Slow Uptake Of Electric Vehicles In India Hinders Global Market Share, Says Report


According to a report by S&P Global Ratings, India, as the world’s third-largest auto market, is an attractive target for electric vehicle companies. However, due to the slow uptake of electric vehicles on the domestic front, it is unlikely that any Indian company will have a significant global share in the near future.

Asia will continue to be the world’s largest producer and market of electric vehicles, EV batteries and EV battery material. The continent is also expected to remain at the forefront of the EV era.

India, the third largest auto market in the world, is an attractive target for electric vehicle companies. In India, EV sales more than double in 2022. However, this was a relatively low starting point. The report stated that EV sales represented less than 2% of total light vehicle sales over the past 12 months.

“Moreover, 90% of the EVs sold in India are two-wheelers and three-wheelers. The development of a charging infrastructure that is adequate will be crucial to the adoption of EVs. Given the slow uptake of EVs domestically, it is unlikely that any Indian company will have a significant global share of EVs within the next few years,” the report added.

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S&P Global Ratings noted that Tata Motors in India had taken the lead with more than 80% of the market share in the EV sector.

“We expect the company to maintain its strong position despite rising competition from other players, including SAIC Motor, Hyundai and domestic companies like Mahindra & Mahindra,” the report said.

Jaguar Land Rover Automotive PLC is the UK subsidiary of Tata Motors. It lags many competitors in its move to EVs. The report stated that this could harm its competitiveness.

“We expect margins and earnings to be manageable, as EVs will only represent about 10% of Tata Motors’ expected passenger vehicle sales for fiscal 2023.” 

The rating agency stated that there is no significant funding requirement due to the shared infrastructure between the ICE segments.

Tata Motors has also raised around USD 1 billion by selling convertible vehicles. The securities must convert into an 11-15% stake in the Indian EV business.

The funding has reduced the debt significantly at India’s level. S&P Global Ratings stated that they believe Tata’s Indian EV Business has the potential to be further monetised. According to the report, Asia is at the heart of the EV era.

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The region is home to many of the necessary resources (Indonesia, in terms of nickel), policies that are highly supportive (China), as well as industry-leading technologies (Korea China and Japan). The report stated that a number of Asian companies are surpassing established players. This is especially true in China which has the largest EV market in the world.

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