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India's EV Market To Surge, Predicted $36 Billion Value By 2030
India's electric mobility sector is set to grow at a compound annual growth rate (C) of 49 over the next six years, according to a report by Praxis Global Alliance. The market is projected to expand from $3.3 billion in FY24 to $36 billion by 2030, primarily driven by electric two-wheelers and four-wheelers.
The report predicts that by FY30, electric vehicles will make up 36% of total passenger vehicle sales. Sales are expected to jump from 1 million units in FY24 to 13 million units by FY30. This surge will be led mainly by the e-two-wheeler segment, which is anticipated to reach 12.6 million units annually, representing 40% of total two-wheeler sales.
Electric Two-Wheelers and Four-Wheelers
Electric four-wheelers are also expected to see significant growth, with a penetration rate of 16%, translating to sales of approximately 877,000 units. Meanwhile, e-three-wheelers used in public transportation are projected to grow fivefold from their current figure of 100,000 units in FY24.
The report highlights that the price gap between electric two-wheelers and traditional internal combustion engine (ICE) two-wheelers will narrow significantly. Currently at a 75% differential, this gap is expected to reduce to just 15%. This change will be driven by local production of EV components and a global decrease in battery costs.
Government Subsidies and Economic Impact
Subsidies under the Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME) scheme will help original equipment manufacturers achieve economies of scale. These savings will likely be passed on to consumers, further reducing the price difference between electric and ICE vehicles.
Aryaman Tandon, Managing Partner for Energy and Transportation at Praxis Global Alliance, emphasised the need for expanding the FAME II scheme. "Expand the FAME II scheme by increasing the total outlay and ensuring a higher utilisation rate of the allocated budget. This includes more substantial subsidies for EV purchases and incentives for manufacturers," he stated.
Investment in R&D
Tandon also stressed the importance of investing in research and development for advanced battery technologies. "Invest in R&D for advanced battery technologies and local manufacturing of batteries to reduce dependence on imports and lower costs," he added. Collaborative projects between research institutions and private sectors could be funded as part of this initiative.
The report underscores that these measures will not only boost EV adoption but also contribute significantly to India's clean mobility goals. By making electric vehicles more affordable through subsidies and local manufacturing, India can accelerate its transition towards sustainable transportation.
This comprehensive approach aims to make electric mobility accessible while fostering innovation within the industry. The anticipated growth in both two-wheeler and four-wheeler segments reflects a broader shift towards cleaner energy solutions.
The findings indicate that with strategic investments and supportive policies, India can become a leader in electric mobility. The focus on reducing costs through local production and technological advancements is crucial for achieving these targets.
The projected growth figures highlight the potential impact on India's automotive market. As electric vehicles become more prevalent, they are expected to play a key role in reducing carbon emissions and promoting environmental sustainability.
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