Moody believes that India’s EV penetration would be boosted by government incentives. These include subsidies to state-level, battery manufacturing, and local battery manufacturing.
Moody’s Investors Service reported that India is the fourth largest car market worldwide, while electric vehicle penetration is only 1%.
The country’s charging infrastructure and the willingness of consumers to convert to EVs from ICE or traditional petrol, diesel, or natural gas-powered vehicles will determine the pace of EV sales growth and the government’s 2030 target.
We expect a variety of government incentives to drive EV penetration. Moody’s stated that these include incentives for consumers, production-linked incentives to encourage advanced battery storage, local cell manufacturing, and rate cuts.
India is now the third largest vehicle market after China and the USA, having surpassed Japan in this regard.
Last month, Nitin Gadkari, Union Minister, stated that India could use the recently discovered lithium reserves in Jammu & Kashmir to become the number one manufacturer of electric vehicles in the world.
The key ingredient in the production of electric vehicle batteries is lithium.
The government aims to make EV sales account for 30% of private cars, 70% of commercial vehicles, and 80% of two- and three-wheelers by 2030.
Moody’s stated that Tata Motors has an 85% share of the Indian battery EV market. This was between April and December 2022.
Moody’s stated that the company has sold approximately 50,000 EVs through its presence at 250 dealers in 165 cities and close to 4,300 charging stations.
Tata stated that it will increase its EV lineup from four models to 10 by March 2026. Tata’s electric vehicle business has raised USD 1 Billion from TPG, a private equity investor.
Global sales of battery electric vehicles were around 8 million last year. China accounted for 65%. Nearly 20% of the global battery electric vehicle sales came from Europe. Moody’s stated that these consumers benefited from government incentives and expanded product offerings by automakers.
It stated that “We expect Battery Electric Vehicles (BEVs), to grow from approximately 10% of all new vehicle registrations to over one-third by 2030, and almost half by 2035.”
