It’s been quite some time since EVs have become the go-to vehicle in many households. While the penetration might be a minuscule percentage against internal combustion-engined vehicles, it certainly is progressing over the years.
In 2021, the worldwide sales of electric vehicles touched 6.75 million units worldwide. People are likely to move towards electric vehicles as they have created a profound impact on the end consumer. This will further be cemented by government subsidies, offerings by competitors, and a more advanced technology that shapes customer sentiment.
However, before we talk about what lies ahead, let’s look at a few numbers determining what’s in store for us currently. Here are the latest EV sales trends in India in 2022 and future predictions.
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EV Sales Trends in India 2022: What’s the Current Scenario?
Source: EV Reporter (https://evreporter.com/indias-electric-vehicle-sales-trend-october-2022/)
Starting off with October 2022, the country saw a dramatic 291% year-over-year increase in October. As per the Vahan dashboard, around 4,200 electric vehicles were registered in India in October 2022. Although, when it comes to the percentage of market share for EVs, the previous month saw the percentage dropping as the festive season led to higher car deliveries for ICE vehicles too.
What’s even more exciting is that EV sales crossed the 1 lakh mark in October this year. This could be owed to various reasons. While one of them could be the festive season and even the impact of the geopolitical situations around the world, which is leading to Indian customers ebbing away from fuel-based vehicles, albeit quite slowly.
According to industry experts, for any new industry to become a topic of discussion and reach an inflection point, 5% seems like a good number. That’s when it tends to gain the attention of the mass markets.
Moreover, the vehicle category spearheading this job is the EV two and three-wheelers, that account for 95%, collectively of the total 168% uptick in the 2021 sales numbers.
This gradual shift of ICE buyers to electric cars comes at a time when petrol and diesel prices are soaring, along with a marked rise in CNG price, which was recently hiked for the seventh time this year.
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EV Sales in India: Prediction & Future Outlook
The Indian EV market is touted to be the third largest in the world by 2030 in terms of volume.
In order for India to achieve and sustain its 2030 target of e-mobility, which includes 70 percent of all commercial cars, 30 percent of private cars, 40 percent of buses, and 80 percent of two-wheeler (2W) and three-wheeler (3W) sales to be electric by 2030. This roughly translates to a requirement of around 102 million vehicles.
The EV sales present an optimistic opportunity for investors, OEMs, and carmakers. According to a CEEW (COUNCIL ON ENERGY, ENVIRONMENT, AND WATER) study, the OEMs present an investment opportunity of USD 177 billion in vehicle production, around 2.9 billion worth of investment opportunity lies within the charging infrastructure deployment, USD 12.3 billion in battery manufacturing and a behemoth $206 billion opportunity from the end-customer.
Another report by the India Energy Solar Alliance states that the annual EV sales will cross 17 million units by the year 2030.
This growth is expected to be fueled (pun intended) by factors such as rising fuel prices, new players entering the EV markets, advancement of technology leading to lower prices, and continuing subsidies by the central and respective state governments.
The report further stated that the Indian EV market would grow at a CAGR of 49 percent between 2021 and 2030, with a prediction to reach annual sales of 17 million (15 million projected to be electric 2Ws).
Challenges The EV Sector Needs To Face
However, as with every other initiative, the electric vehicle market might have to face some pre-existing challenges. Here are some of them.
Challenges for EV parts manufacturers: There can be no second thought about the fact, that to keep EV sales in the country on a growth trajectory, the OEMs for EVs should be ready to overcome any hurdles. One of the challenges for battery manufacturers, especially, would be the lack of raw materials within the country. Since India suffers from a lack of raw materials available for manufacturing auto components for electric vehicles, there’s a high probability that it might have to import these materials from resource-rich countries. In turn, this might affect the trade deficit of the country. Similarly, to have a thriving EV market structure, it will be imperative to figure out a supply chain for the same first. In order to produce millions of electric motors for India’s rising appetite for EVs, a lot of CAPEX might be required.
Charging infrastructure: For an EV owner, their day might start by unplugging their car after charging it for the entire night. Yes, public charging infrastructure is an amazing way to provide a temporary solution for people, but this needs to be coupled with a private charging infrastructure for more optimum, and practical solutions for charging.
Suitable labor force: As the electric vehicle sector booms, the demand for people who are talented and skilled to do the job will increase simultaneously. As the industry evolves, it might just be the right time to train and inculcate measures that produce electrical engineers, manufacturing experts, and even mechanics. The only caveat for them would be to be flexible as the industry evolves and moves ahead.
Consumer Sentiment for EVs: The Indian automotive sector has always been a tough nut to crack. Many international carmakers failed to penetrate the Indian markets, even though they might have been successful in doing so elsewhere. It isn’t long before the EV sector might have to face the same hurdles. While the initial USP for electric vehicles stays true to the cost-saving, and environmental good, with the changing times the consumers will have more to ask. While the domestic players are already coming up with electric car models that might be priced closely enough, if not lesser, than their fuel-based counterparts.
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Conclusion: Is India’s EV Sector Headed in The Right Direction?
As is the case with any new technology in India, or any other country in the world, the initial push is imperative. It’s the initial push in the nascent stages that go on to determine the future of the EV industry.
That’s the stage the Indian EV industry is at currently. It’d be a detrimentally bad decision to oust ICE vehicles completely away from the picture from an economic and a customer sentiment point of view.
The only true and viable way to support the Indian electric vehicle industry is to let it learn, grow, evolve, and compete directly with conventional fuel-based cars. This would in fact help customers make better decisions and determine the best course of action as per their requirements. Apart from a huge investment opportunity, electric mobility adoption might even become a global phenomenon in a few years’ time.
Yes, India’s automotive sector is on its way to becoming the third-largest car market in the world, from its current fifth position. While this happens, it seems pretty obvious that the electric vehicle market will follow suit. However, the catch is to be on the trajectory, but faster to reap the first mover benefits.
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