30/09/2024
India’s passenger vehicle industry is poised to undergo significant changes by 2030, as it strives to become the world’s third-largest automotive market. A study predicts that the sector will witness sales of over 10 mn vehicles by 2030, with an adoption rate exceeding 30% across all vehicle categories.
The government expects electric vehicle (EV) sales penetration to reach 30% for private automobiles, 70% for commercial vehicles, and 80% for two and three-wheelers by 2030. In line with this, the Indian Government has announced comprehensive plans to make all new passenger car sales fully electric by 2030.
Despite the current small market share for Battery Electric Vehicles (BEVs) in India, electric passenger vehicles are projected to comprise 30% and 75% of new vehicle sales by 2030 and 2050, respectively. However, the adoption rate of EVs in India is currently low, accounting for only around 1.3% of total passenger vehicle sales.
One major challenge for the EV industry in India is the lack of charging infrastructure. To promote EV adoption, the government offers incentives such as subsidies, state-level support, and reduced Goods and Services Tax (GST) rates. For instance, there is a subsidy of Rs. 10,000 per kWh for electric four-wheelers, and some states provide additional incentives to electric car buyers.
Leading automotive companies in India are also embracing the shift towards electric mobility. Maruti Suzuki plans to launch six electric vehicles by 2030, with the first one expected to hit the market by 2025. Additionally, Maruti Suzuki aims to provide carbon-neutral internal combustion engine vehicles that use CNG, biogas, and ethanol-mixed fuels.
TATA Motors anticipates that half of its car sales will be electric by the end of the decade. The company has already announced a portfolio of 10 electric vehicle models to be launched by 2026.
Furthermore, Mahindra & Mahindra plans to invest over Rs. 3000 crore in the electric vehicle space and introduce 16 new electric vehicles by 2028. They have recently launched the Mahindra XUV400 EV.
In 2022, Indian automobile manufacturers achieved their highest-ever annual passenger car sales (3.8 mn units), surpassing previous records (3.34 mn units in 2018). The market size of the Indian passenger car industry was valued at US$ 32.70 billion in 2021, and it is expected to reach US$ 54.84 billion by 2027, growing at a CAGR of over 9% between 2022 and 2027. India’s domestic EV market is expected to grow at a CAGR of 49% between 2022 and 2030.