India’s electric vehicle market glides into gear from standing start

India’s electric vehicle sector is gearing up from a solid start. Fueled by government subsidies, early sales of delivery vehicles and buses, and paranoia among companies and politicians against China’s tech dominance, a ‘Made in India’ EV industry is beginning to take shape.

Alongside semiconductors and renewable energy, the Narendra Modi government will provide incentives to EV producers and the advanced technologies that power EVs to stimulate manufacturing, reduce reliance on trying to attract investment.

“India is well-positioned to become a global manufacturing powerhouse and its journey has begun as companies around the world increasingly focus on the ‘China plus one’ strategy.” We are pushing forward with new automotive technology. “It may take some time, but the goal is to match China soon.”

At this month’s Auto Expo 2023, India’s leading biennial motor show, Tata Motors is one of the automakers to showcase EVs, of which around 45,000 to 50,000 will be sold this year. It has become the top seller of battery-powered vehicles in India.

Foreign brands are also targeting India, including China’s EV frontrunner, which said it aims to sell 15,000 vehicles this year and become India’s second-largest EV brand. Some BYD included.

The automaker, China’s largest battery-powered brand, which currently assembles vehicles from kits in Chennai, told the Financial Times it will expand its manufacturing base in India after 2025 if demand for the vehicles is justified. said it was possible.

Underscoring India’s growing importance to global automakers, preliminary data suggests that by 2022, it will likely become the world’s third-largest passenger car market after China and the United States, surpassing Japan with 3.72 million vehicles. sales, up 24% year-on-year. According to his consulting firm LMC Automotive:

“India’s battery electric vehicle market is currently in its infancy but is promising thanks to supportive government policies at central and state levels that provide incentives for both supply and demand sides.

Achieving zero-emission targets in European countries could also be an “opportunity to export small EVs from India,” he said.

However, industry insiders acknowledge that Indian automakers will have to work hard to catch up with China, much less their Asian rivals, as well as the United States and some European countries. There is no need for leadership in an area where India far exceeds in state subsidies to producers and buyers. plug-in car.

LMC expects battery electric vehicle passenger car sales in India to grow from around 5.5% of total sales in 2025 to 13.5% in 2030. 2030, it predicts.

eBuzz K6 electric bus in New Delhi
eBuzz K6 electric bus in New Delhi © Anushree Fadnavis/Hindustan Times via Getty Images

India has no domestic production of lithium batteries. Lithium batteries are the dominant technology in today’s electric vehicles and the most expensive component in them. Unlike China, we do not mine lithium.

“The Indian EV market is primarily an assembly market,” said Lohum, founder and CEO of Lohum, a company that recycles used car batteries and extracts raw materials to make cathode materials. Rajat Verma said. “70% of the value of the products he sells here in India are produced in China.”

India has so far provided over $2 billion in government incentives and more than $1 billion in subsidies aimed at accelerating EV adoption to companies investing in battery cell technology. , says Verma.

A Hyundai car on display in a showroom in New Delhi
Hyundai cars on display in a showroom in New Delhi © Anindito Mukherjee/Bloomberg

As in the rest of the world, in addition to doubts about EVs in India, a majority of automakers, suppliers and policy makers are skeptical that battery-powered vehicles or another technology will dominate the future market for low emissions. We are still hedging our bets on whether we will. car.

India’s Cabinet also recently approved a ‘National Green Hydrogen Mission’ which aims to make India a hub for hydrogen fuel production and export.

In India, as in most other countries, we predict that most car buyers will stick to petrol and diesel vehicles with internal combustion engines for the foreseeable future. Analysts and automakers say EV demand is growing first and fastest among two- and three-wheeler buyers, thanks in part to subsidies.

“This is a very price-sensitive market. You can’t look at India through the eyes of Europe or America.”

Indian consumers are reluctant to spend big on battery-powered cars, and Tata Motors recently launched an electric version of the Tiago hatchback that costs only about $800 more than a petrol-powered car.

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