India Electric Vehicle (EV) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Indian Electric Vehicle (EV) Market is Segmented by Vehicle Type (Passenger Cars, Commercial Vehicles, Two- and Three-wheelers) and Power Source Type (Battery Electric Vehicle, Plug-in Electric Vehicle, and Hybrid Electric Vehicle). The report offers market size and forecast for India Electric Vehicle in value (USD billion) for all the above segments.

Market Snapshot

Indian Electric Vehicle Market Overview
Study Period: 2018 - 2026
Base Year: 2020
CAGR: >44 %

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Market Overview

The Indian Electric Vehicle Market was valued at USD 5 billion in 2020, and it is expected to reach USD 47 billion by 2026, registering a CAGR of above 44% during the forecast period (2021-2026).

The Indian Electric Vehicle Market has been impacted by the outbreak of the COVID-19 pandemic due to supply chain disruptions and halt of manufacturing units due to continuous lockdowns and travel restrictions across the county. However, the electric vehicle (EV) market is still in its nascent stage in India. It is expected to grow at a much faster rate during the forecast period due to various government initiatives and policies.

E-commerce companies (Amazon, for example) are launching initiatives to use e-Mobility for last-mile deliveries to reduce carbon footprint. India is experimenting with e-Mobility for public transport, and the country has deployed electric inter-city buses across some major cities. In addition, state governments are also playing an active role in the deployment of policies encouraging the usage of EVs. For instance,

  • Kerala aims to put one million EV units on the road by 2022 and 6,000 e-buses in public transport by 2025.
  • Telangana aims to have EV sales targets for 2025 to achieve 80% 2- and 3-wheelers (motorcycles, scooters, auto-rickshaws), 70% commercial cars (ride-hailing companies, such as Ola and Uber), 40% buses, 30% private cars, and 15% electrification of all vehicles.

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. Moreover, India offers the world’s largest untapped market, especially in the electric two-wheeler segment. As 100% foreign direct investment is allowed in this sector, the automatic route market is expected to gain momentum during the forecast period.

Scope of the Report

An electric vehicle is one that operates on an electric motor instead of an internal combustion engine, which generates power by burning a mix of fuel and gases. Therefore, an electric vehicle is seen as a possible replacement for the current-generation automobile in the near future to address environmental challenges. The report covers the latest trends and technologies followed by the COVID-19 impact on the market.

The Indian Electric Vehicle Market is segmented by Vehicle Type and Power Source. 

By Vehicle Type, the market is segmented into Passenger Cars, Commercial Vehicles, and Two- and Three-wheelers. 

By Power Source Type, the market is segmented into Battery Electric Vehicle, Plug-in Electric Vehicle, and Hybrid Electric Vehicle. 

By Vehicle Type
Passenger Cars
Commercial Vehicles
Two- and Three-wheelers
By Power Source Type
Battery Electric Vehicle
Plug-in Hybrid Electric Vehicle
Hybrid Electric Vehicle

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Key Market Trends

Growing Adoption of Electric Buses During the Forecast Period

India is the second most populated country in the world after China, and just like China, which has the largest electric bus fleet in the world. India is also pushing hard for the electrification of buses. Many state governments have already started procuring electric buses from Chinese and local electric bus manufacturers.

With the growing need for controlling GHG (Greenhouse gases) emissions emitted by vehicles, the government is encouraging the use of electric-powered vehicles across various states, boosting the demand for electric buses in India. The market is driven by factors such as the increase in domestic manufacturing, rapid urbanization, and a rise in environmental awareness. For instance,

  • In February 2020, the Union Transport minister inaugurated India's first inter-city electric bus service. These buses were manufactured by Mitra Mobility Solution, with a range of 300 km on a full charge.

Many local bus manufacturers who are in collaboration with some Chinese manufacturers are trying to cater to the rising demand for electric buses in India. For instance,

  • In 2019, Foton PMI was planning to invest around INR 500 crore in a joint venture with Beiqi Foton Motor Co. of China to manufacture electric buses in India. The company has already given five electric buses to one of the airlines for internal operations.
India Electric Vehicle Market Key Trends

Electric Two-wheeler Vehicles Likely to have Optimistic Growth

With transportation still being a challenge in India, a lot of people in these segments look forward to the two-wheeler industry in India. As a result of the surging pollution, the national government has launched stringent policies to curb vehicular emissions. In particular, the jump from Bharat Stage V (BSV) to BSVI emission standards is expected to benefit the Indian electric scooter and motorcycle market, by raising the prices of petrol-driven two-wheelers by 7­–15%. From 1st April 2020 onward, automakers are only allowed to sell BSVI-compliant vehicles in the nation, driving the push toward electric variants.

For extracting the maximum revenue from the rapidly growing Indian electric scooter and motorcycle market, original equipment manufacturers (OEMs) are expanding their facilities. For instance,

  • In January 2020, Ather Energy Pvt Ltd announced intentions to build a 400,000-sq-ft factory in Hosur, Tamil Nadu, which would have an annual output of 1 lakh units. Currently, the company operates one manufacturing plant in Bengaluru, which has a capacity of 25,000 units. The idea of the company behind an additional facility is meeting the rising demand for electric two-wheelers in India.
  • In the same vein, Okinawa AutoTech Pvt Ltd invested USD 28.4 million (INR 200 crore) for its second manufacturing plant in May 2019. To be developed for electric two-wheeler vehicles in Rajasthan and planned to be commissioned in early 2020–21, the manufacturing plant will have an annual output of 10 lakh units.

Furthermore, the availability of a considerable number of electric two-wheeler models, their low cost, as well as their availability as a substitute for conventional fuel-based vehicles. These aforementioned factors are fueling the demand in the Indian electric vehicle market.

Indian Electric Vehicle Market  Growth Rate By Region

Competitive Landscape

The Indian EV market is consolidated with the presence of major players in the market, owing to cheap and readily available manpower. However, established players in the market are introducing new models to gain a competitive edge over other players. For instance,

  • In January 2020, Morris Garages Motor India launched the d ZS EV, the first electric internet SUV in India, and the car has a driving range of 340 km on a full charge. The ZS EV vehicle has been awarded five stars at the Euro NCAP crash tests.
  • In 2019, Tata Motors announced its electric vehicle technology ZIPTRON, which will power all future Tata electric cars. This technology consists of a highly efficient permanent magnet AC motor, providing excellent performance on demand. It will also offer a dust and waterproof battery system, which meets the IP67 standards.

The startups are expanding their presence by raising funds from investors and tapping into new and unexplored cities. Companies are investing a tremendous amount in R&D and launching new models to mark their presence in the market.

Recent Developments

  • In August 2021, Tata Motors has expanded its EV portfolio by unveiling the new Tata Tigor EV. The new Tigor EV gets a host of design updates and Ziptron technology and ensures better performance compared to the outgoing model.
  • In July 2021, Olectra Greentech announced that along with its sister company Evey Trans Pvt Ltd, it has won the bid for 100 electric buses. The consortium of both the companies has won the bid to supply 100 electric buses to a State Transport Corporation (STC) in the country under the Government of India’s FAME-II scheme, on OPEX model basis for 12 years. These 100 electric buses are going to be used for inter-city operations.
  • In February 2021, Ather Energy, India’s first intelligence EV manufacturer, moved its USD 86.5 million factory from Bengaluru (Karnataka) to Hosur (Tamil Nadu) to increase its two-wheeler production capacity.
  • In February 2020, JBM Auto launched two electric buses Eco-Life e9 and e12 electric buses at the Auto Expo 2020. Powered by fast-charging lithium batteries, buses can run 125-150 km in a single charge, depending on the city’s traffic conditions.
  • In January 2020, the Department of Heavy Industries (DHI) of India approved 2,636 electric vehicle charging stations in 62 cities across 24 Indian states and union territories (UTs) under the second phase of the FAME program to promote e-mobility.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.3.1 Bargaining power of Suppliers

      2. 4.3.2 Bargaining Power of Consumers

      3. 4.3.3 Threat of New Entrants

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Vehicle Type

      1. 5.1.1 Passenger Cars

      2. 5.1.2 Commercial Vehicles

      3. 5.1.3 Two- and Three-wheelers

    2. 5.2 By Power Source Type

      1. 5.2.1 Battery Electric Vehicle

      2. 5.2.2 Plug-in Hybrid Electric Vehicle

      3. 5.2.3 Hybrid Electric Vehicle

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles *

      1. 6.2.1 Tata Motors

      2. 6.2.2 Bajaj Auto Corp.

      3. 6.2.3 Mahindra & Mahindra Limited

      4. 6.2.4 MG Motor India

      5. 6.2.5 Hyundai Motor India

      6. 6.2.6 Olectra Greentech Ltd

      7. 6.2.7 JBM Auto Limited

      8. 6.2.8 Hero Electric

      9. 6.2.9 Ampere

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability

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Frequently Asked Questions

The India Electric Vehicle (EV) Market market is studied from 2018 - 2026.

The India Electric Vehicle (EV) Market is growing at a CAGR of >44% over the next 5 years.

The India Electric Vehicle (EV) Market is valued at 5 Billion USD in 2018.

The India Electric Vehicle (EV) Market is valued at 47 Billion USD in 2026.

Tata Motors Limited, Mahindra & Mahindra Limited, MG Motor India, Olectra Greentech Ltd, JBM Auto Limited are the major companies operating in India Electric Vehicle (EV) Market.

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