India Electric Vehicle Market to Grow Due to Rising Carbon Emission Concerns

India electric vehicle market is expected to rise due to the growing adoption of electric vehicles in logistics and transportation, increasing sales of electric vehicles, and fascinating incentives being offered by the Indian government for the purchase and production of EVs.

According to the Markets and Data Research report, “India Electric Vehicle Market Assessment, By Region, Opportunities and Forecast, FY2017-FY2031F”, India Electric Vehicle Market was projected at USD 3.68 billion in FY2023 and is estimated to reach USD 22.95 billion by FY2031, rising at a CAGR of 25.07% in the forecast period. India electric market is expected to grow due to growing consumer awareness, the presence of local and international automakers, and favorable government policies. The government of India is implementing favorable programs and policies which foster the sale and purchase of electric vehicles, propelling the growth of India electric vehicles market. The success for EVs can be attributed to different factors, including government initiatives at both state and central levels, a strong industry aim and growing public acceptance of electric vehicles. Initiatives including the Production-Linked Incentive Scheme for auto component and auto sector, and the PLI scheme for manufacturing advanced chemistry cell batteries and Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME India), have played an important role in encouraging local production and increasing EV adoption. Also, Indian Government is considering transitioning all its vehicles to electric in the forecast period.  For instance, in March 2024, the central government introduced a long-awaited electric vehicle policy focused on establishing India as a key center for EV manufacturing. This policy mandates a minimum investment of nearly USD 500 million. By fostering the domestic production of EV technologies, this initiative supports the ‘Make in India’ campaign and focuses on lessening India’s dependency on crude oil imports.

In addition, rising prices of fossil fuels in India are another key driver for accelerating the demand for electric vehicles in India. Whereas the buying cost of fossil-fuel-driven automobiles is more cost-effective than electric vehicles, their operating cost is high because of increased diesel and gasoline prices. Contrarily, the operating cost of EVs is less than that of fossil fuel-driven automobiles. Hence, consumers’ preference is shifting towards adopting EVs due to growing fossil fuel prices, which is projected to accelerate the India electric vehicles market growth in the forecast period. Furthermore, technological innovations in charging infrastructure have significantly decreased the charging period, making ownership of electric vehicles more practical and easier for end-users across India which further led Indian companies to launch technologically advanced electric vehicles in the Indian market.

In the forecast period, the Government of India is expected to emphasize more on combating climate change through vigorous emission control regulations and the implementation of scrapping policies for traditional vehicles, which is projected to increase market growth in the coming years. Also, strategies of car manufacturers to transition their conventional vehicle fleets to fully electric models is focusing to seize early revenue opportunities in an emerging market of India, in turn, estimated to have a positive impact on electric vehicle market.

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Spread through 103 pages, the "India Electric Vehicle Market" report includes an in-depth TOC, over 20 market data figures, the latest market developments, key drivers and opportunities, and a thorough study of major company profiles. Moreover, the report offers strategic recommendations, pricing analysis, market share analysis, and value chain analysis in detail.

Key Takeaways: 

1 - Targets of automakers to convert their conventional vehicles into electric vehicles to generate high revenues, propels India electric vehicle market growth opportunities.

2 - Continuously reducing the cost of electric vehicle batteries and favorable government policies are estimated to accelerate India electric vehicles market growth in the forecast years.

3 - Advancements of technology in automotive and the establishment of EV charging platforms are increasing the demand for electric vehicles in India.

4 - Companies in India electric vehicle market are adopting strategies including joint ventures, collaboration, and others to hold the largest market share, increasing the Indian market share for electric vehicles in the forecast years.

India electric vehicle market is segmented in the following categories:

By Usage Type: Passenger Vehicle and Commercial Vehicle

By Vehicle Type: Two-wheeler, Three-wheeler, Passenger Car, Buses, and Others

By Region: North, South, East, and West and Central

Based on usage type, passenger vehicles dominate the market growth due to an increase in disposable income, a rise in the production of passenger cars, and significant technological innovations. In India, the automotive industry is expanding because there is a wide availability of electric passenger cars, and the government supports the production and purchase of passenger cars. In addition, the operating cost of electric passenger cars is comparatively lower than conventional passenger cars, accelerating the growth of this segment in India electric vehicle market.

Based on vehicle type, two-wheelers registered the largest market revenue share in 2023, because of growing consumer concerns about environmental impact, strict government regulations concerning carbon emissions, and an increase in demand for two-wheelers. In addition, the government is investing in EV infrastructure and a growing shift towards electric two-wheelers from conventional two-wheelers, propelling the growth for electric two-wheelers segment. Companies in India electric vehicles market are expanding their footprint by launching innovative and advanced electric two-wheelers which enable consumers to choose from a wide range of products based on their requirements.

Major companies operating in India Electric Vehicle Market include:

·         Tata Motor Limited

·         MG Motor India Private Limited

·         Hero Electric-Vehicles Private Limited

·         Okinawa Autotech Pvt. Ltd.

·         Ampere Vehicle Private Limited

·         Hyundai Motor India Limited

·         Ather Energy Private Limited

·         Ola Electric Technologies Pvt. Ltd.

·         Mahindra Electric Mobility Limited

·         Toyota Kirloskar Motor Private Limited

Companies in India electric vehicle market are actively involved in research and development (R&D) initiatives to promote innovation, improve current technologies, and create new solutions. Also, giant market players in the market are adopting growth strategies including merger and acquisition, joint ventures, new product launches, collaboration, and partnerships to expand their footprint, registering the largest market share and gain a competitive advantage. Furthermore, giant market players in the market are significantly involved in expanding their manufacturing capacity due to several causes such as taking benefits of government schemes, grabbing the highest market share in India, enhancing economies of scale to lower production costs, and growing adoption rate of electric vehicles by customers.

In August 2023, Hyundai Motor announced that it had signed an Asset Purchase Agreement for the acquisition and assignment of recognized assets connected to General Motors India (GMI)’s Talegaon Plant across Maharashtra. In addition, HMIL will review plans to launch additional EV models across the Indian market to accelerate goals of electrification, produced at its Sriperumbudur plant. During the same year, Hyundai Motor India marks a significant milestone by celebrating 27 years in the market. Presenting their commitment to India, HMIL signed a Memorandum of Understanding earlier this year to invest USD 24 million in Tamil Nadu to expand potential and set-up an electric vehicle ecosystem. As part of their dedication to ‘Atmanirbhar Bharat’, they plan to introduce an advanced manufacturing center for cars made in Indian in Talegaon, Maharashtra. Their manufacturing functions in Talegaon are set to start in 2025.

In India, many car manufacturers are now aiming on the electric vehicles market. Both well-known companies and new startups have joined the EV movement, launching different electric models in India. In addition to car manufacturers, sectors including power and oil are supporting this transition to cleaner transportation. Together, these sectors are making significant investments to expand EV charging infrastructure nationwide. Thousands of charging stations have already been set up, with plans to build many more. This presents the industry’s strong commitment to encouraging widespread EV adoption.

“India Electric Vehicle Market Assessment, FY2017-FY2031F”, evaluates the future growth potential of India electric vehicle market and provides statistics and information on market size, structure, and future market growth. The report intends to provide innovative market intelligence and help decision-makers to make investment decisions for their organizations more strategically. Moreover, the report identifies and examines the emerging trends along with key drivers, challenges, and opportunities in India electric vehicle market.

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