India may become world’s largest EV market by 2030

With a CAGR of 43.13 per cent, India may become the largest market for electric vehicles by 2030, with commercial EVs predicted to constitute 70 per cent of the market share, as per a report by Inc42

April 13, 2020

Research by the Bureau of Indian Standards shows that the electric vehicle market will grow at a CAGR of 43.13 per cent between 2019 and 2030

The past two years have seen strong growth with product launches and a push to create an EV ecosystem, both by enterprises and the government

In February 2019, the Government approved an US$1.4 billion towards its goal of converting 30 per cent of its vehicles to electric by 2030 under FAME-II

A report by BloombergNEF states that China’s electric vehicle sales have already fallen by 44 per cent due to the COVID-19 pandemic

India may become the largest market for electric vehicles (EV) by 2030, with commercial EVs constituting 70 per cent of the market share, as per a report by Inc42, an Indian business media platform. In a 2018 report by the same publication, India had emerged as the seventh-largest manufacturer of commercial vehicles, with the fourth-largest auto industry globally. Meanwhile, research by the Bureau of Indian Standards (BIS) shows that the EV market will grow at a CAGR of 43.13 per cent between 2019 and 2030. 

Though the EV adoption rate in India is less than one per cent (basis a McKinsey & Company report), the past two years have seen strong growth with product launches from global automobile giants, local players, and startups. There has also been a push to create an EV ecosystem, through battery innovation, charging stations, and financial benefits. In 2019, the Indian Government had approved an outlay of US$1.4 billion for three years to boost electric mobility in the country and move towards its long-term goal of converting 30 per cent of its vehicles to electric by 2030. This is a part of the second phase of the signature EV scheme — the Faster Adoption and Manufacturing of Electric (and) Hybrid Vehicles (FAME). 

While the next few years are imperative to determine the success of EVs in India, one must take into account the COVID-19 pandemic, which has caused problems in both supply chain and manufacturing. A report by BloombergNEF states that China’s EV sales have already fallen by 44 per cent due to the crisis. 

With an eye on the future, several companies in India are investing heavily in EV R&D. Hero MotoCorp plans to invest US$1.4 billion in the development of alternate mobility solutions in the country over the next 5-7 years. In January, Amazon India had announced a plan to add 10,000 EVs to its fleet of delivery vehicles by 2025. Last June, Flipkart had committed to replacing 40 per cent of its delivery vans with EVs by March 2020. In 2018, ride-hailing app Ola announced that it would enlist 1 million EVs by 2021.