In the calendar year 2023 (CY23), the electric vehicle (EV) market in India experienced remarkable growth, with sales volume surpassing 1.5 million units, reflecting a substantial 50% increase compared to CY22, as detailed in the report “Electric Vehicles: Revving up despite Roadblocks” prepared by CARE Ratings Limited (CareEdge Ratings). The surge in EV adoption was attributed to the introduction of innovative EV models across various segments, offering consumers improved choices. Notably, the overall EV market share in the Indian automotive landscape rose from 1.75% in CY21 to 6.38% in CY23, a significant increase within a span of just two years.
Examining specific categories, two-wheelers (2W) and three-wheelers (3W) collectively constituted a dominant share, accounting for 90-95% of total EV sales, while electric passenger vehicles (PVs) comprised 5%, and commercial vehicles (CVs) held a minor fraction. Two-wheelers and three-wheelers witnessed growth rates of 37% and 66%, respectively, with passenger vehicles and commercial vehicles experiencing even higher growth rates at 113% and 169%, respectively.
As the industry enters CY24, expectations are high, with projections indicating a potential sales volume surpassing 2 million units. This optimism is underpinned by increasing demand, sustained government support through incentives, and a positive outlook for the EV ecosystem. However, it is emphasized in the report that investments in the EV ecosystem remain critical for fostering widespread EV adoption.
Despite challenges such as inadequate EV charging infrastructure, concerns about battery capacity, and policy revisions like FAME II, the overall expansion of the EV market remained robust throughout CY23, as highlighted in the report by CareEdge Ratings. The FAME II policy, despite undergoing revisions in 2023, did not impede the industry’s growth trajectory.
Looking ahead, the growth momentum is anticipated to persist in CY24, propelled by the government’s heightened focus on electrification, potential extensions of FAME II, a growing EV ecosystem with increased charging infrastructure, and an expected reduction in battery costs. The continuation of the FAME II initiative, as discussed in the report, is poised to bolster EV demand, and incentives and subsidies are crucial in encouraging consumer adoption.
In conclusion, while CY23 marked a significant year for EV growth in India, the outlook for demand and growth sustainability remains promising, as outlined in “Electric Vehicles: Revving up despite Roadblocks,” the report prepared by CareEdge Ratings. Ongoing government support, incentives, and investments in the EV ecosystem are deemed vital for the massive adoption of EVs, ensuring a sustainable and environmentally friendly transportation future for the country.
