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India EV Market Poised for Growth: Report

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By Rediff Money Desk, MUMBAI   Dec 07, 2023 20:46

India's electric vehicle (EV) market is expected to grow significantly, with potential for over 40% penetration by 2030. The report highlights key growth drivers, challenges, and opportunities across two-wheelers, three-wheelers, and four-wheelers.
India EV Market Poised for Growth: Report
Photograph: Anushree Fadnavis/Reuters
Mumbai, Dec 7 (PTI) The domestic electric vehicle (EV) market is at an inflection point and is poised for significant growth, with the potential to achieve over 40 per cent penetration by 2030 against 5 per cent currently, a report said on Thursday.

The growth is expected to be driven by strong adoption (45 per cent-plus) in both two and three-wheeler categories while four-wheelers (cars) penetration is projected to grow to over 20 per cent, India Electric Vehicle Report 2023' by Bain and Company in collaboration with Blume Ventures stated.

It said that several structural challenges needed to be addressed to achieve this potential across five themes—new product development, go-to-market/distribution, customer segment prioritisation, software development, and charging infrastructure.

According to the report, e-two-wheeler market penetration can grow from 5 per cent in the last 12 months (Sep'23) to over 45 per cent by 2030, provided OEMs (original equipment makers) develop mid-segment scooter products to enable an over 50 per cent penetration in the scooter segment and introduce breakthrough entry-level motorcycle offerings, it said.

This will also require changes across the ecosystem – from reimagined distribution model, online customer engagement (community-led D2C), a scientific secondary market to localised supply chain, after sales model, and charging infrastructure, as per the report.

It also said that while E3W market has been shifting steadily towards EVs, products will need to match CNG vehicles, and entry-level E3W cargo vehicles matching comparable ICE (internal combustion engine) vehicle price points.

It will be equally important to expand the offline dealer networks and strengthen GTM) go-to-market) capabilities for B2B sales (especially in E3W cargo), as per the report, which also noted that consistent with other auto categories, scaled battery charging and swapping infrastructure will provide a fillip to E-3W penetration.

The e-four-wheeler growth (passenger cars) is expected to initially take off with the fleet before the passenger segment inflects, the report said, adding this will require fleet-specific EV models (entry-level cars in mass category) at price points comparable to corresponding ICE products.

According to the report, OEM-led distribution networks and B2B partnerships in fleet, will be critical to scale while software will become an increasingly important differentiator for OEMs.

It also said that the five focus areas for interventions to unlock EVs USD 100 billion opportunity include developing “customer-back” products to optimize capital expenditure, reimagining of distribution models to grow beyond metro and Tier 1 cities, prioritising B2B/ fleet customer segments to generate near-term momentum, use of software as a differentiator and profitability driver, and scaling up charging infrastructure.
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