focus on expanding its EV portfolio signal the companys intent to dominate the market further.
• Cities like New Delhi, Bengaluru, Mumbai, and Pune dominate the India EV market due to their advanced charging infrastructure, higher disposable incomes, and increasing awareness of sustainable mobility. New Delhi, in particular, has seen robust growth in EV adoption due to favorable government policies, subsidies, and strict emissions regulations. Bengaluru and Pune, with their burgeoning tech industries and progressive population, have also become EV hubs.

India EV Market Segmentation

The India EV Market is divided into the following segments:

By Vehicle Type: The India EV market is segmented by vehicle type into electric two-wheelers, electric four-wheelers, and electric buses. In 2023, electric two-wheelers held the dominant market share. This dominance is due to their affordability, growing availability of charging infrastructure, and ease of use in congested urban environments. Brands like Ola Electric and Hero Electric have expanded their reach across India, making electric two-wheelers increasingly accessible and popular among consumers.

By Powertrain Type: In 2023, Battery Electric Vehicles (BEVs) indeed held a dominant market share, significantly outpacing Hybrid Electric Vehicles (HEVs). This trend is largely attributed to the Indian government's strong support for fully electric solutions and substantial investments in charging infrastructure. Major players in the market, such as Tata Motors and Mahindra Electric, have prioritized BEV technology to meet the growing consumer demand for zero-emission vehicles, thus reinforcing BEVs as the preferred option in the Indian EV market.

By Region: The India EV market is regionally segmented into North, South, East, and West. The North region, including Delhi and Punjab, is indeed a significant player in the Indian EV market. It has been noted for having a strong EV policy framework, generous subsidies, and an extensive charging network, which contribute to its market share. Delhi, in particular, has been proactive in adopting EVs, supported by ambitious targets and favorable policies aimed at promoting electric mobility.

India EV Market Competitive Landscape

• Tata Motors Recent Development (2023): Tata Motors announced a strategic partnership with Tata Power in 2023 to install over 25,000 EV charging stations across India by 2025. The companys focus on developing the necessary infrastructure to support EV adoption has made it a leading player in the EV market.
• Mahindra Electric Recent Development (2023): In 2023, Mahindra Group has indeed partnered with Jio-bp, a joint venture between Reliance Industries and BP Plc, to explore electric vehicle (EV) product manufacturing and services. This collaboration aims to enhance electric mobility in India by developing high-performance and swappable batteries, which could help address range anxiety among consumers. The partnership also includes evaluating EV charging solutions for Mahindra's electric vehicles, including three-wheelers and small commercial vehicles.

India EV Market Analysis

India EV Market Growth Drivers

• FAME-II Scheme Driving Adoption of EVs: The Indian governments Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) scheme, introduced in 2019, has been a key driver in the widespread adoption of EVs. In 2023, over 2.8 lakh electric vehicles have benefitted from subsidies under this scheme. The scheme offers incentives for electric two-wheelers, three-wheelers, and four-wheelers, with a significant portion of the INR 10,000 crore outlay aimed at reducing vehicle costs.
• Expansion of EV Charging Infrastructure: The growth of Indias EV market is significantly driven by the rapid expansion of EV charging stations across major cities. As of mid-2024, the Ministry of Power reported that over 15,000 public charging stations have been established nationwide, up from around 6,000 in 2022. The Indian governments push towards green mobility includes creating a robust infrastructure network, ensuring that every 3 km in urban areas and 25 km on highways have an EV charging point, thus addressing range anxiety and promoting higher EV sales.
• Battery Cost Reduction Through PLI Scheme: The Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) batteries has incentivized local battery manufacturing, reducing dependence on imports and lowering battery costs, which are a significant component of an EVs total cost. By 2024, domestic battery production had ramped up, driven by government funding of INR 18,100 crore under this initiative. Lower battery costs have directly led to a reduction in EV prices, making electric vehicles more accessible to a wider audience, particularly in tier-2 and tier-3 cities.

India EV Market Challenges

• Inadequate Battery Recycling Infrastructure: As of 2023, India's recycling capabilities for electric vehicle (EV) batteries remain underdeveloped, with only a small fraction of the growing number of batteries being recycled. The Ministry of Environment, Forest and Climate Change has highlighted this concern, especially given the anticipated increase in EVs, which is expected to exceed 10 million by 2025. This surge will lead to a significant rise in end-of-life batteries, exacerbating the risks associated with improper disposal and environmental harm.
• High Initial Costs for Commercial EVs: Commercial electric vehicles, particularly electric buses and trucks, face high upfront costs, which deter fleet operators from transitioning from traditional ICE vehicles. Despite government subsidies, the high capital investment required for commercial EVs slows their adoption, especially in regions with lower economic activity and fewer public transport investments.

India EV Market Government Initiatives

• Extension of FAME-II Till 2024: The FAME-II scheme, which was initially set to end on March 31, 2024, has been extended only until July 31, 2024, providing an additional four months of support. This extension includes an extra allocation of 500 crore aimed at incentivizing electric two-wheelers and three-wheelers. As of 2023, more than 3,000 electric buses had been deployed in state transport systems, reducing CO2 emissions by over 15,000 metric tonnes annually, according to the Ministry of Heavy Industries.
• Implementation of Green Hydrogen Mission: In 2023, Implementation of Green Hydrogen Mission: In 2023, the Indian government approved the National Green Hydrogen Mission with a budget of approximately INR 19,744 crore (around $2.4 billion) allocated from FY 2023-24. The mission aims to promote the production of green hydrogen, facilitating the decarbonization of the transport sector. Green hydrogen-powered commercial EVs could reduce dependency on imported fossil fuels and lower operating costs for fleet operators.

India EV Market Outlook

The India EV market is poised for rapid transformation by 2028, driven by the expansion of charging infrastructure, advancements in battery technology, and supportive government policies. As the market continues to evolve, new opportunities are expected to arise, particularly in the penetration of electric vehicles in smaller cities and the electrification of commercial fleets.

Future Trends

• Growth in EV Penetration in Tier-2 and Tier-3 Cities: By 2028, electric vehicle penetration is expected to rise significantly in tier-2 cities are emerging as significant growth centers for electric vehicles, especially electric two-wheelers. Reports indicate that in some tier-2 markets, electric two-wheeler sales have already surpassed those in metropolitan areas, highlighting a shift in consumer preference towards electric alternatives in these regions.
• Shift Towards EVs in Commercial Fleet Operations: By 2028, the commercial vehicle sector is projected to experience a substantial shift towards electric mobility, particularly in logistics and public transport. The government's mandate for state transportation units to adopt electric buses will drive this transition, reducing fuel consumption and emissions on a national scale.