According to a survey published on Wednesday, the Indian market for electric vehicles (EVs) is predicted to expand at a compound annual growth rate (CAGR) of 35–40% until 2027.
The analysis by Niveshaay, which administers the Green Energy smallcase (a portfolio of companies, which will gain from the renewable energy sector development), estimated that EV sales volume in India might touch roughly 3-4 million units by 2025, and 10 million by 2030.
Currently, the majority of the Indian vehicle market—roughly 80%—is made up of two- and three-wheeler electric vehicles.
“The Indian government is attempting to stimulate domestic production and minimize import dependency. It has created Production Linked Incentive (PLI) schemes and lowered customs charges on essential minerals to support local manufacturing,” said Arvind Kothari, smallcase Manager and Founder of Niveshaay.
“The balanced approach to policy support and market development is facilitating India to emerge as a remarkable contender in the global EV landscape, despite challenges like limited charging infrastructure,” he added.
The new report further noted that EVs are likely to infiltrate the market with roughly 10-15 per cent of new vehicle sales in India (including two-wheelers, three-wheelers, and passenger vehicles), driven by government incentives, rising gasoline prices, and increased consumer awareness.
By the year 2030, annual EV sales are predicted to surpass 10 million units, with strong growth in the deployment of electric buses, commercial vehicles, and individual cars. EVs might represent 30-40 per cent of new vehicle sales in the market.
With more than two million public charging stations expected nationally, the study anticipates a strong EV Infrastructure, the report added.
The increase in EV Adoption, infrastructure, as well as manufacturing, can also be ascribed to increases in Budget allocations for the EV sector.
From Rs 10,000 crore given in FY2019-20 (FAME II program), it has grown to 19,744 crore (for Green Hydrogen mission) and 2,908 crore (continued FAME II Support) in FY2023-24.
Faster use and Manufacturing of Electric Vehicles (FAME) was created in 2015 to encourage the use of electric and hybrid vehicles by granting upfront incentives on purchase.
The Union Budget 2024-25 has allocated Rs 2,671.33 crore under the FAME plan, primarily to satisfy lingering liabilities from FAME II.
In addition, the government has created the Rs 500 crore Electric Mobility Promotion Scheme (EMPS) to increase electric two- and three-wheelers.
The enhanced PLI Scheme for automobiles and auto components to Rs 3,500 crore and the exemptions in customs duty on lithium, cobalt, and other rare minerals to cut battery production costs, via the Union Budget, making electric vehicles more affordable.
Driven by significant government initiatives like the FAME and the EMPS plan, India is positioned to become a prominent player in the global EV industry, specifically amongst the emerging economies.
While China dominated with 60 per cent of worldwide EV sales as of 2023, India’s massive population and urbanisation are fuelling demand for inexpensive electric mobility.
