India Electric Car Market: Industry Analysis and Forecast (2023-2029)

The India Electric Car Market size was valued at USD 1.89 billion in 2022 and the total India Electric Car Market revenue is expected to grow at a CAGR of 45.2 % from 2023 to 2029, reaching nearly USD 25.71 Billion.
India Electric Car Market Overview
The future of electric transportation is evolving rapidly. India is one of the top ten automotive markets in the world today. The increasing middle-class population with buying potential and steady economic growth drive the demand for electric Cars in India. India’s electric car market is witnessing significant growth and transformation towards a greener and more sustainable future. The adoption of electric vehicles accelerated due to the Indian government's actions to support electric mobility, including incentives, subsidies, and infrastructure development. These initiatives are motivating individuals and organizations to switch to electric cars, which is boosting demand for electric vehicle sales across the nation. However, challenge such as limited higher upfront costs limits the market growth in India. To know deeper information on the India Electric Car Market penetration, competitive structure, pricing, and demand analysis are involved in the report. The report includes historical data, present and future trends, competitive environment of the India Electric Car Market.
India Electric Car Market Snapshot
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Importance of India Electric Car Market:

The electric vehicle opportunity is a game-changer for India's car industry. With rapid urbanization, migration, and economic growth causing severe air pollution and traffic congestion, transitioning to EVs is crucial to reduce pollution and lower dependence on expensive oil imports covering 80% of the country's needs. India's worst pollution record in 2021, leading to over 2 million deaths annually and significant GDP costs, emphasizes the urgency. Embracing EVs can improve public health, and energy security, and create a domestic EV industry with economic growth potential. However, successful adoption necessitates investment in charging infrastructure and supportive policies for a sustainable future.


India Electric Car Market Dynamics:
Increasing Environment Concerns to Drive the Electric Car Market in India.

India stands third in the world with the largest road connection. Traveling by road is a preferable choice for Indian people almost 60% of the population used personal or shared vehicles to travel. Petrol and Diesel are major causes of global warming and environmental air pollution. India's rapid urbanization and economic growth helped to rise in vehicular traffic, especially in metropolitan regions. This increase in vehicles creates severe air pollution, which made India one of the most polluted countries globally. Electric cars offer a cleaner and greener alternative. They produce zero carbon emissions. The increasing adoption of Eclectic vehicles, especially E- Cars India significantly reduces its carbon footprint and reduces the adverse effects of vehicular pollution on public health and the environment.

Consumers are more and more aware of the impact of gasoline vehicles on the environment and are actively searching for electric cars. Electric vehicles have environmental benefits and lower operating costs over time and are finding favor among environmentally conscious consumers. Therefore, The rising environmental consciousness among Indian consumers driving the electric car market. According to the MMR Study Growing number of cars in Indian cities including Private & commercial vehicles account for 66.28% of the total consumption of diesel. Low standards for vehicle emissions & fuel have resulted in increased levels of Nitrogen Oxides & Sulphur this factor largely impacted the environment and boost the level of air pollution. Therefore, overcoming the environmental impact people significantly shift to Electric cars rather than fuel cars. National Mission for Electricity Mobility is aimed at enhancing the penetration of efficient and environmentally friendly hybrid and electric vehicles. All factors significantly help to drive the India Electric Car Market. Increasing Environment Concerns boost the sales of Electric Vehicles in India.
Annual EV sales trend in India from 2018 to 2022


 

Positive Government initiatives boost the Indian Electric Car Market.

The Electric vehicle sector has grown significantly. The Government of India Launched various schemes such as FAME India Scheme this scheme provided financial incentives to promote the adoption of electric vehicles (EVs) across various segments, including two-wheelers, three-wheelers, and four-wheelers. The incentives were offered to both manufacturers as well as consumers, making electric vehicles more affordable. The Indian government took steps to promote electric vehicles by reducing the Goods and Services Tax on these vehicles to 5%, a considerable reduction compared to the GST rate for conventional vehicles. The purpose behind tax concession is to make electric cars more affordable for consumers and minimize the upfront cost. To boost the domestic production of electric vehicles, the government offered various subsidies and incentives to manufacturers. This factor significantly helps to raise the adoption of eco-friendly transportation options and supports the growth of the India Electric Car Market. The Indian government encouraged the adoption of electric vehicles in the public sector by implementing a public procurement policy. This all factors help to boost the demand for electric Cars in India. For example, according to MMR Study Report, the positive state and central government helped to accelerate the demand for E- cars in India in the year 2022.
State-wise Registered E- Cars Annual Sales in the year 2022


Lack of Charging Infrastructure restrains the Electric Car Market growth in India.

The absence of charging infrastructure limits the growth of the electric car market in India. Primary concerns for potential electric car buyers are range anxiety, the fear of running out of battery power without access to a charging station. The limited availability of charging stations slows down the adoption rate of Electric cars in India. Without a reliable and extensive network of charging points, potential EV buyers choose to stick with conventional internal combustion engine vehicles that have a well-established refueling infrastructure. This limited adoption, in turn, discourages automakers from investing in the development and production of electric vehicles, further hindering the growth of the Electric Car market in India. The lack of charging infrastructure affects investor confidence. Building a strong charging network requires significant investments from both the government and private sector. However, the lack of a large consumer base due to charging infrastructure limitations creates uncertainty for investors and slows down the funding and expansion of charging networks. Also, the limited lifespan of the batteries of electric cars most consumer prefers engine vehicles from a safety point of view. Therefore, this factor significantly limits the growth of India Electric Car Market.

Rising Domestic Manufacturing Units Create Lucrative Growth Opportunities for the Electric Car Market Growth in India

Domestic manufacturing reduces production costs and enables price competitiveness in the electric car market. Transportation expenses associated with importing components, domestic manufacturers offer electric vehicles at more affordable prices, making them accessible to a larger consumer base. Also, the establishment of domestic manufacturing units generates significant employment opportunities in the automotive sector. As electric vehicle production requires a specialized workforce, this leads to skill development and contributes to India's economic growth and job creation. A strong domestic manufacturing base positions India as a potential export hub for electric vehicles and components. With competitive manufacturing capabilities, India helps the growing international demand for electric vehicles, boosting its export revenue and trade balance. Moreover, domestic manufacturing allows companies to customize electric vehicles to meet India's unique needs and challenges, such as adapting vehicles to local road conditions, weather, and consumer preferences. Therefore, Increase Domestic Manufacturing units open up new growth opportunities in numerous sectors.

Competitive Landscape of India Electric Car Market.

The India Electric Car industry is highly competitive, with various opportunities for new market entrants to a continuous shift in consumer preference towards an environment-friendly car. The advantages of Electric Car presents a lucrative opportunity for consumers in India. The factors such as territorial market size, competition intensity, capacity, and local infrastructure influence the value chain of the product.
Prominent Indian Electric Car key players are Hyundai Motor Company, Mahindra & Mahindra Ltd., Toyota Kirloskar Motor Pvt. Ltd., Volvo Car Corporation, Honda Motor Co. Ltd. Tata Motors Limited, AB Volvo, Maruti Suzuki, MG Motor India Private Limited, TATA Motors, and Hero Electric Vehicles Pvt. Ltd.

Mahindra & Mahindra Limited mainly deals in electric vehicles and related products. The company offers a product line that includes electric cars. The company has a strong distribution network all over India, with over 100 dealerships and service centers. Mahindra & Mahindra Limited also expanded its business overseas, with exports to countries such as Nepal, Bhutan, and Sri Lanka. It is committed to sustainable development and has implemented various measures to reduce its carbon footprint and promote environmental sustainability.
Mahindra Sales Figures in Volume Units (2021-2022)



Sr No
Car/Year
2021
2022


1
XUV 700
17139
65371


2
Thar
32976
46297


3
Scorpio
25293
64179


4
XUV 300
32470
60260


5
Alturas G4
462
196


6
Bolero
68524
94332


7
Marazzo
5816
2340



The number of India Electric cars of key players is huge and is growing with the increasing opportunity to generate significant revenue due to the growing demand for Electric cars from various parts of India. The key players in the market are implementing growth strategies for marketing and online discount schemes to gain a competitive advantage in the market. The strategies adopted by the major player, such as expansion.
India Electric Car Market Segment Analysis
Based on Battery Type, Lithium-ion batteries dominate the battery segment of the India Electric Car Market in the year 2022. Lithium-ion batteries are rechargeable as well as long-lasting and have higher energy density than other types of batteries. Lithium-ion batteries have the capacity to store more energy in the available volume and weight. Therefore utilization of Lithium-ion batteries in electric cars is increasing rapidly. Lithium-ion batteries provide electric cars with longer driving ranges, making them more appealing to consumers seeking practicality and convenience. Moreover, the growing availability of lithium-ion battery manufacturing facilities in India has reduced costs, encouraging wider E- car adoption.

Lithium-ion batteries have emerged as the preferred choice in the electric car market, propelling India towards a greener and sustainable transportation future. The battery’s dominance is driven by its superior energy density, longer lifespan, and faster charging capabilities in comparison to traditional lead-acid batteries. Therefore, electric vehicles are experiencing rapid growth in India, largely owing to the widespread adoption of lithium-ion batteries.
India Electric Car Market By Battery Type In The Year 2022 (%)


Geographical Analysis:

Uttar Pradesh state dominates the India Electric Car Market in the year 2022. The adoption of electric vehicles has significant potential in Uttar Pradesh. The state reported 82084 yearly sales of electronic cars in 2022. Uttar Pradesh is a desirable site for electric car manufacturers to establish production facilities because it is home to numerous industrial and manufacturing clusters. These manufacturers' presence in the state increases the accessibility and availability of electric vehicles. The Electric Car Market is expanding the quickest in Maharashtra. Higher sales of electric vehicles were influenced by the state's focus on developing infrastructure and supporting renewable energy. Initiatives for electric mobility have received proactive backing from the Maharashtra government. The government offers incentives and subsidies to both electric car manufacturers and buyers. High population densities and expanding urbanization are found in Maharashtra's major cities, including Mumbai and Pune. As consumers became more conscious of the negative effects traditional fossil fuel vehicles had on the environment, they showed a greater interest in electric automobiles as a substitute.
India Electric Car Market Scope: Inquire Before Buying



India Electric Car Market


Report Coverage
Details


Base Year:
2022
Forecast Period:
2023-2029


Historical Data:
2017 to 2022
Market Size in 2022:
US $ 1.89 Bn.


Forecast Period 2023 to 2029 CAGR:
45.2%
Market Size in 2029:
US $ 25.71 Bn.


 Segments Covered:
by Battery Type
Lithium-ion batteries
Lead-acid
Others


by Technology
Battery Electric Vehicles (BEVs)
Plug-in Hybrid Electric Vehicles
Other


by End User
Shared Mobility Provider
Government Organization
Personal user



India Electric Car Key Players:
1. Hyundai Motor Company
2. Mahindra & Mahindra Ltd.
3. Toyota Kirloskar Motor Pvt. Ltd.
4. Volvo Car Corporation
5. Honda Motor Co. Ltd.
6. Tata Motors Limited
7. AB Volvo
8. Maruti Suzuki
9. MG Motor India Private Limited
10. TATA Motors
11. Hero Electric Vehicles Pvt. Ltd.
FAQs:
1] What segments are covered in the India Electric Car Market report?
Ans. The segments covered in the India Electric Car Market report are based on Battery Type, Technology, End-User, and States.

2] Which region is expected to hold the highest share of the India Electric Car Market?
Ans. The Uttar Pradesh of India is expected to hold the largest share of the India Electric Car Market.

3] What was the market size of the India Electric Car Market by 2022?
Ans. The market size of the India Electric Car Market by 2022 is US$ 1.89 Bn.

4] What is the forecast period for the India Electric Car Market?
Ans. The forecast period for the India Electric Car Market is 2023-2029.

5] What is the market size of the India Electric Car Market in 2029?
Ans. The market size of the India Electric Car Market in 2029 is valued at US$ 25.71Bn.