Electric vehicle sales in India zoom

  • Articles
  • Apr 12,24
Backed by supportive government policy and low running costs, sales of electric vehicle (EV) grew across all segments in India in 2023, says Bloomberg New Economy Forum report.
Electric vehicle sales in India zoom

Sales of electric vehicle grew across all segments in India 2023, backed by a combination of factors including lower lifetime ownership costs, the availability of more models and purchase subsidies, according to a report of Bloomberg New Economy Forum (BloombergNEF). Efforts to improve the network of fast EV chargers are also expanding with state-owned fuel retailers at the forefront. The federal government has introduced a spate of policies that will help sustain sales and attract more investment to the sector.

Passenger EV sales gain ground off the back of more affordable models: India’s annual passenger EV sales, which include cars and multi-utility vehicles, nearly doubled to 96,000 in 2023. EVs now account for 2.3% of all passenger vehicle sales. Private demand for EVs in this segment remained strong, fueled by the popularity of compact electric SUVs, as well as the launch of low-cost models in the small segment such as Tata Motors’ Tiago EV and MG Motor’s Comet EV. Demand from shared mobility operators has held steady, driven by startups operating all-electric fleets and Uber’s target of inducting 25,000 EVs.

Figure 1: Share of EVs in India’s new vehicle sales, by segment

Source: Ministry of Road Transport and Highways, Society of Indian Automobile Manufacturers, Society of Manufacturers of Electric Vehicles, JATO Dynamics, BloombergNEF. Note: Includes sales estimates for electric two- and three-wheelers with top speeds of less than 25 km per hour. Two-wheeler, three-wheeler and bus sales include estimates for Telangana.

Electric two-wheeler sales held strong despite reduced subsidies: Annual two-wheeler sales in India grew by 13% in 2023 to nearly 18 million, BloombergNEF estimates. EVs were just under 6% of these sales, at over 1 million units. Electric models in the segment are benefitting from rising gasoline prices, more model launches and a favorable total cost of ownership compared with gasoline two-wheelers.

Delhi and Maharashtra lead in electric bus deployments: Electric bus demand continues to rely on government procurement. Delhi led the market in 2023, with 1,121 e-buses added – nearly three times the additions in the state a year ago and 42% of all e-buses deployed. This was followed by Maharashtra with 451 e-buses. The push from state governments remains the largest driver of EV adoption in this segment, supported by federal subsidies. 

Figure 2: Indian manufacturers’ shares of EV sales in 2023, by segment

Source: Ministry of Road Transport and Highways, Bloomberg, BloombergNEF. Note: Sales in Telangana are not included due to data unavailability. Two-wheeler sales do not include low-speed vehicles. Data as of January 18, 2024.

Maharashtra leads EV deployment across most vehicle segments: Among all Indian states, Maharashtra had the largest fleet of electric two-wheelers, passenger EVs and ebuses by the end of 2023. Karnataka followed, with the second-largest fleet of electric twowheelers and cars. Delhi is rapidly electrifying its municipal bus fleet and, as of 2023, the number of e-buses in the state was second only to Maharashtra. 

Charging infrastructure: India had nearly 17,000 public EV charging stations by March 2024. Assuming each station has two chargers, on average, a public charger can support eight electric cars. This number is likely higher because most of India’s public EV chargers that were installed prior to 2022 were based on the Bharat charging standards. None of the passenger EVs available today are compatible with these chargers.

Policy support continues to grow: Federal and state governments have announced several policies and regulations to boost EV adoption in India. These include demand-side subsidies for EV and charging equipment purchases, as well as supply-side support to incentivize local manufacturing. Delhi became the first state in India to mandate phase-out targets for fossilfuel vehicles in selected vehicle segments. More federal support for charging infrastructure is planned, with the details expected to be announced in July. E-buses could also see a boost amid the federal government’s announced payment security mechanism in partnership with the US.

Article courtesy: Bloomberg New Economy Forum, under the auspices of Bloomberg Finance LP

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