Electric Vehicle Market in India remains Moribund despite Huge Potential

The EV market in India remains in a moribund state despite the government’s intentions to make this a key technology to reduce the country’s dependence on huge oil imports. The government has announced some incentives and a FAME 2 package but they couldn’t go far enough in pushing the EV market. The ICE vehicle market made a solid rebound after the slowdown in the economy driven by strong pent-up demand.

The EV market in India consists mainly of low cost and low technology two-wheelers as well as three-wheelers, a large number of which are powered by lead-acid batteries and not lithium ones. The private four-wheeler market is an extremely niche one with less than 0.1% market share of the overall market. Though some car manufacturers such as Tata and Mahindras have tried to jump-start the market with attractively priced vehicles and financing plans, the numbers still remain too low.

Also, read India’s New EV Roadmap Scaring the Automobile Industry Away

The EV infrastructure build-up also remains in a very nascent stage with very few EV chargers installed around the country, though many states are giving incentives to both the EV charging and manufacturing ecosystem. The battery manufacturing incentives for pushing the storage infrastructure in the country also remains on the slow track while EV models from major manufacturers remain mostly absent. Two-wheelers are seeing most of the excitement with companies like Okinawa, Ather, and others introducing new models. However, the revenues remain absent for most of these companies. The imminent entry of Tesla will create excitement but the premium price point of Tesla will mean that the company will be able to sell only a few cars in a country with a per capita income of less than USD 2,000 as compared to its cars which cost around USD 50,000 and more.

There is no doubt about a huge industry opportunity in EVs but it remains elusive as of now, given the tipping points in terms of pricing and infrastructure seem still a few years away.