The market for Electric Vehicles (EVs) has found rich soil in India, not only due to the massive untapped demand in the Indian states themselves, but also because of the government’s aggressive attitude to promoting electric cars and phasing out conventional vehicles in the years to come. Take, for example, the Indian state of Maharashtra, which lowers the taxes paid by EV consumers, but has also started offering financial incentives to the likes of Uber and Amazon.com for buying EVs in bulk. The state minister, Aaditya Thackeray explains that “This not only benefits us in terms of cleaner air but also benefits them in terms of economies and their revenue models”. The minister also wants to create incentives to draw in EV imports from other countries. Indeed, Tesla recently set up its branch Tesla India Motors and Energy Ltd. at an address in Bengaluru.
When the pandemic wrought havoc within economies worldwide in 2020, the market for EVs did suffer. In fact, the global nature of the economic downturn seemed that it would especially pinch the EV industry because its battery technology relies on international sourcing. In addition, the purchase prices of EVs are often higher than those of petrol-powered vehicles, which was discouraging to those with sensitive bank balances. The statistics seem to show, though, that the EV market in India continued thriving throughout 2020, when new EV registrations climbed up by 109%. For those looking to invest in the price of top EV brands in the near future, let’s go over some of the key factors in the Indian EV market, as well as the challenges it might be facing this year.
Electrifying Public Transport
Back in February 2020, the first inter-city bus service powered by electricity saw its debut. The Indian government’s main EV focus since then has been to shift public transport vehicles over to electric power. Authorities have long noted the fact that Carbon Dioxide emissions from public transport in the country are too problematic to ignore. Many Indian cities have been finding that their air quality has grown increasingly poor in recent years, and automobiles seem to be at the heart of the matter. On top of that, some of the noisiest cities in the world can be found in India. Electric cars are quieter and leave the air much cleaner. Even in the case of EVs that run on electricity derived from burning fossil fuels, the air pollution ends up less than that of Internal Combustion Engines, and the sheer efficiency of the vehicle is much better. Other factors that may drive the market in India are the fast rate of urbanization and the high cost of importing fossil fuels from outside the country.
These are some of the reasons why the government of India has been doing its best to promote the manufacturing and purchasing of EVs. Carmakers and consumers have been offered subsidies and tax exemptions should they choose to say goodbye to gasoline. As far back as 2015, the government’s FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) program got underway to encourage Indians to buy electric. The biggest maker of electric buses in the country is Olectra Greentech, who boast their own huge electric bus making factory. Tata Motors established their own EV wing in December last year and, in the same month, Hyundai India opened up a richer battery-electric vehicle range. In terms of recent electric models, Audi released their e-tron SUV and e-tron Sportback in July 2021, and the following month Tata launched their new Tigor EV.
India needs to devote itself to developing the infrastructure needed to keep fleets of electric cars charged, because, at present, the country is feeling the lack. Another challenge is high vehicle costs, which are pushed up by imported Li-ion cells. Unlike China, India lacks lithium, and so must rely on imports. At the moment, the source of most of the nation’s electricity is burning coal, which, of course, is not ideal environmentally, so finding more plentiful renewable power sources will feature on the government’s agenda. Finally, when New Delhi made it a rule that a certain percentage of company fleets had to be electric, it was noted by some that this might make it difficult for some companies to find affordable long-distance vehicles.
At the End of the Day
For those intending to invest in the burgeoning EV industry in the form of CFDs, keep in touch with the blossoming EV market in India. Local and foreign electric carmakers are expected to be found budding all over the country in times to come. Many analysts believe that India is likely to soon grow into one of the leading world markets in electric vehicles.