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The Future is Electric! 30-35% of Yearly Vehicle Sales to Be EVs by FY30: Report

India’s EV market is rapidly expanding, with electric vehicles (EVs) expected to make up 30-35% of yearly vehicle sales by FY30, driven by strong incentives, investment, and technological advancements.

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India is charging ahead in the electric vehicle (EV) revolution, with EVs expected to account for 30-35% of annual vehicle sales by FY30, according to a report by SBI Capital Markets (SBICAPS). Despite this rapid growth, internal combustion engine (ICE) vehicles will continue to coexist with EVs, reflecting a hybrid future on Indian roads.

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From less than 1% penetration in 2019 to 7.4% in 2024, the rise of EVs in India highlights a significant shift in consumer preferences and government policies. Here's a closer look at what’s driving this transformation.

India’s Leapfrog Moment in EV Adoption

India's unique growth story is creating opportunities for EVs to become the first car for many. The country’s low vehicle ownership and rapid adoption of newer technologies, much like its leap from 3G to 4G, are propelling this trend.

By FY30, EVs are projected to make up 30-35% of annual sales. Batteries and electronic drive units, which constitute nearly 50% of an EV’s cost, remain key differentiators compared to ICE vehicles. India's PLI (Production-Linked Incentive) scheme for Advanced Chemistry Cells aims to strengthen local production, with backward integration expected to reduce battery outsourcing from 75% to 50% by FY30.

Investment in Battery Capacity and Charging Infrastructure

To meet the growing demand for EVs, India is gearing up for significant investments in battery production and charging infrastructure. By 2030, approximately Rs. 500-600 billion in capital expenditure is expected to deliver 100 GWh of EV battery capacity. Additionally, Rs. 200 billion will be invested to install 90,000 public charging stations, ensuring a robust EV ecosystem.

Incentives and Policies Driving EV Sales

India’s EV growth is fueled by incentives like 5% GST on EVs, lower road taxes, and subsidies under schemes such as FAME and PM E-DRIVE. Targeted programs like the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) focus on segments where EV penetration is still low.

While two-wheelers (2W) and three-wheelers (3W) dominate EV sales, the private car segment faces unique challenges, with buyers prioritizing performance, design, and safety over cost.

India’s EV journey is a mix of challenges and opportunities, but with global advancements and local efforts, the country is poised for a cleaner and greener future.

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