Startup News Magazine

How EV industry will look like in India in 2023 onwards

Authored Article by Vikrant K. Aggarwal (Co-founder of EVI Technologies)

As we come to an end 2022, here is a look at how the EV industry will shape up in 2023 onwards. Over the projected 2021–2030, the Indian electric vehicle market is anticipated to expand at a CAGR of 49% as per “2021, India Electric Vehicle and Component market overview report 2021-2030.” released by India Energy Storage Alliance (IESA).

India presently sees a rapid increase in demand for electric vehicles due to favourable government policies that encourage the use of these vehicles. The government has taken up many initiatives to promote the availability and usage of electric vehicles and the market expansion in India. According to a recent report, “EV sales across segments (2W, 3W, 4W and E-Buses) grew by 110% in FY22 compared to FY21”. Over the 2023-2030 period, the rising demand for these electric vehicles will be hampered by a scarcity of charging stations and high purchase prices. These two aspects need to be dealt with utmost priority by all concerned. 

The Indian electric vehicle market is divided into public and private end-user segments. Due to favourable government policies encouraging alternative fuel sources to lessen reliance on fossil fuels, public vehicles maintained a substantial market share. The Government is taking requisite steps to switch the public transportation system to an all-electric operation. As a result, this market will experience rapid expansion in the coming years. With the country’s offer of tax benefits and subsidies on purchasing private electric vehicles, demand for electric vehicles from the private sector would also increase.

OEMs in the EV sector will assume a significant leadership role to meet the industry demand. The government also sought to boost EV adoption by encouraging local manufacturing by introducing production-linked incentives (PLIs). 

By 2030, India’s EV industry could rank among the biggest in the world. According to a recent study, India needs at least 2 million public EV charging points across the country by 2030 to achieve the Govt. target of EV adoption, i.e., 30% penetration in private cars, 70% in commercial vehicles and 80% in 2W/3W’s by 2030. 

The comprehensive battery-swapping scheme should get implemented from the year 2023. The adoption of EVs will advance, thanks to the switching of batteries, particularly in the two and three-wheeler segments for urban mobility. According to the Intergovernmental Panel on Climate Change, transportation is responsible for around 23% of the world’s energy-related greenhouse gas emissions, with road transport making up 72% of that total. Governments have passed progressively stricter emissions regulations for vehicles like passenger automobiles in an effort to mitigate climate change.

Many governments want to stop selling cars powered by fossil fuels by 2040, enticing people to switch to electric cars by offering them large financial benefits. Grants and loans may be required to make EV infrastructure projects affordable for many rural areas in India, as EV infrastructure set-up will need large financial expenditure.

Overall, the EV sector will see much-wanted growth in FY23 onwards, propelled by sub-segments such as EV financing, Motor & its controller, vehicle intelligence system, Battery Swapping & Battery-as-a-Service and comprehensive Charging infrastructure network. Startups can look forward to bright prospects in these segments.