India Electric Vehicle Market 2024–2033

Reports Description

India Electric Vehicle Market was valued at USD 32.1 Billion in 2023 and is expected to reach USD 150.2 Billion by 2032, at a CAGR of 25.1% during the forecast period 2023 – 2032.

An electric vehicle (EV), is a type of passenger automobile powered by an electric traction motor, utilizing energy stored solely in on-board batteries. In contrast to traditional internal combustion engine (ICE) vehicles, electric cars offer advantages such as quieter operation, heightened responsiveness, superior energy conversion efficiency, and zero exhaust emissions, resulting in lower overall vehicle emissions.

The term electric car encompasses plug-in electric vehicles, particularly battery electric vehicles (BEVs), and fuel cell electric vehicles.

India Electric Vehicle Market: Growth Factors

Increase in demand for fuel-efficient, high-performance, and low-emission vehicles

The increase in demand for fuel-efficient, high-performance, and low-emission vehicles is propelling the growth of the electric vehicle market in India. As environmental concerns rise and consumers prioritize sustainability, there is a notable shift towards electric vehicles (EVs).

The push for cleaner transportation solutions, coupled with government incentives and increased awareness about the benefits of EVs, has stimulated consumer interest.

The Indian market is witnessing a dynamic transition as more individuals and businesses embrace electric vehicles, contributing to a more sustainable and eco-friendly automotive landscape. For instance, according to the Department for Promotion of Industry and Internal Trade, the government approved 100% Foreign Direct Investment (FDI) in renewable power projects.

According to industry projections, approximately 1 million electric vehicles (EVs) will be sold in India in 2022. The Indian government is offering financial incentives to boost domestic manufacturing of electric cars.

Surge in fuel prices made electric vehicles a more attractive option for consumers

The surge in fuel prices has significantly bolstered the appeal of electric vehicles (EVs) in the Indian market. As conventional fuel costs rise, consumers are increasingly drawn to EVs due to their cost-efficiency and environmental benefits. With EVs relying solely on electricity, which can be comparatively more stable in pricing, consumers find relief from the unpredictability of fuel costs.

Moreover, the heightened awareness of environmental concerns fuelled a shift towards sustainable transportation options, positioning EVs as an eco-friendly alternative. Government incentives and growing charging infrastructure also contribute to the rising popularity of electric vehicles in India.

The surge in fuel prices serves as a catalyst, propelling the adoption of EVs, not only as a cost-effective choice but also as a conscious decision aligned with environmental consciousness. For instance, increasing crude oil costs and increased taxation have led to the cost of diesel and petrol reaching new records across the country in 2022, which in turn propel the demand for electric vehicles.

India Electric Vehicle Market: Restraints

Lack of charging infrastructure hinder India electric vehicle market

The growth of the electric vehicle (EV) market in India faces a significant obstacle in the form of a deficient charging infrastructure. The scarcity of charging stations hampers the widespread adoption of EVs as potential buyers are concerned about the accessibility and availability of charging points.

Additionally, the limited charging infrastructure discourages businesses and fleet operators from transitioning to electric vehicles due to uncertainties about operational efficiency. To overcome these challenges, substantial investments and governmental initiatives are crucial to establish a comprehensive charging network, making charging points easily accessible across urban and rural areas. This infrastructure development is pivotal in catalysing the mass adoption of electric vehicles and realizing the environmental and economic benefits they offer.

India Electric Vehicle Market: Opportunities

Development of self-driving electric vehicle technology

The development of self-driving electric vehicle technology is propelling the growth of India’s electric vehicle market. This innovation enhances convenience and safety, attracting consumers to embrace electric vehicles.

The synergy of autonomous capabilities with electric propulsion aligns with global sustainability trends, encouraging a shift towards cleaner transportation solutions. As technology advances, the integration of self-driving features in electric vehicles not only addresses urban mobility challenges but also aligns with India’s commitment to reducing emissions and fostering a greener transportation ecosystem, accelerating the adoption of electric vehicles in the country.

For instance, Minus Zero, an autonomous driving startup headquartered in Bengaluru, launched India’s fully autonomous vehicle ‘zPod,’ this electric prototype relies on a camera-sensor suite paired with AI algorithms, enabling it through traffic autonomously, without the need for a human driver or a steering wheel.

India Electric Vehicle Market: Segmentation Analysis

India Electric Vehicle market is segmented by propulsion type, vehicle type, speed and region.  Based on propulsion type, the market is classified into battery electric vehicles, plug-in hybrid electric vehicles, and fuel cell electric vehicles.

Battery electric vehicles dominated the market in 2022 with a market share of 40% and are expected to keep their dominance during the forecast period 2024-2032. Advancements in battery technology, coupled with decreasing costs, make BEVs more accessible to consumers.

Initiatives like incentives, subsidies, and charging infrastructure development further promote their uptake. As awareness of environmental concerns rises and consumers seek cost-effective, efficient transportation, BEVs play a pivotal role in shaping and expanding the rapidly evolving electric vehicle market in India.

Based on vehicle type, the market is segmented into two-wheelers, passenger cars and commercial vehicles. Two- wheelers dominated the market in 2022 with a market share of 40% and are expected to keep their dominance during the forecast period 2024-2032, driving the electric vehicle (EV) market in India due to their widespread adoption and practicality.

With the increasing popularity of electric scooters and motorcycles, they address key concerns such as affordability, efficiency, and last-mile connectivity in congested urban areas. The lower operating costs and government incentives further boost the appeal of electric two-wheelers.

In addition, companies offering affordable and technologically advanced electric two-wheelers have gained traction, contributing significantly to the overall growth of the EV market. Additionally, rising environmental awareness and government initiatives promoting sustainable transportation drive consumer interest in electric two-wheelers, positioning them as a crucial catalyst for the broader transition to electric mobility in India.

Based on speed, the market is segmented into less than 100 MPH, 100 to 125 MPH and more than 125 MPH. Less than 100 MPH dominated the market in 2022 with a market share of 45% and is expected to keep its dominance during the forecast period 2024-2032, playing a pivotal role in shaping the EV market.

This emphasis aligns with the country’s urban-centric transportation needs and traffic conditions, where lower speeds are more practical and efficient. EVs with reduced maximum speeds are often better suited for congested city environments, addressing concerns about safety and infrastructure limitations. Additionally, these vehicles tend to be more affordable, making them accessible to a broader segment of the population.

Moreover, India aims to transition towards sustainable mobility, prioritizing EVs with speeds under 100 MPH reflects a strategic approach that aligns with practical usage patterns, affordability, and the unique demands of the Indian transportation landscape.

Report Scope

India Electric Vehicle Market: Regional Analysis

India Electric Vehicle market is segmented into South India, North India, West India and East India. South India dominated the global market in 2022 with a market share of 45% in 2022 and is expected to keep its dominance during the forecast period 2024-2032.

South India plays a pivotal role in steering India’s electric vehicle (EV) market, significantly influencing its growth and adoption. The region, encompassing states such as Karnataka, Tamil Nadu, Telangana, Andhra Pradesh, and Kerala, has emerged as a key hub for EV manufacturing, research, and development.

Moreover, cities such as Bengaluru, Chennai, and Hyderabad have become focal points for EV production facilities and innovation centers, attracting major players in the industry. The progressive policies and proactive initiatives undertaken by South Indian states have created a conducive environment for EV adoption.

Furthermore, incentives such as subsidies, tax breaks, and supportive infrastructure development, including charging stations and dedicated lanes, have spurred the uptake of electric vehicles. Moreover, the region’s relatively high awareness and acceptance of sustainable practices align well with the environmental benefits offered by EVs.

South India continues to drive advancements in technology, infrastructure, and policy frameworks, it catalyzes the nationwide shift towards electric mobility. The region’s commitment to sustainable transportation contributes significantly to positioning India as a key player in the electric vehicle landscape.

India Electric Vehicle Market: Recent Developments

• In February 2024, Tata Punch EV launched the most affordable fully electric sports utility vehicle (SUV) in India, with a larger battery pack compared to the 24kWh unit featured in the Tiago EV and Tigor EV models. This launch signifies a notable addition to Tata’s electric vehicle lineup.

• In December 2023, Mahindra & Mahindra announced the introduction of its all-new electric vehicles, planning to launch four electric SUVs by the first quarter of 2025. The company aims to enhance its electric vehicle portfolio with these upcoming models, demonstrating a commitment to advancing sustainable mobility.

• In August 2023, Hyundai Motor India (HMIL) announced an investment of Rs 4000 crore for the launch of six new models by 2028. These upcoming vehicles, comprising both electric and internal combustion engine (ICE) variants, will be produced at the company’s Chennai-based factory.

List of the prominent players in the India Electric Vehicle Market:

• Tata Motors
• MG Motor India
• Mahindra & Mahindra
• Hyundai Motor India
• Kia India
• Citroen India
• Hero Electric Vehicles
• Ather Energy
• Okinawa Autotech
• Bajaj Auto
• TVS Motor
• Ampere Electric
• Piaggio India
• Atul Auto Limited
• Jitendra New EV Tech
• Earth Energy EV
• SUN Mobility
• Revolt Motors
• AVERA New & Renewable Energy
• Lohia Auto Industries
• OLA Electric Mobility Private Limited
• Others

These key players are adopting various growth strategies such as mergers & acquisitions, joint ventures, expansion, strategic alliances, new product launches, etc. to enhance their business operations and revenues.

The India Electric Vehicle Market is segmented as follows:

By Propulsion Type

• Battery Electric Vehicle
• Plug-in Hybrid Electric Vehicle
• Fuel Cell Electric Vehicle

By Vehicle Type

• Two-Wheelers
• Passenger Cars
• Commercial Vehicles

By Speed

• Less Than 100 MPH
• 100 to 125 MPH
• More Than 125 MPH