Growing
awareness about air pollution and government support toward adoption of
electric vehicles (EVs) is driving the market for electric cars in India.
Valued at $71.1 million in 2017 by P&S Intelligence, the Indian electric car market is
projected to grow by almost 10 times during the forecast period 2018–2025,
eventually generating a revenue of $707.4 million! And, it’s not just the total
revenue, which is expected to be high during the forecast period, but also its
CAGR (34.5%).
Electric
cars are essentially battery-operated cars that produce little or no emission.
Based on technology, the electric car
market in India has been segregated into plug-in hybrid electric vehicle
(PHEV), battery electric vehicle (BEV), and hybrid electric vehicle (HEV).
Among these, BEV led the market in 2017 with over 70% sales volume share.
Similarly, the categories of the domain when segmented by battery are
lithium-nickel-manganese cobalt oxide (Li-NMC), lithium-iron-phosphate (LFP),
and others, among which the LFP category led the market in 2017 with 65% sales
volume share.
Talking
of the market drivers, India is expected to adopt BS VI emission norms in 2020.
Aimed at reducing vehicular emissions even further, this move is predicted to
drive the electric car market in India
rapidly. To encourage EV adoption, the central and state governments are
actively formulating favorable policies. For instance, the Central Government
launched the FAME scheme in 2015, to bring down the price of electric cars
across the country.
Similarly,
in 2017, the NITI Aayog brought out a scheme for the construction of e-vehicle
charging points along the Indira Gandhi International Airport-South Delhi-Noida
corridor. Under this, 135 charging stations, including 89 slow
alternating-current (AC) stations and of 46 quick charging direct-current (DC)
stations are to be built at 55 locations. The governments of several states
have come out with policies and schemes of their own, all of which are expected
to aid in the growth of the Indian
electric car market.
For
instance, the Karnataka government offers 100% reimbursement on expenses
incurred to set up EV manufacturing plants on agricultural land. Similarly, the
Maharashtra government offers complete exemption of registration fee and road
tax on electric vehicles. Under this scheme, EV and electric battery
manufacturers also get 20% incentives. In another such initiative, the
Uttarakhand government will set up an EV research hub in the state and offer
every trainee a stipend.
All
these factors have radically changed the scenario of the electric car market in India in recent years. Earlier dominated by
Mahindra Electric Mobility Limited and Toyota Kirloskar Motor Pvt., the market
has seen the entry of several new players, including Tata Motors Limited, Honda
Motor Co. Ltd., and Hyundai Motor Company. All these manufacturers are
launching electric cars with improved range, as short range has been somewhat
discouraging people to buy electric cars. An example would be Mahindra Electric
Mobility Limited’s eKUV100, which can run up to 140 km on a single charge.
Thus,
we see that stricter emission norms and government incentives will lead to
increase in electric car sales, taking the domain forward.
