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India Electric Vehicle Market Size, Share, Growth & COVID-19 Impact Analysis, By Type (BEV, PHEV, and HEV), By Vehicle Type (Passenger Cars and Commercial Vehicles), By Vehicle Category (Electric Four Wheelers (E4W) and Electric Two Wheelers (E2W)), and Country Forecast, 2022-2029

Region : Global | Format: PDF | Report ID: FBI106623

 

KEY MARKET INSIGHTS

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The India electric vehicle market size was valued at USD 681.51 million in 2021. The market is projected to grow from USD 1,415.65 million in 2022 to USD 47,292.45 million by 2029, exhibiting a CAGR of 65.1% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with experiencing higher-than-anticipated demand across the country compared to pre-pandemic levels. Based on our analysis, this market exhibited a higher growth of 35.66% in 2020 as compared to 2019.


Significantly increased vehicular emission in major cities such as Delhi, Mumbai, Bangalore, and Hyderabad and growing awareness about the adverse effect of this vehicular pollution on the environment and human health are driving the market growth. In addition, gradually rising gasoline fuel prices are also among the key factors driving the market growth. In addition, the rising number of initiatives for the adoption of electric vehicles (EVs) and increasing investments undertaken by the government for the development of charging infrastructure across the country further fuel the market expansion. For instance, the Government of India launched the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME) II scheme to provide purchase incentives for electric vehicles. Further, in November 2021, the government announced to provide USD 66.63 million to develop and purchase 2,877 charging stations and 6,315 electrical buses in 68 cities across India.


Moreover, the expansion of leading domestic and international players in the country and the emergence of local startups in the market is also influencing the India electric vehicle market growth. However, factors such as insufficient charging infrastructure in the country, high initial purchase cost, limited range of vehicles, and lack of skilled labor and serviceability are expected to hinder the market growth in the country.


Moreover, the introduction of various technologically advanced vehicles and proactive government initiatives for domestic development and production of vehicle components such as batteries to lower the overall cost of vehicles are providing lucrative opportunities for market expansion in the coming years. For instance, in May 2021, the government introduced the “Production-Linked Incentive Scheme (PLI) for ACC Battery Storage Manufacturing” to support the domestic production of batteries to reduce reliance on imports.


COVID-19 IMPACT


Growing Demand for EVs During COVID-19 Period Positively Influence Market Growth


In the initial months of 2020, to minimize the rapid spread of coronavirus, the Government of India imposed a complete lockdown across the country. Thus, the factors such as the disruption in the supply chain, complete shutdown of manufacturing plants, and closure of international borders have impacted the overall production and sales of vehicles in-country during the first and second quarters of 2020. In addition, geopolitical tensions further crippled the battery supply as the government clamped down on shipments from China (the largest source of lithium-ion cells).


The conditions improved after the second quarter of 2020, as the government reduced the lockdown restriction. The market is witnessing a steady recovery boosted by central government initiatives and particularly heavy subsidies and incentives at the state level. For instance, in 2021, e-4W sales increased by 206.3% to 14,218 units in 2021. Furthermore, electric bus sales were relatively neutral, and FAME II-backed e-bus deployment will support the strong growth of this segment. Before the pandemic, many municipal city authorities in India were already strengthening and developing electric mobility strategies with key policy measures including fiscal incentives and stricter vehicle CO2 emission standards. Additional Covid-19-related stimulus measures from mid-2020 further improved EV sales. For instance, In India, around 4,642 electric four-wheelers (e-4W) were sold in 2020. Due to COVID-19 induced lockdowns and reduced manufacturing output despite the anticipated FAME II transition impact.


LATEST TRENDS


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Deployment of Public Charging, Infrastructure, and Development of Smart Charging Models is a Key Trend Driving Market Growth


Battery swapping is one of the key trends in this market. In battery-swapping, a discharged battery or battery pack can be immediately swapped for a fully charged one. The popularity of battery swapping in India is continuously surging to mitigate the cost of ownership and range anxiety faced with this vehicle. Battery swapping can be possible within 5-15 minutes compared to up to eight hours required for charging a battery, which reduces the time for energy replenishment in electric vehicles. Thus, such an advantage increases the widespread adoption of battery swapping stations, primarily in two and three-wheelers. For instance, India Oil Corporation Limited (IOC) has installed battery-swapping facilities in 11 outlets. Furthermore, in February 2020, considering space-related issues in metropolitan areas for establishing large-scale charging stations and minimizing the longer charging time, the Government of India introduced the new battery swapping policy across the country. Thus, such initiatives by government authorities further fuel the trend.


Furthermore, leading manufacturers and power companies in India are significantly focusing on developing and installing high-capacity faster-charging solutions across the country. Moreover, the government authorities and private players focus on deploying Radio Frequency Identification (RFID), Near Field Communication (NFC), and kiosk-based self-operated charging stations within highways.


Thus, battery swapping, development and installation of high-capacity faster-charging solutions, deployment of Radio Frequency Identification (RFID), Near Field Communication (NFC), and kiosk-based self-operated charging stations are among the key trends shaping the infrastructure in India.


DRIVING FACTORS


Increasing Adoption of BEV Across Country to Drive Market Growth


The penetration of BEVs in India has increased significantly in the last five years as they are more efficient and eco-friendlier. In addition, growing fuel prices are further helping to boost substantial growth in the product adoption, mainly due to their extended range & efficiency. Moreover, the significant rise in costs of petrol & diesel and increasing governmental regulations pertaining to carbon dioxide emissions are also increasing the product adoption in India. For instance, according to the Ministry of Road Transport and Highways, around 0.52 million EVs had been registered in the country till July 2021. Also, India witnessed a 234% year-on-year growth in electric car sales during the first half of the financial year 2021-2022.


Moreover, government authorities in the country have introduced various schemes and initiatives in terms of road tax, registration charges, reduced tariff charges for the manufacture and subsidies for the purchase of battery-operated vehicles to encourage sales of EVs in the country. For instance, the State Government in Maharashtra provides the incentive of around USD 65 per kWh of battery capacity and exceptions from road tax and registration charges. However, the range of battery vehicles per single charge is limited and requires to be charged after a certain range. As a result, the demand for charging infrastructure is anticipated to increase significantly, thereby fueling the market growth.


Rising Number of Initiatives and Investments Undertaken by Government Fostering Market Growth


The Government of India is introducing a number of initiatives and increasing investments through subsidies, tax benefits, and preferential policies for the development of charging infrastructure across the country. This factor is primarily due to India's increasing popularity of zero-emission vehicles. For instance, the Government of India has revealed a target to electrify 30% of private cars, 70% of commercial vehicles, 40% of buses, and 80% of two and three-wheeler sales by 2030. This goal requires the simultaneous deployment of charging stations across India. In addition, the Government of India also supports the adoption of the product by providing schemes such as FAME1 and FAME2, with the main focus on the development of zero-emission vehicles and the deployment of public charging infrastructure in the country. Also, under the FAME II scheme, the government allocated around USD 130 million to establish charging infrastructure across the country from 2019 to 2022. Moreover, Niti Aayog approved the National Mission on Transformative Mobility and Battery Storage program, which is aimed to establish a five-year (till 2024) ‘Phased Manufacturing Program (PMP)’ to support the establishment of a large-scale, export-competitive incorporated battery and battery cell manufacturing facility in India, as well as localization of manufacturing across the entire value chain. Such initiatives and investments are undertaken by the government, driving the market expansion in the country.


Active Interest of Local Companies in Development of Overall Charging Infrastructure in India Propelling Market Expansion


Key market players operating in the country have been quite optimistic and showing an active interest in the development of overall infrastructure through the development of chargers, deployment of charging stations, and other related services across the country. For instance, in November 2021, India's leading oil manufacturing company, India Oil Corporation Limited (IOC), announced the installation of 10,000 charging stations across the country by 2024. Similarly, in September 2021, the charging infrastructure company Evre and parking solutions brand Park+ entered into a partnership to deploy 10,000 charging stations within two years. Likewise, other major players operating in India, such as Hindustan Petroleum Corporation (HPCL), Energy Efficiency Services Limited (EESL), Rajasthan Electronics & Instruments Limited (REIL), Volttic, Tata Power, among others, also announced their plans to deploy charging stations and related infrastructure across the country in the near future. Additionally, several mandates were made by the government for the improvement and implementation of stronger infrastructure across India. For instance, in January 2019, the Housing and Urban Development Ministry of India mandated commercial and residential complexes to allow 20% of their parking space for accommodating charging facilities. Also, as of November 2020, the government announced to install at least one charging kiosk at around 69,000 petrol pumps across the country. Thus, the above factor boosts the demand for this vehicle in India.


RESTRAINING FACTORS


High Cost of EVs and Dependence on Imported Batteries to Hamper Market Growth


Cost is a major barrier to switching to EVs. EVs have been unable to achieve cost parity with conventional vehicles, despite the considerable reduction in the price of batteries over the last few years. Moreover, the unavailability of raw materials for battery manufacturing in India leads to a constant risk of price change and battery availability due to geopolitical conditions. This factor, in turn, is causing a sense of uncertainty among consumers in estimating the long-term operating cost of this vehicle, which is the key advantage for its adoption.


Lack of Public Charging Infrastructure to Hinder Market Growth


The charging infrastructure is the most important factor throughout the electric mobility ecosystem. Thus, the limited availability of public charging stations coupled with the long charging times is one of the key barriers to adopting EVs in India. In addition, the issue of the increased peak load of service areas will require more investment in network up-gradation and purchase of electricity which will not be beneficial for DISCOM in the long term. Thus, the distribution network and frequent overloading of system components is another challenge for developing the market in India.


Lack of Related Standardization Across the Country Restraining Market Growth


There is a lack of government-approved standards for electric cars usage in India. Since public charging stations’ charging rates are not fixed and vary by state or area. Likewise, vehicle fleet operators such as the state-owned intra-city bus services require different charging infrastructures. Also, different states across the country have different tariffs for charging, as many states declared a separate tariff category for such vehicles. Therefore, such factors also hamper the expansion of the India electric market vehicle.


In addition, lack of connector type standardization across the country is also a key factor challenging the growth of the market in India as different vehicles have different charging plugs


SEGMENTATION


By Type Analysis


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Growing Adoption of BEVs to Drive Segment Growth


Based on type, the market is segmented into BEV, PHEV, and HEV.


The BEV segment held the largest market share in 2021 and is expected to continue its dominance during the forecast period. Factors such as increased government regulations, support and initiatives for the adoption of zero-emission vehicles as well as related charging infrastructure, the introduction of various BEV models by the leading players operating in India and continuous development in battery technology to lower the overall cost of vehicles and increase the driving range are propelling the segmental growth.


The HEV segment holds the second-largest market shared in terms of revenue. The growing demand for fuel-efficient low emission vehicles is expected to boost HEVs adoption in India. The PHEV segment is expected to witness the second-highest CAGR during the forecast period. Various leading players operating in the market are focusing on developing and introducing plug-in HEVs to extend the driving range. In addition, the rapid development of grid infrastructure, increasing focus on fuel-cell technology and rising spending power of consumers in India are expected to provide lucrative opportunities for segmental growth in upcoming years


By Vehicle Type Analysis


Increasing Demand for Efficient and Fast Charging Solutions to Drive Segment Growth


Based on vehicle type, the market is divided into passenger cars and commercial vehicles.


The passenger cars segment led the market share in 2021 and is likely to dominate the market by 2028 in terms of revenue. Increasing adoption of electric cars due to the significant hike in fuel prices, ease of maintenance, and rising awareness about the environmental impact of gasoline-powered vehicles are driving the adoption of passenger cars. In addition, various government exceptions in terms of subsidies and tax rebates are also fostering segmental growth.


This factor is due to the urban population's significant growth and commute requirement. Moreover, factors such as increasing fuel prices, rising environmental concerns, and the low operating cost of electric cars are increasing the adoption of electric cars.


The commercial vehicle segment is expected to increase during the forecast period. This factor is owing to the factors such as increasing improvements in battery technology to boost commercial vehicle driving range with higher load capacity. In addition, increasing the stringent rules of government on the use of diesel-powered commercial vehicles and the rapidly growing logistics industry in India is further expected to fuel the segmental growth.


By Vehicle Category Analysis


Increasing Demand for Efficient and Fast Charging Solutions to Drive Segment Growth


Based on vehicle category, the market is divided into Electric Four Wheelers (E4W) and Electric Two-Wheelers (E2W).


The electric two-wheelers (E2W) segment led the market share in 2021 and is likely to dominate the market by 2028 in terms of revenue. The rising price of petroleum fuels is one of the primary factors encouraging the demand for electric two-wheelers in India. For instance, according to a report by the Society of Manufacturers of Electric Vehicles (SMEV), the sales of electric two-wheelers in India increased by 132% in 2021.


The electric four-wheelers (E4W) segment is expected to register the fastest growth rate during the forecast period. Factors such as increasing demand for zero-emission vehicles, rising government subsidies to buy electric 4-wheelers along with continuously improving public charging infrastructure across the country are influencing the demand for electric four-wheelers in India. For instance, the sales of electric four-wheeler vehicles in India is increased from 4,642 units in 2020 to 14,218 units in 2021, registering the 206.3% year-on-year growth.


KEY INDUSTRY PLAYERS


Focus on Early Development of Battery Technology to Drive Competition


The market is moderately consolidated, with the presence of various major and startup players across the country along with low cost and readily available manpower. Various startups are looking to expand their participation in the market by raising funds from investors and entering new & uncharted markets. Whereas, existing players invest heavily in R&D and introduce advanced models to establish their presence in the market. However, market players are developing innovative models to gain a competitive edge over other competitors.


Tata Motors is a Leading Player in India 


Tata Motors is one of the leading global automotive manufacturers based in India. The company offers an extensive range of automobiles, including cars, SUVs, buses, trucks, and defense vehicles. The company is one of India’s largest automotive OEMs, offering an extensive range of integrated, smart, and electric mobility solutions for the global market. In December 2021, Tata Motors recorded its highest electric vehicle sales for the month. The company sold 2,255 electric vehicles in December 2021. In November 2021, Tata Motors partnered with the Bank of India to offer attractive financial schemes for its passenger cars. The company signed a retail finance MoU with the Bank of India. As a part of the tie-up, the Bank of India will offer loans to Tata Motors’ customers at an attractive rate, starting from as low as 6.85%. The scheme will provide a maximum of 90% financing on the total cost of the vehicle.


LIST OF KEY COMPANIES PROFILED:



KEY INDUSTRY DEVELOPMENTS:



  • September 2021: Tata Motors announced the commercial launch of the XPRES-T EV Electric Sedan In September 2021, Tata Motors announced the commercial launch of the XPRES-T EV Electric Sedan range for fleet customers with FAME subsidy pricing. It is the company’s first electric sedan under the XPRES brand.

  • December 2021: BMW India confirmed the launch of three new all-EVs in India In December 2021, BMW India confirmed the launch of three new all-EVs in India in the coming months. The company announced to launch the technology flagship all-electric SUV iX followed by the all-electric MINI luxury hatchback and all-electric sedan BMW i4. With the assistance of EV launches, the company intends to accelerate its electric mobility journey in India.


REPORT COVERAGE


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The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading product categories. Besides this, the report offers insights into the India electric vehicle market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the market's growth in recent years.


Report Scope & Segmentation














































  ATTRIBUTE



  DETAILS



Study Period



2018-2029



Base Year



2021



Estimated Year



2022



Forecast Period



2022-2029



Historical Period



2018-2020



Unit



Value (USD Million)



By Type




  • BEV

  • PHEV

  • HEV    



By Vehicle Type




  • Passenger Cars

  • Commercial Vehicles 



By Vehicle Category




  • Electric Four Wheelers (E4W)

  • Electric Two Wheelers (E2W)



Frequently Asked Questions

Fortune Business Insights says that the market was valued at USD 681.51 million in 2021 and is projected to reach USD 47,292.45 million in 2029.

The market is expected to register a CAGR 65.1% during the forecast period 2022-2029.

Increasing adoption of BEV across the country and rising number of initiatives and investments undertaken by the government to drive the market growth.

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India Electric Vehicle Market Size, Share and Global Industry Trend Forecast till 2026
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