Charging points for electric vehicles from Tata Power can be found on 350 of India’s 600 highways.
Puneet Vikram Singh, Nature and Concept Photographer, | Even | Getty Images
When most people think of electric vehicles, they think of cars.
From brands like Tesla and Rivian in the United States, to Nio and XPeng in China, global sales of electric vehicles have risen sharply. Two million EVs were sold in the first quarter of 2022 alone — that’s a significant jump from a decade ago, when just 120,000 cars were sold worldwide, the International Energy Agency reported.
India is different. The United States and China have focused on EV car adoption. But in India, two-wheeled vehicles such as scooters, mopeds and motorcycles dominate the market.
James Hong, head of mobility research at Macquarie Group, said two-wheeled vehicles are in higher demand than cars in India, which should come as no surprise.
Underdeveloped road infrastructure and lower personal incomes make it more convenient and affordable for people to own scooters, motorcycles or mopeds rather than cars, Hong said.
Still, acceptance remains low.
EVs make up only about 2% of total car sales, but the Indian government has ambitious goals to increase EV adoption over the next decade, with a focus on increasing the purchase of two-wheeled vehicles.
Sales in India are expected to grow 40% to 45% by 2030, after which 13 million new vehicles will be sold annually, according to forecasts by Bain & Company released in December.
According to the consultancy, the four-wheel vehicle sector in India will grow by only 15% to 20% by 2030, with 1 million new vehicles sold annually.
According to Arun Agarwal, deputy vice president of equity research at Kotak Securities, the growth of the four-wheel electric vehicle segment in India is expected to be smaller as the cars are mostly owned only by drivers who leave the city on longer routes.
Bain & Co. predicts total revenue across the entire supply chain of the Indian EV industry to generate $76 billion to $100 billion by 2030.
Reduce costs to increase adoption
People in India have long preferred two wheels over four, and the country is home to more than 10 startups serving the market, Agarwal said.
In order for India to buy more two-wheeled vehicles, they need to be cheaper and there needs to be more charging infrastructure, Jinesh Gandhi, equity research analyst at Motilal Oswal Securities, told TBEN.
Gandhi said that 90% of two-wheeled vehicles with internal combustion engines cost between 70,000 rupees ($845) and 140,000 rupees ($1,690). The starting price of electric two-wheelers can reach 160,000 rupees.
The cost of electric cars will fall as battery prices fall, Kotak’s Agarwal said.
High inflation and disrupted supply chains will drive up batter prices in 2022, according to Bain & Co. Costs would have to drop by another 20% to 30% for EVs to compete with internal combustion engine vehicles.
Arun Kumar, chief financial officer of two-wheeled EV manufacturer Ola Electric, said it is a “myth” that electric cars are more expensive than internal combustion engine vehicles because the “lifecycle cost of ownership of an electric car is lower” than that of an electric car. two or four wheeler. wheeled vehicle that runs on fuel.
Ola Electric’s two-wheeled scooters and upcoming motorcycle and four-wheeled passenger cars all range between $1,000 and $50,000.
That means the amount of money EV owners can save on fuel and maintenance costs can offset the higher initial purchase price, he said.
Ola’s two-wheeled scooters, an upcoming motorcycle and four-wheeled passenger cars range between $1,000 and $50,000, he said.
“There is no going back [internal combustion engine] vehicles. It’s a single direction,” Kumar added.
India’s central and state governments have issued incentives to encourage consumers in India to switch to electric cars, Kotak’s Agarwal said.
Government programs have provided funding to ramp up production of public electric buses and taxis and expand charging stations across India, according to the International Energy Agency.
EV owners will also receive road tax exemption at the time of purchase and receive a deduction from their income tax, according to the Accelerated e-Mobility Revolution for India’s Transportation.
Including taxes, owners of two-wheeled internal combustion engine vehicles in India typically pay 3,000 rupees per month for their vehicle, Kumar said. Government initiatives combined with money saved on gasoline would therefore mean that a customer’s monthly installment would become largely free for a customer, he said.
As the adoption of electric vehicles will increase, so will charging infrastructures across the country. That remains a factor deterring people from making the switch from carbon-intensive vehicles, Kotak’s Agarwal said.
“If you get stuck on the road, you have no choice but to have the vehicle towed to the nearest charging station, which is both time consuming and costly,” said Gandhi.
India’s charging infrastructure will need to expand significantly to support the number of EV companies hitting the road, the Bain & Co. report said, noting that several companies have made early investments and are committed to increasing the availability of chargers.
Tata Power claimed it has built about 2,500 charging stations in 300 cities and towns in India.
One of them is tata power, India’s largest private power generation company.
Tata Power claimed it has built about 2,500 charging stations in 300 cities and towns in India. They can be found on 350 of the country’s 600 highways, said Virendra Goyal, the company’s head of business development.
Many EV owners suffer from “range anxiety” when the distance between charging stations is too great, and bridging the gap would encourage more drivers to switch to e-mobility, he said.
The company aims to have 25,000 chargers across India by 2028, Goyal said.