India Electric Vehicle Market 2021-2026

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    INDIA ELECTRIC VEHICLE MARKET

     

    KEY FINDINGS

    1. In FY 2021, EV sales in India were at 2,38,120 registered units
    2. The majority of the registrations were from electric two-wheelers followed by three-wheelers and cars
    3. Tier 1 and 2 cities will lead the way for electrified vehicles across India and this will be on the backs of the development of charging stations in these areas
    4. The main reason for sales of electrified vehicles will be running costs as petrol prices increase across the country
    5. State-wise EV subsidies, as well as central EV subsidies, will also play a huge role in EV penetration
    6. Electric vehicles will also face competition from other alternate fuel-powered vehicles such as CNG
    7. EV sales registered in July 2021 reported a MoM increase of 134.8% at 26,127 units driven by the increase in Electric 2-Wheeler registrations followed by FAME-II notification which increased the incentives on EVs
    8. The overall high-speed electric two-wheeler (HS-E2W) sales stood at 13,345 units in July 2021, reported an increase of 229% MoM over the previous month, and a YoY leap in registrations of 835.83%
    9. Maruti Suzuki’s parent company, Suzuki Motor Corp will enter the EV market by 2025, starting with the India market.

     

     

    INTRODUCTION

    India is an important market in Asia with ~16 million vehicles sold annually, 12.5 being two-wheelers (largest 2 wheeler market in the world). The average price of the vehicle sold is also lower compared to China, USA and Europe.

     

    Among the passenger cars, mid and entry-level hatchbacks dominate the market while among 2 wheelers 75% of the market is below 150 cc.

     

    3-wheelers also hold an important role in the Indian market mainly for commercial purposes. It is a common mode of transport for last-mile connectivity as well as holds an important role in door to door transportation in both rural and urban settings

     

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    INDIA ELECTRIC VEHICLE MARKET DYNAMICS

    In the electric car segment, Tata Motors sold a total of 650 units of the Nexon EV in July 2021, which is the highest monthly sales figure achieved by any vehicle holding a market share of 71%. Tata Motors sold over 4,500 units of the Nexon EV since its launch in January 2020. 

     

    MG Motor India managed to sell a total of 250 units of the ZS EV in July 2021 as compared to 102 units sold in the previous month with an increase of 145.1% on YoY. 

     

    Tata’s Tigor and Hyundai’s Kona sales were handful and very minimal impact on overall sales of EVs in India

     

    In the electric two-wheeler segment, a total of 29,288 units were sold in the first six months of 2021 with 5.97% increase in YoY where 25,598 units sold in 2020. 

     

    Hero Electric remains India’s no.1 manufacturer in this segment and saw its retails increase significantly Year-over-Year from 399 units retalied in July 2020 to 4,218 units in July 2021.

     

    Okinawa reported an increase of 81.76% in July 2021 with 3,826 units.

     

    Piaggio has reported an increased retail sales in July 2021 with 3,826 units.

     

    Ather Energy retailers increased from 144 units in July 2020 to 1,799 units in July 2021.

     

    Similarly, Pure Energy also reported a significant YoY increase in retail sales from 24 units in July 2020 to 1,317 units sold in July 2021.

     

    Of the 238,000 registered electric vehicles sold in India in 2020

    • 103,000 units were low speed electric scooters (top speed <25 kmph)
    • 41,000 units were high speed electric scooters
    • 88,000 were three wheelers
    • 5,900 were cars

    The number of unregistered electric three wheelers is estimated to be at 59,000 units

     

    Hero electric held the pole position for electric two wheelers across the country while Tata held the pole position for electric cars in the country.

     

    There currently exists a FAME-2 subsidy for all-electric vehicles except buses where Rs 15,000 per kWh of the battery is subsidized up to 40% of the overall vehicle price. States have also implemented subsidies for electric vehicles as well as budgets for infrastructure development

     

    STATE SUBSIDY AND INFRASTRUCTURE FOR ELECTRIC VEHICLES

    Maharashtra unveiled its new policy which came into effect on 13th July 2021 and will be valid till 31st March 2025. Maharashtra aims to accelerate the adoption of BEVs in the state so that they contribute to 10% of new vehicle registrations by 2025. The demand-side incentive structure and target under Maharashtra’s new EV policy was 10% of two-wheelers, 20% of three-wheelers and 5% of four-wheelers by 2025. Buyers purchasing EVs before 31 December 2021 will be eligible for ‘Early Bird discount’ of INR 5000/kWh of vehicle battery capacity. Along with these, this policy lays out incentives for setting up charging stations, supply-side incentives to attract manufacturing in the state,and the launch of the Zero Emission Vehicle credit  programme.

     

    Rajasthan Government issued a notification on 16 July 2021, regarding the state’s EV Policy to encourage EV adoption. As per the notification, a provision is made to reimburse the SGST (State Goods and Service Tax) amount and give a one-time grant to EV buyers. Recharge of the SGST amount is payable on all types of EVs.

     

    Charging stations have been allocated for states across the country with Rs. 10,000 Crore for a period of 3 years commencing from 1st April 2019 under the FAME scheme

     

    • 317 in Maharashtra
    • 266 in Andhra Pradesh
    • 256 in Tamil Nadu
    • 228 in Gujarat
    • 205 in Rajasthan
    • 207 in Uttar Pradesh
    • 172 in Karnataka
    • 159 in Madhya Pradesh
    • 141 in West Bengal
    • 138 in Telangana
    • 131 in Kerala
    • 72 in Delhi
    • 70 in Chandigarh
    • 50 in Haryana
    • 40 in Meghalaya
    • 37 in Bihar
    • 29 in Sikkim
    • 25 in Jammu &Kashmir
    • 25 in Chhattisgarh
    • 20 in Assam
    • 18 in Odisha
    • 10 in Uttarakhand
    • 10 in Puducherry
    • 10 in Himachal Pradesh

     

    The FAME scheme aims to generate demand by way of supporting 7000 e-Buses, 5 lakh e-3 Wheelers, 55000 e-4 Wheeler Passenger Cars (including Strong Hybrid) and 10 lakh e-2 Wheelers

     

    Delhi, Maharashtra, Andhra Pradesh, Bihar, Chandigarh, Haryana, Karnataka, Kerala, Madhya Pradesh, Odisha, Meghalaya Punjab, Tamil Nadu, Telangana, Uttar Pradesh, Gujarat and Uttarakhand are states who have rolled out subsidies for electric vehicles as well as announced plans to electrify vehicles

     

    They are along the lines of decreasing overall vehicle price, improving charging infrastructure as well as increasing government fleet and public fleet to electric vehicles

     

    Gujarat announced a policy to further subsidize EVs over the FAME scheme. It includes an incentive of Rs 10,000 per kWh for electric vehicles. Two wheelers get a maximum of Rs 1.5 lakh, three wheelers Rs 5 lakh and four wheelers Rs 15 lakh. The goal is to target 2,00,000 EVs of which 1,10,000 will bee-two-wheelers, 70,000 e-three-wheelers and 20,000 e-four-wheelers.

     

     

                    

    INDIA ELECTRIC VEHICLE MARKET SEGMENTATION

     

     

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    INDIA ELECTRIC VEHICLE MARKET SIZE AND FORECAST

    India’s electric vehicle market is estimated at $xx Billion in 2020. The Indian EV battery market alone is estimated at $XX Billion.

     

    In 2020, Hero electric, Okinawa, Ampere and Ather held the market for EV two wheeler sales. For Passenger cars, Tata, Mahindra, and MG were the largest players.

     

    The three-wheeler market involved a large segment of unorganized players as well as the introduction of organized players such as Mahindra, Piaggio etc.

     

    COVID IMPACT ON INDIA ELECTRIC VEHICLE MARKET

    COVID-19 severely affected the automotive industry, and the disruption of production and shutdown of plants due to multiple phases of lockdown imposed by the government had its impact on demand for electric cars, electric two-wheelers and electric three-wheelers. The supply of lithium-ion battery packs got impacted due to COVID-19 pandemic. This was followed by a clampdown by the government on shipments coming from China as India depends on China, which has a monopoly in lithium-ion cells, for making battery packs. The lack of interest shown by banks to finance electric vehicles also impacted the Indian EV market. However,the economic slowdown is impacting the environment, also creating new challenges for India’s clean energy transition including supply chain shortages,liquidity, financing constraints, job losses and reduced workforce. The concerns regarding the negative effect of climate change, along with the growing carbon emission in major cities have created a significant demand for electric vehicles in India.

     

    E-commerce companies such as Amazon launched e-Mobility for last-mile deliveries to reduce carbon footprint. India is already experimenting with e-Mobility for public transport, and the country has deployed electric intercity buses across some major cities. The EV market in India has gained significant momentum after the implementation of the FAME India scheme with its aim of shifting toward e-mobility in the wake of growing international policy commitments and environmental challenges. This will contribute to higher revenue collection through GST, export duties and will propel employment and economic progress of the country. With this opportunity, the government of India, OEMs and car makers should create an ecosystem to make India a manufacturing hub of EVs. To achieve this, India had pioneers in the lead acid batteries space like Exide Industries, Amara Raja Batteries, etc.,who can contribute to the plans of making and exporting EV components like Li-ion batteries in India will increase the growth of EV market.

     

     

    RECENT TREND IN THE INDIA ELECTRIC VEHICLE MARKET

    Maruti Suzuki’s parent company, Suzuki Motor Corp will enter the EV market by 2025, starting with the India market. They planned to launch an all-electric model, which will be an iteration of the Celerio which will cost around INR 10-11 lakh. The company also planned to invest INR 18,000 crore for a new production facility in Haryana.

     

    Convergence Energy Services Ltd (CESL) has signed an agreement with Hindustan Petroleum Corporation Ltd (HPCL) for setting up charging infrastructure in several cities across the country like Mumbai, Delhi, NCR, Bengaluru, Hyderabad, Chennai, Kolkata and Pune – August 2021

     

    Ola Electric raised $100 million in long term debt from Bank of Baroda for setting up a 500-acre factory in Tamilnadu’s Krishnagiri, aimed to make 10 million vehicles a year at full capacity – July 2021

     

    MG Motor India and Fortum Charge & Drive have set up a 50kW Superfast public EV charging station in Pune. This smart chargers can be accessed by anyone who has an EV car compatible with the CCS2 (Combined Charging System), by registering on Fortum’s mobile app – July 2021

     

    Mahindra Electric partnered with Magenta EV deployed 100 units of Mahindra’s E3W, Treo Zor in Bengaluru for last-mile delivery of essential and non-essential items – June 2021  

     

    Anand Group had a joint venture with Mando Corporation to manufacture and supply motor and controller for the two and three-wheeler electric vehicle market-June 2021

     

    Magenta EV has set up India’s largest public EV charging station in Navi Mumbai. This public charging station will be functional 24*7 with 21 AC/DC chargers for electric vehicles. These chargers are powered with combined 40 KW rooftop solar power and can be operated through the ChargeGrid App with online remote monitoring including an automated payment gateway – June 2021

     

     

    INDIA ELECTRIC VEHICLE MARKET COMPETITIVE LANDSCAPE

    EV sales registered in July 2021 reported a MoM increase of 134.8% at 26,127 units driven by the increase in Electric 2-Wheeler registrations followed by FAME-II notification which increased the incentives on EVs, further bringing down their prices. Among all the states and Union territories, Uttar Pradesh continues to have maximum monthly registered EV sales with 17% of overall sales in India, July 2021. Karnataka has the second highest sales at 15% share followed by Tamilnadu share of 12% and Maharashtra share of 10%.

     

    The overall high-speed electric two-wheeler (HS-E2W) sales stood at 13,345 units in July 2021, reported an increase of 229% MoM over the previous month, and a YoY leap in registrations of 835.83%. The sales of electric three-wheeler (both passenger and cargo-type) in July 2021 stood at 10,873 units, increasing MoM ny 89%.This increase was driven by passenger type EV, which is increased by 93.89% over last month, while the share of overall sales of cargo type EV fell to 10%. The cumulative sales of electric four-wheelers in July 2021 stood at 967 units, with a MoM increase of 66% and YoY increase of 173.16%.Tata Motors continued its dominance in this segment but its share dropped from 76% from last month to 66% in July 2021. MG Motors, on the other hand increased its share from 20% to 29% in the same period.

     

    Among the electric two wheelers in India, there are 32 brands with more than 100 models in the market. By 2026, there will be a substantial decrease in the number of players as those who can not compete will lose their position. In 2020, only 11 players managed sales above 3 digits in the market.

     

    Among the passenger cars, Tata, MG, Hyundai and Mahindra are the current players in the market. Since the market is very price sensitive, subsidies will drive it and urban areas will be the target markets. Maruti as well as Renault have spoken about possible electric vehicles to hit the market over the next 2 years. The market will be dominated by fleet usage mainly taxis and fleets with fixed path operations as running costs will be much lower than an ICE fleet and the capital invested can be returned over the course of 3-4 years.

     

     

    INDIA ELECTRIC VEHICLE MARKET COMPANY PROFILES

     

    ELECTRIC CAR MANUFACTURERS

    1. MG
    2. Mahindra
    3. Tata
    4. Hyundai
    5. Maruti Suzuki

     

    ELECTRIC TWO WHEELER MANUFACTURERS

    1. Hero electric
    2. Okinawa
    3. Ampere
    4. Ather
    5. Baja

     

    THIS INDIA ELECTRIC VEHICLE MARKET REPORT WILL ANSWER FOLLOWING QUESTIONS

    1. India Electric Vehicle Market size and Forecast, by region, by application
    2. Average B-2-B price for India Electric Vehicle Market, by region, per user
    3. Technology trends and related opportunity for new India Electric Vehicle Market tech suppliers
    4. India Electric Vehicle Market share of leading vendors, by region,
    5.  Coronavirus impact on India Electric Vehicle Market earnings
    Sl no Topic
    1 Market Segmentation
    2 Scope of the report
    3 Abbreviations
    4 Research Methodology
    5 Executive Summary
    6 Introduction
    7 Insights from Industry stakeholders
    8 Cost breakdown of Product by sub-components and average profit margin
    9 Disruptive innovation in the Industry
    10 Technology trends in the Industry
    11 Consumer trends in the industry
    12 Recent Production Milestones
    13 Component Manufacturing in US, EU and China
    14 COVID-19 impact on overall market
    15 COVID-19 impact on Production of components
    16 COVID-19 impact on Point of sale
    17 Market Segmentation, Dynamics and Forecast by Geography, 2021-2026
    18 Market Segmentation, Dynamics and Forecast by Product Type, 2021-2026
    19 Market Segmentation, Dynamics and Forecast by Application, 2021-2026
    20 Market Segmentation, Dynamics and Forecast by End use, 2021-2026
    21 Product installation rate by OEM, 2021
    22 Incline/Decline in Average B-2-B selling price in past 5 years
    23 Competition from substitute products
    24 Gross margin and average profitability of suppliers
    25 New product development in past 12 months
    26 M&A in past 12 months
    27 Growth strategy of leading players
    28 Market share of vendors, 2021
    29 Company Profiles
    30 Unmet needs and opportunity for new suppliers
    31 Conclusion
    32 Appendix

     

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