The future of Electric Vehicle market is likely to be an INR 50,000 crore opportunity in India by 2025. Two- and three-wheelers expected to drive higher electrification of the vehicles in the medium term post-COVID-19.
The total cost of ownership in the case of low and medium-speed electric two-wheelers is already lower than regular fuel engine vehicles. This is the present and projected situation of electric vehicles in the country.
Electric vehicles in India could grow by 500 billion by 2025. And two and three-wheelers segment will rule the future of the electric vehicle market.
Over the past decade, the economics of this technology has drastically improved.
And by this improvement, the future of electric vehicle market would grow up by 9% by 2024-2025, and it will be majorly in the two-wheeler segment.
Because of the right economic environment, this number can further grow up to INR 12,000 cr. by 2024-2025.
Future of Electric Vehicle Market will largely depend on the E-Rickshaw’s and it has also become the largest contributor in the Electronic Vehicle market in India in a short span of time.
Though this market is still very much unorganized because of lead-acid batteries. And that needs to be more organized in the coming years. Shifting it from lead-acid batteries to lithium-ion batteries by 2024-2025 will resolve the unorganized structure.
It has to be more rapidly and as expect almost 40% E-Rickshaw will be run on lithium-ion batteries.
The transition of the electric vehicle has already accepted the world market, but mass adaptation is still a topic of discussion.
But the environmental demand, the population is slowly moving towards the electronic vehicle option and creating mainstream mobility.
The current pandemic situation is expected to accelerate the growth rate of the electric vehicle market.
Customers nowadays are very much concerned about the environment and the healthy atmosphere around themselves. This will more push for the electric market to grow at a big time.
India is the fourth largest automobile market in the world.
For two-wheeler, it is the second-largest market with 20 million units per year. And India as a country heavily depends on oil import. The import value is coming to near about $120 billion in FY2019.
Heavy population density is another concern area. Considering this factor population are highly interested to buy an electric car or a two-wheeler. It will become a natural push for the future of the electric market.
On the discussion of ownership cost of high-speed electric two-wheelers and other cases such as retail four-wheelers and commercial vehicles, regulatory informed us that, the total cost of ownership will become more favourable as the battery prices would drop further.
The commercial vehicle category is another major factor to boost up the future of electric vehicle market in India. The government should focus on this category by ignoring total ownership cost.
Electric Vehicle adoption in the commercial category is expected to be at 13% by 2024-25 and the segment to reach 60 billion by that time.
The future of electric vehicle market is a boost to a healthy economy on the basis of the total cost of ownership. And we would expect to see intensive action in this space going forward.
The report says, around 20% of electronic vehicle penetration will be visible in this category by FY25 and the value would go approximately 40 billion by this time.
For medium-term electronic vehicle adoption in the four-wheeler category to stay limited to commercial or fleet applications. The overall penetration in the electric four-wheeler segment is expected to be about 2%.
If everything goes fine as per plan electric vehicle market trends can go up to 5% with a segment of 100 billion by FY2025.
The government is also planning to hike its custom duty on the import of electric vehicles and urge indigenous companies to participate under the e-mobility partnership plan of the battery swapping network.
The government has already proposed the following benefits to its citizens-
- Buying an electric vehicle, customers can avail INR 1.5L tax benefit on interest paid on an Electric Vehicle loan.
- Scraping of registration fees for Electric vehicles has also proposed by this year’s budget.
Few companies have already considered electric vehicle market trends by setting up a few infrastructures.
- Tata Power has signed MoUs for setting up commercial electric vehicle charging stations at HPCL, IOCL, and IGL retail outlets.
The organization has just introduced 100 quick-charging stations in different urban communities.
In Mumbai, the organization has just set up 30 stations and it will further increase to 200 numbers by one year from now.
Other factors mainly policy, battery cost, charging infrastructure, and supply chain localization directly involves the adoption of electronic vehicles in various segments in the country over the next decade.
Light commercial vehicles in the electric vehicle category also make the total cost of ownership a sense and around 4% electronic vehicle adoption in this segment by FY25.
That translates into a 15 billion market opportunity in the future of the electric vehicle market.