By FY26, India's electric car (e-car) market is predicted to account for nearly 12% of all passenger automobiles, owing to a better ecosystem and faster adoption of electric vehicles due to factors such as cheaper maintenance costs and rising fuel prices.
Electric vehicle adoption has exploded worldwide, with sales in the first half of 2021 already exceeding those in 2020. Similar patterns can also be seen in India.
In India, the electric vehicle market is not growing at the same rate as it is in other nations. For example, although battery electric cars (BEVs) accounted for 5.4 percent of total passenger vehicle sales in Europe in FY20, they accounted for only 0.2 percent in India. According to a survey by JMK Research, with a better ecosystem, the share of e-cars would expand to 12% of all passenger cars by FY26, clocking 5,14,365 units in e-car sales, which translates to a CAGR of 152.94% from FY21 to FY26.
In India, e-car sales grew after 2019, with a 361.78 percent year-over-year growth in 2020. As of July of this year, registrations for 2021 have climbed even more, surpassing 2020 sales.
Shift in perspective
While the Central government has taken positive initiatives to support and accelerate the expansion of India's EV ecosystem, the recent reorganization of FAME-II policy suggests that the government has turned its focus to electric two-wheelers (E2Ws) as a means of generating demand for short-term growth.
According to a new study by JMK Research, e-cars may have a greater upfront cost than their ICE counterparts, but their TCO over a 5- and 10-year period will be 35-56% lower for e-cars, depending on the driving scenario.
However, there are several significant obstacles to choosing e-cars over ICE cars, the most significant of which is the current dearth of options on the market.
Over the previous four years, two companies have dominated the Indian e-car business: Tata Motors and Mahindra, which together account for 80% of the total market. These firms' e-cars range in price from Rs. 8 lakh to Rs. 14 lakh. However, the lack of options in the inexpensive market (priced under Rs. 8 lakh) may be a factor in e-car adoption being sluggish.