Charging Up: Inside India’s EV Growth and Future
India’s electric vehicle (EV) market is zooming ahead, fuelled by rising sales, new launches from Maruti, Tata, Mahindra, Ola Electric, and Honda, and the push for sustainable mobility. This revolution is hard to miss, whether it’s electric two-wheelers or trucks, buses or bicycles.
Going by this upward trend, October 2024 was a landmark month, with passenger EV sales crossing the 10,000 mark monthly, up 38% year on year, as per the latest data from Vahan.
Additionally, the cumulative sales of electric vehicles including cars, buses, two-wheelers and three-wheelers) registered a record monthly retail sales of 217,621 units in October 2024, up 55% year-on-year!
No wonder India is the second-largest market for electric two-wheelers (e2Ws) globally, having sold 0.9 million vehicles in the calendar year (CY) 2023. And also the world’s fourth-largest auto market overall.
What’s fuelling this EV penetration in India? Let’s take a look.
e-Driving Forward
The last few years have seen a fundamental shift in how India looks at electric vehicles, led by government incentives, private sector enthusiasm and a rising demand for cleaner, affordable transportation. In 2023, EV sales hit a significant milestone, crossing the 1 million mark. Bain & Company, in a report, stated that electric vehicles could account for more than 40% of India’s automotive market and generate over $100 billion of revenue by 2030.
And India is on track. It aims for 80% of two-wheeler and three-wheeler vehicles, 70% of commercial cars, 40% of buses, and 30% of private car sales to be electric by 2030.
Seems too ambitious? This is where the implementation of policies comes into play. The latest PM E-Drive scheme, with an outlay of ₹10,900 crore over two years, offers subsidies for electric two- and three-wheelers (e2Ws and e3Ws) to keep the EV buzz going strong. This latest initiative comes after the Faster Adoption and Manufacturing of Electric Vehicles (FAME) policy expired in March 2024, and the three-month Electric Mobility Promotion Scheme (EMPS), ended on September 30, 2024.
So now, let’s understand how the industry is charging up and why it’s time for you to plug in, too!
Electrifying the Market: Tata vs Others
It’s best to start with the juggernaut in the passenger EV segment. With models like the Nexon EV and Tiago EV, Tata enjoys a 58% market share in the electric four-wheeler (e4W) segment, according to the Federation of Automobile Dealers Associations (FADA). Affordable, reliable, and backed by Tata Power’s charging infrastructure, Tata is the Tesla of India.
However, the competition is growing. JSW MG Motor India is gathering momentum with the launch of the new MG Windsor, which has not only contributed to 30% of total wholesale electric car sales in October but also saw 15,000 bookings within the first 24 hours, extending the waiting period to between four and over six months, depending on the variant.
Mahindra & Mahindra are revving up the EV space too. Mahindra sold 907 units of its XUV400 EV in October, marking a year-over-year growth of 227.44%. The automaker’s BE 6e and XUV e8 are making waves in the premium SUV segment.
Player-wise share in EV retails
Moving to electric two-wheelers — the biggest volume driver of the EV industry in India — this segment accounted for 64% of total India EV sales in October, as per data on the Vahan website (as of November 1).
Ola Electric emerged as the leader in the electric two-wheeler segment, selling over 50,000 units in October alone and claiming a 30% market share. The company also recently announced the launch of two new electric scooters at just ₹39,000, making them the cheapest in Ola’s stable yet. Ola will begin deliveries of the scooters from April 2025.
Moreover, Honda has officially entered India’s EV market as it recently launched the electric version of its iconic Activa scooter, Activa e, along with another model called the QC1.
But, Why EVs?
As per sales reports, the rate of EV penetration in India increased to 7.71% in October 2024 from 6.47% a year ago. The International Energy Agency’s Global EV Outlook 2024 mentioned that around 2% of all cars sold in 2024 were electric. So, the question arises: Why do people prefer EVs to traditional cars?
First off, let’s talk about savings! Running an EV costs way less than a petrol or diesel vehicle. Charging an EV is significantly cheaper than filling up a fuel tank.
Then there’s the green factor. Many consumers are switching to EVs to do their part for the planet. Going electric doesn’t just feel good; it’s also good for the Earth.
Now, the tech. EVs are bringing top-notch features to the table. Take the Tata Nexon as an example. Its traditional petrol and diesel versions boast fuel efficiencies of 17–18 km/l (petrol) and 21 km/l (diesel). But the Nexon EV Max outshines them with a range of 312–453 km on a single charge. While EVs often come with a higher upfront price, their long-term value proposition is undeniable.
And let’s not forget the perks from the government. Schemes like the PM E-Drive subsidy are sweetening the deal with upfront incentives and investments in charging infrastructure. Plus, the upcoming FAME III initiative is expected to make EV ownership more accessible.
State governments are also joining the action, offering incentives and facilitating charging infrastructure. Cities like Delhi, Mumbai, and Bengaluru are already paving the way with substantial progress in EV adoption and supportive policies. It’s a combined effort that’s making EVs more appealing for everyone.
Sectors Powering Up!
The EV market’s growth isn’t just about vehicles; it’s about an entire ecosystem thriving together. Here’s a breakdown of the top sectors poised to benefit from the electric revolution:
- Battery Manufacturing: The backbone of EVs lies in their batteries, and innovations in lithium-ion technology are driving costs down while enhancing performance. India’s emphasis on domestic battery manufacturing will play a pivotal role in shaping this sector. The PLI (Production-Linked Incentive) Scheme for the National Programme on Advanced Chemistry Cell (ACC) Battery Storage received ₹250 crore in the 2024-25 Budget, significantly higher than the revised estimate of ₹12 crore in 2023-24.
- Charging Infrastructure: With EV adoption rising, accessible and efficient charging networks are critical. Startups and established companies are investing in rapid charging stations, swapping networks, and home charging solutions. Government initiatives like the PM E-Drive scheme are accelerating infrastructure rollout.
- EV Components Manufacturing: Motors, controllers, power electronics, and thermal management systems are essential for EVs. Companies specialising in these areas are expected to thrive as the demand for high-performance components rises.
- Software and Connectivity Solutions: Innovative vehicles demand more intelligent software. Companies offering IoT and AI solutions for EVs are becoming indispensable, from navigation systems to app-based diagnostics.
- Green Energy Production: Charging EVs sustainably requires a robust renewable energy backbone. Solar and wind energy projects directly benefit from the EV boom as they provide a cleaner grid for powering vehicles.
If you are interested in investing in this sector, you can explore the Electric Mobility smallcase.
Key Challenges
Highlighting the current EV market in India, a KPMG report, ‘Getting real about the EV transition’, summarised, “It’s still an exciting—and rewarding—journey, but it may take longer, and the ride won’t be smooth.” Other crucial areas that need attention are:
Infrastructure Deficit: The current charging infrastructure is inadequate, leading to range anxiety among potential EV buyers. India has an active network of 934 public charging stations, mainly limited to major urban areas like Delhi, Bengaluru, and Mumbai.
High Initial Costs: EVs generally have a higher upfront cost compared to internal combustion engine vehicles, which can deter price-sensitive consumers. Yes, government subsidies and the gradual decline in battery prices are helping bridge the gap, but EVs remain pricier than their petrol or diesel counterparts.
Supply Chain Constraints: Despite the exciting discovery of lithium deposits in places like Jammu & Kashmir and Rajasthan, India still leans heavily on imports—especially from China—for critical EV components. This dependence brings its own set of challenges, like potential supply chain hiccups and fluctuating costs. Building a more self-reliant supply chain is the next big hurdle for India’s EV dreams.
For Investors: Why EV Stocks are Electric
By now, you might have got a fair idea of why the EV sector is poised to grow. Therefore, as an investor, if you’re looking to invest in this sector, here are some pointers to keep in mind:
Government Policies: Stay informed about subsidies, incentives, and regulations that can impact the EV market.
Technological Advancements: Monitor innovations in battery technology, charging solutions, and vehicle design that can influence market dynamics.
Market Competition: Assess the competitive landscape, including new entrants and existing players’ strategies.
Final thoughts…
India is still in the early stages of its EV journey, facing challenges galore. That said, the sector is still growing and has vast potential from domestic and international players. After all, this isn’t just about cool EVs on the road—it’s about gearing up for long-term climate resilience and building a future where eco-friendliness and innovation cruise together.
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