Ottawa, Aug. 08, 2023 (GLOBE NEWSWIRE) -- The India electric vehicle market size was estimated at USD 4.15 billion in 2022. Electric vehicles produce lower or zero tailpipe emissions, reducing their environmental impact compared to traditional fossil-fuel-powered vehicles. They are seen as a cleaner and more sustainable alternative. Improvements in battery technology have led to increased driving ranges and reduced charging times for electric vehicles, making them more practical for everyday use. The Indian government had launched various initiatives and incentives to promote the adoption of electric vehicles. These measures included subsidies, tax incentives, and reduced goods and services tax (GST) rates on EVs. Growing public awareness of environmental issues and climate change has contributed to increased interest and acceptance of electric vehicles.
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Report Highlights:
- By propulsion, the battery electric vehicles segment holds the largest share of the market. Battery electric vehicles produce zero tailpipe emissions, making them an attractive choice for environmentally conscious consumers and governments aiming to reduce air pollution and combat climate change.
- By platform, the four-wheeler segment is expected to have a significant share of the market throughout the forecast period. Four-wheelers, particularly electric cars, have been more widely accepted and preferred by consumers for personal transportation. Consumers often associate four-wheelers with safety, comfort, and convenience, making them a popular choice for everyday use.
- By vehicle type, the passenger vehicle segment is observed to hold the dominating share of the market during the forecast period. The availability of a wide range of passenger vehicle models in the country by multiple nation-based automakers promotes the growth of the segment.
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Market dynamics:
Driver:
Rising emphasis on reducing air pollution
Many Indian cities suffer from severe air pollution, especially during peak traffic hours. The increasing number of vehicles on the road is a major contributor to this problem. Promoting electric vehicles helps to improve urban air quality, making cities healthier and more livable for their residents. The Indian government has implemented regulations and policies to tackle air pollution, including emission norms for vehicles. Encouraging the adoption of electric vehicles aligns with these policies, and government agencies often provide financial incentives like subsidies, tax benefits, and reduced registration fees to promote EV usage. As people become more environmentally conscious, there is a growing interest in electric vehicles as a cleaner and more sustainable transportation option. Thus, the rising emphasis on reducing air pollution acts as a driver for the India electric vehicle market.
Restraint:
Consumer affordability
Electric vehicles generally have higher upfront costs compared to traditional internal combustion engine vehicles. The cost of EV batteries, which is a major component of the vehicle's price, remains relatively high. This price difference can be a deterrent for price-sensitive consumers, especially in a price-sensitive market like India. Many consumers in India rely on financing options to purchase vehicles. However, the availability of attractive and accessible financing options for electric vehicles is limited, making it difficult for potential buyers to afford an EV without a substantial down payment. Thus, the consumer affordability factor creates a restraint for the market.
Opportunity:
Rising development of domestic battery manufacturing plants
India is currently focused on developing domestic battery production plants that will reduce dependence on foreign suppliers and enhance energy security. Domestic battery production plants enable economies of scale and mass production of batteries. As production volumes increase, the cost per unit decreases, making electric vehicles more price-competitive in the market. Local battery production facilities allow for customization and innovation to meet the specific needs of the Indian market. Tailoring battery technology to suit regional requirements can lead to better-performing and more efficient electric vehicles. All these factors collectively create an opportunity for the market.
Challenge:
Inadequate policy implementation
Inconsistent or poorly implemented policies create uncertainty for electric vehicle manufacturers and investors. They may hesitate to make long-term commitments and investments in the EV sector if they are unsure about the government's commitment to supporting the industry. When incentives and subsidies are not implemented effectively, they may not provide the desired boost to the EV market. Delays in disbursing incentives or limited accessibility can reduce the effectiveness of these measures in encouraging consumers to switch to electric vehicles. The success of EV policies also depends on consumer awareness and education. Inadequate efforts in promoting electric vehicles and their benefits can lead to limited public interest and slower adoption rates. Thus, the inadequate policy implementation is observed to create a challenge for the market.
Related Reports
- Hybrid Electric Vehicle Market - The global hybrid electric vehicle market size is expected to be worth around USD 310.94 billion by 2030 and growing at a CAGR of 20.86% from 2022 and 2030.
- Fuel Cell Electric Vehicle Market - The global fuel cell electric vehicle market size is predicted to be worth around USD 35.60 billion by 2030 and growing at a CAGR of 53.4% from 2022 to 2030.
- Off-highway Electric Vehicle Market - The global Off-highway Electric Vehicle market size is projected to be worth around USD 52.67 billion by 2032 with a CAGR of 14.6% from 2023 to 2032.
Recent developments in the India electric vehicle market:
- In June 2023, the Swedish Automaker, Volvo Cars stated its interest to launch all-electric car in India market later this year. The company announced to launch all-electric C40 in India and bookings for the same will start in August.
- In June 2023, Renault India announced to roll out for a significant milestone with a major investment of Rs.5,300 crore along with its partnership with Nissan Motors. The automaker plans to launch six new products in the electric vehicle market under this partnership, including two small electric cars.
- In June 2023, Honda Cars India announced to launch a battery-powered electric SUV car within three years in Indian market under its plan to launch five new SUVs in Indian market by 2030. The company believes that the India’s market for electric vehicles will help the company to elevate its sales in the fastest growing segment.
- In May 2023, Pluto, an electric scooter manufacturing start-up announced the launch of ePluto 7G with an ex-showroom price of Rs.94,999 in India. The company has offered the electric scooter in three colors, matte black, grey and white. The electric scooter aims to offer 100-150 kilometers range with a single charge.
Market Segmentation
By Propulsion Type
- Battery electric vehicle
- Hybrid electric vehicle
By Platform
- Two-wheeler
- Three-wheeler
- Four-wheeler
By Vehicle Type
- Passenger Vehicles
- Commercial Vehicles
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