Electric vehicles have been one of the government’s main focuses in order to reduce gasoline import bills and reduce carbon emissions. However, electric vehicle (EV) penetration is still developing in the country. According to a recent report by Moody’s Investors Service, even though India has the world’s third-largest auto market, electric vehicle penetration is currently only around 1%.
In 2022, India beat Japan to become the third largest auto market after China and the United States.
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The report states that certain factors will play a key role in accelerating the adoption of EVs. These factors are government incentives including incentives for consumers, local battery manufacturing, state-level subsidies and reduced GST rates. To meet the government’s target of 30 percent growth by 2030, the rate at which EV sales will grow will also depend on the country’s charging infrastructure, the time it takes to recharge vehicles, and consumers’ readiness to switch to EVs.
The government aims to account for 30 percent of private car sales, 70 percent of commercial vehicles and 80 percent of two- and three-wheelers by 2030.
Moody’s reports that Tata Motors maintains its first-mover advantage in the Indian electric vehicle market, capturing 85% market share in the April-December 2022 period. Thanks to its 250 dealerships in 165 cities, the company has sold 50,000 electric vehicles and has close to 4,300 charging points.
The company has announced plans to increase its electric vehicle lineup from four to 10 by March 2026. Its electric vehicle business has raised $1 billion from private equity investor TPG.
Based on the geographical distribution of global EV sales last year, the report said that around 8 million EVs were sold, 65 percent of which were in China and 20 percent in Europe. Consumers in these regions have benefited from government incentives and expanded product offerings from automakers, the report said.
First published date: April 12, 2023 at 12:30pm CST
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