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t is a part of EV Next’s EV Perspectives.
EV Next, a division of EAI, is a leading market intelligence & strategic consulting firm for the Indian e-mobility sector.
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This post is part of a series titled “Strategizing for E-mobility Opportunities in India” from EV Next Perspectives. See all posts for this series from here. See previous post Strategizing for E-mobility Opportunities in India
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Current Market Sizes of Electric Vehicles in India
It will be instructive to look at some EV statistics for India and comparable global data.
| Vehicle Type | India | World |
| EVs (sales, 2017) | ||
| Electric bicycles | 10,000 | 35 million (almost 95% in China) |
| Electric scooters | 40,000 – 50,000 | 15 million (most of them in China) |
| Electric motorcycles (high power motorcycle) | <1000 | 0.1 million |
| Electric 3 wheelers (all variants) | 2,50,000 – 3,00,000 | 2 – 3 million (EAI estimate) |
| Electric Cars | 2000 – 3000 | 1.2 million (includes 0.4 million hybrids) |
| Electric buses | < 300 (EAI estimate) | 250,000 (mostly in China) |
| EV Charging Infra (total installed, mid 2018) | ||
| Normal AC Public Charging Points | 400 | 300,000 |
| DC Fast Charging Points | 150 | 200,000 |
*EAI estimates; Rest are estimates from diverse sources
Table 1: Electric Vehicle and Charging Station Sales in India and World
Except for electric three wheelers, where India might have a reasonable share of the global market, it can be seen from the table above that India’s contribution to the global EV market is currently insignificant.
We are at the very beginning of e-mobility in India.
Challenges to EV Growth in India
The electric vehicles sector is in the nascent stage all over the world, but in many developed countries, the growth of this sector is much faster than what it is in India. Here are the key challenges to EV growth in India.
| Category | Challenge | Analysis of the Challenge |
| Cost | High Cost of EVs – EVs cost almost 50% more than equivalent conventional vehicles (mainly owing to cost of batteries) |
- Li-ion batteries cost around $250/kWh currently, needs to go down to about $100/kWh for cost parity
- Timeframe – Significant cost reduction (50-60%) for EV cost parity will take until about 2026
- Alternatives – Lead acid batteries can be used for smaller vehicles
- Control – India has little control over the Li-ion battery cost as the country does not produce the battery cells currently and is unlikely to be a price setter in the foreseeable future
Performance Limited Range of EVs
- Most EV ranges today are 50-75% lower per charge, compared to the range achieved for a full tank on a conventional vehicle.
- Timeframe – Range of Li-ion batteries needs to increase by 75-100% for EVs to be used for inter-city travel. This could take until about 2024 for non-premium EVs.
- Alternatives – An extensive charging (or battery swapping) infrastructure could partially take care of the range challenge, but public vehicle charging infra in India is practically non-existent, and getting a reasonable extent of urban charging infrastructure in key cities alone could take 5 years (until 2024)
- Control – While the Indian government or industry has only limited control over the technology improvements to increase range, they have reasonable control on deploying public charging or battery swapping infrastructure
High Charging Time for EVs
- Normal charging could take 4-8 hours for full charge
- Fast charging could be completed in about 1 hour in many DC fast charging points, with 80% charge being completed in 30-40 minutes.
- Timeframe – For a charging time of 15 minutes or less, even DC fast charging needs a decrease of about 50% in charging time. It could take until 2025 for affordable mass market DC fast chargers in India.
- Alternatives – Battery swapping
- Control – The government or Indian industry has little control over technology to bring down charging time, as the core technologies for these are developed outside the country
Table 2: Key Constraints & Challenges to EV Growth
In short, it could take until about 2025 for most of the key challenges to EV growth to be resolved, and the Indian industry or government has only limited control over the solutions to these challenges.
How well do EVs Cater to Indian Market Needs?
Generic Needs for the Indian Automobile User
Let’s briefly consider the needs of the Indian automobile end user.
| Need or Pain Point | Relevant Market Segments |
| Price of vehicle | The most dominant need for most non-premium market segments |
| Running cost | The second most dominant need for most consumer mass market segments |
| Performance | An important need for premium, specialty and long distance vehicle segments |
| Custom features | Important only for select vehicle types |
| Cool factor (includes “go green”) | Important only for premium segments |
Table 3: Needs/Pain Point for Relevant Market Segment
Aspects for which EVs Satisfy Market Needs
- EVs fully satisfy two of the four key needs or pain points quite well – Running cost and the Cool Factor.
- EVs partially satisfy the “performance” needs. We say partially because while EVs do well on pickup, speed and being noiseless, their long charging time and limited range per charge bring them down on performance.
Aspects for which EVs do not Satisfy Market Needs
It is on the price that EVs face their biggest challenge – as is well known, EVs today do not satisfy the need for a vehicle at an affordable price. EVs cost between 40% – 80% higher than their conventional equivalents. The main reason for the high cost is the battery. This is why, while vehicles using lower-cost Lead Acid batteries cost perhaps 25-30% higher, vehicles using the more expensive Li-ion batteries could cost 50% or higher. In fact, electric buses (almost all of which run on Li-ion batteries), cost over 100% more than their fossil fuel equivalents.
Predictions for the Growth of Indian EV Sector
Automobiles comprise a diverse set of vehicles – from sub Rs 30,000 TVS XL for the lower-middle-class segment all the way to Volvo buses used by large corporates that could cost up to a crore. Such diversity in products and end users implies that predictions for EVs will also have high diversity. For instance, it is commonly accepted that electric two-wheelers and three-wheelers have a stronger short term business case for growth compared to electric cars or heavy commercial vehicles. Interestingly, electric buses are also likely to have a better business case than electric cars in the short term, even though an electric bus could cost up to Rs 2 crores, almost three times that of an equivalent fossil fuel-driven bus.
Considering all the factors and dimensions, the following are EVNext team’s overall inferences on the electric vehicles for India for the 2020-2030 period
Overall
2020 – 2025: During this period, 3-wheelers will continue showing good growth, and 2-wheelers will show CAGRs in the 20-30% range. The LCV sector could see moderate growth too during this period. Depending on how the Service/OPEX Model pans out, buses could also have moderate growth. Expect low growths for electric cars & electric HCVs during this period. 2025 – 2030: This period could see a growth acceleration across all sectors, with the acceleration being significant for two-wheelers, buses, and LCVs. We expect growth in electric cars during this period to still be low or modest, with contributions still around 1% or less of the total annual car sales. The Indian EV ecosystem and the opportunities that it brings along will evolve in sync with the above trends. The following sections provide more details on these opportunities. |
This post is part of a series titled “Strategizing for E-mobility Opportunities in India” from EV Next Perspectives. See all posts for this series from here. See next post The Value Chain for Electric Vehicle Ecosystem – An Introduction
The following are the posts in this series:
Learn more on various Status & Trends in E-Mobility across: Indian EV Prices | Global EV Market | Indian EV Market | Indian Vehicle Segments | Challenges to Indian E-mobilty | International Startups Takeaways | Indian Startups takeaways |
Know more on how EV Next can assist your business in your strategy for the e-mobility and electric vehicles sectors, Here
Wish to know everything about India’s EV market from one place? Check out the India EV Expert Guide, an 800 page comprehensive guide to the Indian EV market. Here
Get to know about 1000+ EV innovations from EVI2: Electric Vehicle Innovation Intelligence from EVNext
ZEV India Partnership – Driving Truck Electrification through Collaboration
