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India Industry Forecast

India’s Passenger EV Market Will Hot up in Next 3-4 Years

In 2023, India’s passenger vehicle sales grew 10% YoY, but its electric vehicle (EV) sales nearly doubled to account for 2% of the overall PV sales.

This EV surge in EV sales can be can be attributed to factors like, government incentive schemes like PLIs, infrastructure development like more EV charging points, increasing urban consumer interest, and government push to meet green target.

Now with reports of Tesla’s entry in the Indian market, and its CEO Elon Musk India visit this month, experts say Indian EV market will see immense growth in next few years.

Currently Tata Motors held over two-thirds of the country’s EV market, but Mahindra & Mahindra and BYD are emerging players in the Indian market.

Recording a 2476% increase with just one model in its portfolio, Mahindra & Mahindra was the fastest-growing brand in 2023, followed by Build Your Dreams (BYD) and MG Motor.

Mahindra’s growth is attributed to the all-electric SUV XUV400 launched in 2023. BYD, with just two models in its India line-up, e6 MPV and Atto 3 SUV, grew over 1500% in 2023.

BYD’s recent launch of the Seal model will further enhance its presence and competitiveness in the Indian EV market.

A recent research report by Counterpoint research, says India’s EV sales in expected to increase by 66% in 2024, and EVs market share in passenger vehicle segment will double to 4% from 2% in 2023. The report also says by 2030, EVs are expected to constitute nearly one third of India’s total PV sales.

Maruti Suzuki’s too will enter the EV market with eVX in 2025. The Evx will be an SUV with a 60kWh battery pack and a range of up to 550 km.

The vehicle will be designed and developed by Suzuki Motor Corporation Japan and will be made Maruti Suzuki’s plant in India.

Tesla and Maruti Suzuki’s entry into the Indian market, is expected to shake up Tata’s and Mahindra’s dominance in the domestic market.

Vietnam’s auto major, VinFast has also announced to build a factory in India’s Tamil Nadu with an investment of Rs 4000 crore.

All this will not only increase competition but also evolve the landscape of India’s automotive sector towards a sustainable and eco-friendly technology.

Government policy incentives have attracted many players like Reliance New Energy, Ola, ACC Energy Storage to start EV battery manufacturing in India.

Last week Exide has tied up with auto majors Kia and Hyundai to supply EV batteries for their vehicles. Domestic manufacturing of EV batteries will bring down electric vehicles cost and boost sales.

Government’s PLI scheme for Advanced Chemistry Cells (ACC) and the recent policy change and reduction in import duties on EVs over to 15% are game changers.

This has not only attracted Tesla but also signal’s that India is ready to welcome investments and also build a new ecosystem for EVs and their component suppliers.

The government initiatives are giving a clear sign that India is taking all required steps to become a major player in the global EV market.

An S&P global research says EVs will consume three times less energy than they use when compared to their ICE counterparts by 2050. Experts say next few years will be critical for India’s energy space and increased use of EVs will be key to unlock end-use efficiency in India’s road transport.