The Growth of EV Manufacturing In India
The Indian EV vehicle market, which was valued at US$2bn in 2023, is projected to increase to US$7.1bn by 2025, with the domestic market achieving 10 million annual sales by 2030.
Driving this development is two-wheelers which according to Bain & Co will make up 40-50% of all EVs sold in India by 2030. This EV investment hasn’t emerged out of nowhere - India has an existing foundation of investment in sustainable technology.
India's investment in sustainable manufacturing
India’s railway system for example is on track to achieve 100% electrification, becoming the world’s largest green network. This is far ahead of the European Union, the UK and the US, with the US at 1%, the UK at 38% and the EU at 56%.
The Indian government has committed to ambitious decarbonisation targets for 2030. These include attaining 500GW of renewable energy generation capacity, reducing carbon emissions in the energy sector by half and significantly boosting sales of electric vehicles.
Leading EV vehicle manufacturers in India include Tata Motors, Mahindra & Mahindra and BYD, who have all sought to expand their market offering in the country. Tata Motors is the most dominant player here, holding more than two-thirds of the country’s EV market.
What is driving EV manufacturing in India?
While India lags behind its neighbours in EV development, with Prime Minister Narendra Modi scrapping subsidies meant to boost the market, the area bears a lot of future promise. EV vehicles are highly affordable, with 69% of cars sold in India in 2022 priced below US$15,000, making them a desirable option. Indians are also motivated by the desire to be more sustainable, considering how deeply the country has been impacted by climate change.
In recent years the country has faced merciless heat waves that have caused death and serious drought.
The World Weather Attribution found that climate change made it 45 times more likely extreme temperatures would occur in India, with the country now having a 10% chance of being hit by an extreme heatwave in late spring.
For India to achieve the EV development laid out by the government and driven by manufacturers, the country must continue developing its EV charging network. Most public charging stations remain concentrated in major cities such as Mumbai and New Delhi, only supporting electric two and three-wheeler vehicles.
Increasing the EV charging network to rural regions of India will also create new opportunities to champion the benefits of EV vehicles, as technological innovation and advancement continues to permeate this manufacturing space.
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