“The EV inflection point is here and now!” said Venkat Rajaraman, CEO, Cygni Energy, in his presentation at the Messe Frankfurt organised 2nd Annual E-Mobility India Forum at the end of last month.
The battery electric vehicle (BEV) market in India is clearly developing from the bottom up, with fast adoption by two-wheeler buyers (notwithstanding various fire incidents involving electric two-wheelers). The change in consumer attitude towards electrified two-wheelers is largely influenced by the incentives offered under the FAME II scheme.
However, the FAME II scheme is scheduled to expire on 31 March 2024. And it is unlikely that the government will extend the scheme for a second time – it was extended in June 2021 by two years. Therefore, we can expect some slowdown in electrified two-wheeler sales when there are no buyer incentives.
Still, the electric two-wheeler market will act as a springboard for the electrified Passenger Vehicle (PV) segment. The rationale is that, as buyers of electric two-wheelers move up the economic ladder, they will gravitate towards A- and B-segment PVs and will be more open to purchasing BEVs.
Not only that, but the electrified PV market may well get a fillip from the recently launched Tata Tiago BEV. Tata’s third BEV is its most affordable yet, with an introductory price of a little over US$10,000. More importantly, the entry-level Tiago BEV is just a mere US$800 more than the most expensive conventional Tiago variant. Furthermore, it is priced within range of many ICE equivalents in the market.
Considering the various plans from OEMs including Tata Motors, Mahindra & Mahindra, and Hyundai for India’s BEV space, we think India’s BEV PV market will make significant gains by the middle of this decade. From sales of just 4,600 units in 2020, we predict BEV PV volumes to rise to roughly 207,000 units by 2025. Plus, we foresee further growth thereafter and forecast BEV PV sales of about 590,000 units by 2030.
In percentage terms, BEV PV sales are projected to rise from 5.5% of total PV volume in 2025 to 13.5% in 2030.