While the world is now racing towards electrification of its automobiles, the penetration of electric vehicles (EVs) is highly skewed across regions. Europe and China have the lion’s share of electric vehicle sales, and the USA is catching up, but the EV adoption rate in the rest of the world is far behind.
How about India? The revolution started with 3-wheelers a few years ago, with e-rickshaws spawning across major urban centers and rural areas as well. 60% of all passenger 3-wheelers sold today are electric. The share of electrics in cargo 3-wheelers sales is 35%.
What is most exciting is that the electric bug has now hit the 2-wheelers. And 2-wheelers make up nearly 77% of all automobile sales in India.
In September 2022, electric 2-wheelers grabbed a share of over 5% in overall sales. This figure was a meager 1.8% just over a year ago.
In the April to September 2022 period, 2,77,910 electric 2-wheelers were sold across the country. This is a whopping 404% increase over 55,147 units sold in the same period last year. If this isn’t a tipping point, I don’t know what is!
According to McKinsey, the Indian electric 2-wheeler market will hit 4.5 to 5 million units by 2025, accounting for 25%-30% of the total market, and 9 million by 2030.
There is no doubt that the real EV revolution in India will be brought about in the 2-wheeler segment, simply because it is by far the largest in sales volumes.
The most glamorous segment of the automotive industry, the passenger car, has been a laggard in India when it comes to electrification. A large part of the reason is because of the lack of available choices to the Indian consumer. The biggest player in the market – Maruti Suzuki – does not have a pure electric car in its portfolio. I wonder why. The initial high price of electric cars is also a major deterrent for buyers.
However, there are bright sparks in the current fiscal. As per FADA, the cumulative retail sales of electric cars in the first six months of FY23 stood at 18,142 units. Now, these are very modest numbers but reflect growth of 268% year-on-year. The runway is long, but the bird is taxiing for take-off.
Tata Motors has an overwhelming market share of 85% in electric cars. The recently launched Tiago EV has a starting ex-showroom price of Rs. 8.5 lakhs, which should be quite attractive to a lot of buyers. Deliveries begin in January 2023, and this should spur the sales of EVs toward a higher share.
According to a study by Deloitte, the overall sales of EVs in India are likely to jump to 1.6 million units by 2025 and go up further to 15.3 million units by 2030. Naturally, this will be led primarily by two-wheelers, followed by three-wheelers and commercial vehicles and cars.
The Indian consumer is choosing to switch from ICE (internal combustion engine) vehicles to EVs, a trend that will only gather pace in the coming months and years. Game on!
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