India Electric Car Market to Witness 376,000 Unit Sales by 2030
- Published: January 2023
The Indian electric car market revenue is expected to witness 376,000 unit sales in 2030, recording a compound annual growth rate of 33.3% during 2022–2030. This growth is supported by the rapidly elevating year-on-year adoption rate of EVs and the rising count of government initiatives to fuel their usage. Moreover, the augmenting demand for high-performance, energy-efficient, and low-carbon-emission vehicles, rising fuel costs, stringent laws and regulations on vehicle emissions, and lowering battery costs bolster the market progress.
With the country targeting to have more than 30% of the new vehicle sales be electric by 2030, the transition to electric mobility forms a crucial part of its strategy to decarbonize the transportation sector. In India, EV companies have received an enormous boost from the government with the introduction of the FAME I and II schemes, the development of EV charging infrastructure, and reduction of the Goods and Services Tax (GST) on EV purchase, which, in turn, is motivating them to launch new vehicles and expand their manufacturing capacity.
Alongside the old ICE vehicle scrappage policy, Make in India initiative, and Production-Linked Incentives (PLI), these schemes lay the groundwork for extensive EV manufacturing and adoption in the country. A significant proportion of the car purchases are influenced by online websites, and Justdial is catering to the proliferating demand by helping and enabling buyers to reach out to dealers.
The surge in the demand for electric cars across India’s tier-II towns and cities is higher than tier-I cities. A major proportion of this demand is for Tata Nexon, followed by Tata Tigor, MG ZS, and Hyundai Kona. Among the tier-II cities, those in South India register a high demand, with Ernakulam ranking first, followed by Kozhikode and Madurai.
BEV Demand To Grow Fastest during Forecast Period
Among the different technologies, the BEV category recorded the largest share, of an estimated 88%, in 2022, and it is projected to exhibit the highest CAGR during the forecast period. The burgeoning petrol (gasoline) and diesel prices, concerns regarding vehicular emissions and their contribution to global warming, and growing government support contribute to the advance of the market in this category. The improvements in the battery technology and reduction in lithium-ion battery prices are also likely to boost the sales of BEVs.
Further, shared mobility providers are projected to register the highest growth rate during the forecast period. Shared mobility provides the convenience of conveyance at affordable costs to consumers. Emerging technologies, such as battery swapping, augment the user experience and open up a larger playground for shared e-mobility players to enhance their penetration. In addition to this, the deployment of cutting-edge charging infrastructure is encouraging the adoption of EVs in shared mobility fleets.
Geographically, Uttar Pradesh recorded the highest sales revenue in the Indian electric car market in 2022. The state is also expected to continue being the leading market in the country for electric cars in the coming years. It has implemented its own EV laws to provide support to national electric mobility regulations and promote futuristic sustainable mobility. Policies such as financial subsidies for and low loan interest rates on EV purchases and waivers of vehicle registration costs have a positive influence on the purchase of electric cars.
Key players in the market include Hyundai Motor Company, Mahindra & Mahindra Ltd., Volvo Car Corporation, Toyota Kirloskar Motor Pvt. Ltd., Tata Motors Limited, AB Volvo, and Honda Motor Co. Ltd.