The Transformation of the Indian Automobile Industry towards Electric Vehicles (EVs)
The Indian automobile industry is undergoing a rapid transformation, particularly in the two- wheeler market, as the shift from internal combustion engine (ICE) vehicles to electric vehicles (EVs) takes place. This transition is not limited to specific brands but rather driven by the growing consumer demand for better quality, service, and affordability. A clear example of this transformation is the rise of new Indian manufacturers, who are offering multiple options with next-generation power-trains, innovative features, and cost-effective solutions for daily use. Major Original Equipment Manufacturers (OEMs) are now collaborating with these new entrants, a trend that bodes well for the Indian automotive market and could contribute to reducing unemployment. As technology evolves, so do the opportunities in this sector.
The Rapid Growth of the EV Two-Wheeler Market
The EV two-wheeler market in India began gaining traction around 2017-18, with approximately 54,800 units sold. The market witnessed impressive growth in 2018-19, crossing the 100,000-unit mark for the first time with 130,252 units sold. This growth continued in 2019-20, with sales reaching 152,000 units, a 20% increase from the previous year. By 2021-22, Hero Electric held the largest market share at 33%.
However, the real “rapid transformation” came in the 2022-23 period, when sales surged to 622,337 units, reflecting a remarkable 210% increase compared to 2021. This surge demonstrates the clear demand and potential for EVs in India. The EV two-wheeler market currently holds a 59% market share, and it is expected to reach 80% by 2025-26.
Despite this positive growth, some consumers still harbor misconceptions about the safety and reliability of EV two-wheelers, particularly concerning fire resistance. These myths are gradually being overcome as more people adopt EVs, gaining confidence in their use. The adoption of battery swapping technology is also gaining traction, addressing concerns related to charging infrastructure.
EV Three-Wheelers: A Booming Segment
The three-wheeler segment, particularly electric rickshaws, is another area of significant growth. E-rickshaws now make up 83% of the market share for passenger rickshaws in India, representing a major shift from traditional Old rickshaws. This shift has been particularly beneficial for daily wage earners, as electric rickshaws require less physical strength to operate and come with lower operating costs. The government has supported this transition through subsidies and loan facilities, creating a favorable market environment.
The EV three-wheeler market is also witnessing the introduction of new electric loaders, which are popular among entrepreneurs and businesses due to their cost-effectiveness. Leading manufacturers like Tata, Mahindra, Bajaj, and Euler EV are responding to the needs of both transporters and passengers with electric three-wheelers. These vehicles offer low-cost charging options, powerful torque, and instant acceleration, making them a viable and eco- friendly alternative to traditional power-trains. By 2025-26, the market share for EV three- wheeler loaders is expected to grow to 60%, while passenger EV three-wheelers are predicted to reach a 75% market share.
EV Four-Wheelers: Emerging Market with Strong Potential
While the EV four-wheeler market currently holds just 2.4% of the total market share, it is poised for significant growth. Early attempts by manufacturers like Mahindra with the Reva and Reverto faced challenges due to limited charging infrastructure and competition from CNG vehicles. However, the launch of Tata Motors’ Nexon EV in 2019 marked a turning point. Despite
initial slow sales due to the COVID-19 pandemic, Tata Motors’ EV sales have grown significantly, and they now hold a dominant 63% market share in India’s EV car segment. Tata Motors also boasts the highest number of charging stations through Tata Power.
Other manufacturers, including MG, Mahindra, Vin-fast, Citroen, Kia, and premium brands, have entered the EV market, which is helping to build consumer confidence. Additionally, Maruti Suzuki, the largest car manufacturer in India, has recently introduced its EV offerings. This influx of new entrants is expected to propel the growth of the EV four-wheeler market, which is projected to capture 30% of the market share in the coming years. Government initiatives, such as the FAME-2 subsidy program and state-level incentives, are further boosting this growth.
Charging Infrastructure and Consumer Adoption
One of the key concerns for potential EV owners has been the availability of charging infrastructure, particularly for long-distance travel. However, this issue is gradually being addressed as more charging stations are being built and activated. Home charging solutions, which were previously a challenge in high-rise apartments, are also becoming more accessible as builders and residents work together to install charging points.
As the number of EV buyers continues to rise, the demand for charging infrastructure will keep pace, making EV ownership more convenient and reliable. In time, it is expected that EVs will become the dominant form of mobility in India.
Commercial Electric Vehicles: Trucks, Buses, and Tractors
The transition to electric power-trains is also making strides in the commercial vehicle sector. Tata Motors currently holds a 99% market share in the electric bus segment. Many state governments, including Delhi, Maharashtra, and Tamil Nadu, are making significant moves toward transitioning their public transportation systems to EVs. This shift is both financially and environmentally beneficial.
Electric trucks are also gaining traction, particularly among drivers who appreciate the ease of driving and the performance benefits, such as better torque for hilly and rough terrain. As the charging infrastructure continues to expand, the reliability of EV trucks is increasing, and they are becoming an increasingly popular choice for businesses.
Farmers, too, are starting to benefit from the introduction of electric tractors. While adoption is still in its early stages, manufacturers like Sonalika, Fendt, CNH Industrial, and Kubota are already making their presence felt in the market. As farmers embrace this technology, they will not only save costs but also contribute to environmental sustainability.
Conclusion: A Promising Future for EVs in India
The rapid growth of the Indian EV market across various segments—two-wheelers, three- wheelers, four-wheelers, and commercial vehicles—is clear evidence of a transformative shift. This change is supported by government initiatives, technological advancements, and an increasing number of manufacturers entering the market. As India continues to invest in infrastructure and incentives, the adoption of EVs is expected to increase exponentially.
Looking ahead, it is likely that by 2030, the Indian automobile market will be almost entirely dominated by electric vehicles. The ongoing revolution in the Indian automobile industry is an exciting and transformative journey, and we are fortunate to witness it unfold.
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