In the transformative landscape of India's transportation sector, the spotlight on clean energy during the last couple of years has set the stage for sustained electric vehicle (EV) adoption in India going forward. Contrary to a mere transient trend, the data points paint a compelling picture of the EV sector’s enduring impact, with a projected 66% CAGR over the next decade to become a $200 billion plus industry by 2030. This estimated growth signifies a monumental shift in India’s mobility paradigm.
The cumulative sales of the EV industry have reached a record 1.3 million units over the last year. This reflects a robust 50% year-on-year growth compared to the same period in 2022, which saw 0.9 million units sold. The low Total Cost of Ownership (TCO) for EVs, facilitated by strategic government initiatives such as FAME Subsidies, and PLIs, have made EVs financially attractive across a broader spectrum of applications.
The three-wheeler market exhibits a rapid transition to zero-emission mobility, with a 71% year-on-year growth for E-Rickshaw and e-autos combined, outpacing even electric two-wheelers at a 40% year-on-year growth rate.
The commercial vehicle sector owing to its practical cost advantages, has registered the highest year-on-year increase at 80% for Cargo E3W, reflecting a growing preference for electric mobility across commercial applications. Notably, the sales share of EV shows E2W (56%) leading as compared to E-Rickshaw (30%), E- Autos (3%), E3W Goods Carrier (3.9%), E4W (5.35%) and others (0.36%).
In India's transportation system, the faster adoption of EVs can be attributed to various incentives such as cost considerations, environmental factors & government policies. The awareness of the low running cost*
(₹0.43/km for E2W as compared to ₹ 1.37/km for the Petrol Variant and ₹ 1.12/km for E3W cargo as compared to ₹ 5.7/km for CNG 3W Cargo) has been one of the major factor for the increase in adoption across commercial application of these categories.
The government has also approved schemes such as ‘PM e-Bus Sewa” that will deploy 10,000 e-Buses on PPP model in 169 cities whilst upgrading Infrastructure 181 cities under Green Urban Mobility Initiatives.
The government has set a target of commercial EV sales to be at a 70% penetration by 2030. Till date, states with Metropolitan & megapolis cities sold more of electric 2Ws which together constituted about 75% of the total EV sales in these areas. On the other hand, states with Tier 2/3 cities attributed a large chunk of their sales to electric 3W with majority of the sales coming from E-Rickshaws.
In the previous quarter, Uttar Pradesh had the highest share (19.6%) of EVs sold dominated by E-Rickshaws & E-Autos (82.4%). Uttar Pradesh, Bihar and Assam have the maximum sales in the electric 3W category, with a sales share of 39.5%, 13.2% and 10%, respectively, of all electric 3Ws sold in India in Q2 FY 23-24 suggesting a strong proclivity towards the emphasis on deriving value for money with commercial adoption.
Navigating these cities presents distinct challenges, primarily rooted in conventional vehicle purchasing through dealership networks. In stark contrast, metropolitan areas have embraced diverse adoption models, including subscriptions and leasing, showcasing a more dynamic and innovative approach to EV adoption.
The availability of charging stations (both public and private), and swapping stations alleviate concerns related to range anxiety and reinforces the feasibility of incorporating electric vehicles across metros into commercial fleets, a problem still prevalent in non-metropolitan areas. However, as the infrastructure matures in urban areas, it is expected to cause a spillover effect in other regions as well. The urban-rural dichotomy in EV adoption is diminishing, emphasising the need for flexible strategies tailored to the unique demands of different urban landscapes.
Looking beyond adoption, the future of EVs is intricately tied to technological advancements in battery technologies, charging infrastructure & EV components. Lithium-ion batteries (LiBs), constituting 50%-60% of an EV's cost, have undergone remarkable advancements. Solid-state batteries, lithium-sulphur batteries, silicon anodes, and innovative recycling methods are at the forefront of shaping the battery landscape.
As the number of EVs on the road increases, so does the imperative for efficient batteries, their recycling and repurposing. Various startups are pioneering cost-effective and sustainable recycling methods, with second-life batteries emerging as a promising avenue for continued energy use even after their vehicular lifespan as Energy Storage Systems.
Meanwhile, EV components are advancing on both hardware and software fronts. The Battery Management System (BMS) integrated in an EV ensures optimal battery health, while development of advanced motor control systems and vehicle control units (VCUs) will aim to enhance efficiency and real-time communication of vehicle components.
Charging infrastructure is rapidly evolving, overcoming challenges with innovative solutions that are currently under prototype stage like Wireless Charging and Bidirectional Charging (V2G Technology), reflecting a dynamic shift toward convenience and sustainability.
The EV surge witnessed in 2023 has emphasised that it is not a momentary blip but a prologue to a sustained and transformative era in India's transportation narrative. Governmental interventions have democratised EV adoption, making it accessible across diverse demographics. Especially the increasing participation of Tier 2 and Tier 3 cities in EVs adoption challenges traditional perceptions and underscores the inclusive nature of technological revolution the country is currently going through.
In sum, technological innovations continue to shape the future of EVs and by expanding their scope from advanced batteries to sustainable practices, the narrative unfolds as a holistic and enduring transformation towards a cleaner, greener, and technologically advanced transportation ecosystem.
*Running cost calculated with cost of electricity at ₹14/unit. 2W with a 4kWh battery and a range of 130 km & 3W with an 8kWh battery with a range of 100 km. ICE Petrol 2W with a mileage of 70km/l, ICE 3W Cargo with a mileage of 15 km/kg
—The author, Karan Mittal, is Partner, EV2 Ventures. The views expressed are personal.
(Edited by : C H Unnikrishnan)
First Published: Mar 15, 2024 12:02 PM IST
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