EVolution in India: What lies ahead for the electric vehicle market?

India's EV market has seen significant growth in recent years. What does the future hold for this dynamic sector? Let's take a look.
Tejasri Gururaj
EV Charging station
EV Charging station

Blue Planet Studio/iStock   

As we continue to combat climate change, electric vehicles (EVs) are becoming one of the increasingly popular choices to help cut down on carbon emissions. The EV market in India is also gaining momentum as the country looks to reduce its dependence on fossil fuels and combat air pollution. The Indian government has set an ambitious target of electrically powering 30% of personal cars, 70% of commercial vehicles, and 80% of two- and three-wheelers electricity by 2030. 

The government has taken several initiatives to achieve these goals, such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) scheme, which offers subsidies and incentives to promote EV adoption in India. But it is not just the government sector taking initiatives; the corporate sector is also taking steps to increase EV penetration in India. A number of businesses, like Mahindra & Mahindra and Tata Motors, have invested in EV technology and research in an effort to encourage the usage of EVs. 

Several smaller local players, such as Ola Electric and Ather Energy, are also making significant strides in promoting the use of EVs in India. As a result of the contributions from the government and corporate sectors, the Indian EV market has shown significant growth, with the sales of EVs expected to reach 17 million units by 2030.

Here we take a look at the past, present, and future of the EV market in India and the players making an impact on this EV market. With an increasing demand for EVs and a supportive government and corporate environment, the future of the EV market in India looks promising.

The rise of the local players: Ola and Ather 

EVolution in India: What lies ahead for the electric vehicle market?
Ola's 2-wheeler EV manufacturing plant in Tamil Nadu

India's EV market is not only attracting multinational giants like Tesla and Hyundai but is also giving rise to local players who are making significant strides in promoting the sale and use of EVs in the country. Speaking to IE, Aswanth Krishnan, Vice President of Technology at QpiVolta Technologies, states that the exponential growth of the 2-wheeler segment of the EV market in India has been led by local players who have emerged as strong contenders in this market.

Ola Electric Mobility, a subsidiary of ride-hailing giant Ola, is headquartered in Bengaluru. In 2021, it unveiled the Ola S1 and S1 Pro, two electric scooters that have garnered significant attention due to their competitive pricing and impressive features. The company has also announced plans to build the world's largest two-wheeler manufacturing plant in Tamil Nadu.

Ather Energy is another Bengaluru-based start-up developing electric scooters since 2013. In 2021, the company launched the Ather 450X, which boasts a range of 65 miles (105 km) and a top speed of 56 ml/h (90 km/h). They have also set up charging infrastructure in Bengaluru, Chennai, and Pune, with plans to expand to other cities.

"Established players like Hero, TVS motors, Tata, KIA, and Hyundai are entering a market dominated by Ola and Ather in the 2 and 4-wheeler segment. Interestingly though, urban mobility companies are also making an impact. Companies like Yulu, Bounce, and BluSmart are operating EV fleets, which have met with good reception," continues Krishnan.

EVolution in India: What lies ahead for the electric vehicle market?
Ather 450x is a 2 wheeler EV for the premium market

The rise of local players seems to be making an impact on the EV market. This might be due to several reasons. The most important is their knowledge of the local market, which enables them to design and develop the most suitable EV products. They also have a better understanding of the regulatory environment and government incentives, which allows them to offer more competitive prices to the consumer and gain a larger market share.

Initiatives to increase EV penetration in India 

"The current EV penetration in India is 3%, and the importance of government initiatives for increasing EV adoption cannot be overstated. Incentives and national programs are also critical for giving that initial push to this technology and increasing market awareness," says Krishnan.

The second phase (II) of the FAME scheme includes a 3-year subsidy program offering incentives for the adoption of EVs, including supporting the electrification of public and shared transportation and support for the development of charging infrastructure. National Electric Mobility Mission Plan (NEMMP) is another initiative set up by the government to promote EV adoption by providing tax benefits, subsidies, and infrastructure support. Under this plan, the government is promoting the development of charging infrastructure and the use of EVs in public transportation systems, such as buses. It also sets out an ambitious target to achieve 6-7 million sales of hybrid and electric vehicles year-on-year from 2020 onwards.

Many Indian corporations have also invested in developing EV technology. For instance, Tata Motors launched the Nexon EV, one of India's first electric SUVs, in 2020. Mahindra & Mahindra have also launched new models, such as the e-Verito and e-KUV100. 

Additionally, some companies are taking steps to promote EV infrastructure in India. In 2019, Reliance Industries and BP announced plans to set up a nationwide network of EV charging stations, partnering with BluSmart. 

EVolution in India: What lies ahead for the electric vehicle market?
Electric bus in Hyderabad, India

While these have contributed to significant growth for the EV market in India, Krishnan thinks price is still a major bottleneck for mass market adoption of EVs in India. "India is a very price-sensitive market, and EV products need to be priced competitively with their petrol and diesel counterparts," he says. 

For instance, the Nexon EV, e-Verito, and e-KUV100 are relatively expensive compared to their petrol/diesel counterparts. The Nexon EV has a starting price of around INR 15 lakh (~ USD 20,000), while its diesel version starts at around INR 7.5 lakhs (~USD 10,000). This is also true for the Mahindra e-Verito and e-KUV100, which are INR 2.5 lakhs (~ USD 3,000) more than their petrol/diesel counterparts. 

According to Krishnan, a lack of local supply chains is a huge challenge for pricing. "We have a huge reliance on countries like China for critical components like batteries and power trains. The government and companies should heavily invest in setting up local manufacturing capabilities of these technologies. This is now being seen in the form of Production Linked Incentive (PLI) schemes from the government and many startups developing EV batteries," Krishnan adds.

Role of research in pushing the EV agenda in India 

"R&D is key for EVs. Countries and companies that have invested in R&D for EVs earlier on, like China, have greatly benefitted in gaining first mover advantage in this technology and become market leaders," says Krishnan.

EVolution in India: What lies ahead for the electric vehicle market?
QpiVolta is working on the development of solid state batteries for EVs

Battery technology is a crucial aspect of EVs as developing local production can help to reduce the cost of EVs and make them more accessible to greater numbers of people. Several companies in India are developing more efficient and longer-lasting batteries for EVs. Among them are Tata Chemicals, Amara Raja Batteries, and Exide Industries. Additionally, startups like ION Energy, Grinntech, and Log 9 Materials are working on innovative EV battery technologies, including fast-charging batteries, solid-state batteries, and graphene-based batteries.

Krishnan's company QpiVolta recently developed a solid-state lithium metal battery of its own. Regarding the importance of EV battery development, Krishnan says, "The supply chain, talent pool, and technology pool is heavily nationalized and controlled right now because of its strategic importance. So, local R&D needs to develop technologies tailored to the Indian market, which is what QpiVolta is trying to achieve. We have developed a high energy density battery which can be used with existing mass production lines with minimal modifications."

Another area of research is in the development of charging infrastructure. Researchers and engineers are exploring new and innovative ways to develop charging infrastructure, including the use of solar energy and wireless charging technologies. Many companies, like Tata Power, ABB, and Delta Electronics, have heavily invested in developing charging stations across the country. However, more innovative research is coming from the academic sector. 

This includes the development of a dynamic EV charging prototype by researchers at IIT (ISM) and the use of solar energy for charging stations. There is a large amount of research coming from institutions, and some companies have partnered with academic institutions to promote EV research. However, the number of partnerships is still low, and there is a need for more.


"India is well poised to be one of the biggest if not the biggest EV market in the world. In the short term, there will be rapid EV adoption in tier 1 cities and then slowly into tier 2 and tier 3 cities," says Krishnan.

The EV market is already seeing a pick up despite the COVID-10 pandemic, with the sales of EVs having increased by 20% in 2020. Additionally, the government's push for the adoption of EVs has also led to a change in consumer behavior, with more people now opting for EVs over petrol/diesel vehicles.

The next 5-10 years are crucial for India, and Krishnan thinks China stands as a role model in the development and adoption of EVs. "They have had a strategic view on this technology very early on, secured supply chains in key materials, invested heavily in R&D, supported companies for large scale manufacturing, and incentivized individuals in technology adoption till it reaches price competitiveness. India should follow these key steps for successful EV adoption," he concludes.

The future of the EV market in India is exciting and is sure to make an impact on the global EV market.

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