How Is Indian Government Driving Electric Car Demand?

The Ministry of Heavy Industries and Public Enterprises under the government of India introduced phase II of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) scheme in March 2019 to facilitate the adoption of electric vehicles (EVs) and the establishment of its manufacturing ecosystem in the country. This scheme is being implemented through demand incentives, establishment of charging infrastructure, publicity, and information, education, and communication (ICE) activities.

Thus, the increasing government support toward electric mobility will drive the Indian electric car market at a healthy CAGR of 34.5% during the forecast period (2018–2025). Resultingly, the market revenue is expected to grow from $71.1 million in 2017 to $707.4 million by 2025. The surging government support can be attributed to the soaring air pollution levels, which need to be reduced for sustainable development. The 2020 World Air Quality Report reveals that India is home to 22 of the 30 most-polluted cities in the world.

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In the recent past, electric hatchbacks were adopted in the highest number due to their lower prices than those of sedans, sport utility vehicles (SUVs), multi-utility vehicles (MUVs), sports cars, luxury cars, minivans, and microcars. However, electric SUVs will be adopted at the highest rate in the upcoming years owing to the escalating disposable income of customers and increasing recognition of SUVs as a status symbol. These vehicles are powered by lithium–nickel–manganese–cobalt oxide (Li–NMC) batteries or lithium–iron phosphate (LFP) batteries.

The technology segment of the Indian electric car market is classified into hybrid electric vehicle (HEV), plug-in hybrid electric vehicle (PHEV), and battery electric vehicle (BEV). Among these, the BEV category accounted for the largest market share in 2017, and it is expected to retain its dominance in the forecast years. This can be owed to the increasing availability of BEV models, stronger government support for them, and plunging battery cost, which is driving down their upfront cost.

The leading manufacturers of electric cars in the country include Mahindra Electric Mobility Ltd., Tata Motors Ltd., Toyota Kirloskar Motor Pvt. Ltd., Honda Motor Co. Ltd., BMW AG, Hyundai Motor Company, and Volvo Car Corporation. Their customers include individuals, government organizations, and shared mobility providers. In recent years, OEMs have collaborated with shared mobility providers to create an electric mass mobility ecosystem in the country, as this model can help lower greenhouse gas emissions and make the traffic congestion problem better.

According to P&S Intelligence, Maharashtra held the largest share in the Indian electric car market in 2017, and it is projected to maintain its dominance throughout the forecast period. This can be primarily ascribed to the Electric Vehicle and Related Infrastructure Policy 2018 of the state government. This policy aims to increase the number of registered EVs in Maharashtra to 5 lakh and generate an investment of INR 25,000 crore for EV and EV component, charging equipment, and battery manufacturing/assembly companies.

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Thus, the growing government support for EV production and adoption and surging public awareness on mitigating air pollution will fuel the usage of electric cars in India.

INDIA ELECTRIC CAR MARKET

By Technology – Battery Electric Vehicle (BEV), Plug-In Hybrid Electric Vehicle (PHEV), and Hybrid Electric Vehicle (HEV)
By Product – Hatchback, Sedan, Sport Utility Vehicle (SUV), and Others
By Battery – Lithium-Iron-Phosphate (LFP), Lithium–Nickel–Manganese Cobalt Oxide (Li–NMC), and Others
By Battery Capacity – >201 Ah and

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This release was published on openPR.