The continuous rise in middle-class income and the increasing young population in the country is resulting in strong growth, thereby increasing the demand. India is expected to become a leader in shared mobility by the year 2030, providing innumerable opportunities for electric and autonomous vehicles in the country. The Indian automobile sector is witnessing a shift in focus towards electric cars, providing increasing opportunities for international market entry.
Reaping the benefits of the increasing demand in the country, Tesla, the American electric cars manufacturer has revealed its plans to expand its overall market beyond North America, Europe, and China. The company intends to establish a ‘partial presence’ in India, Africa, and South America by the end of 2019, and expand further in 2020. Tesla is entering the Indian automobile market competing against Indian players like TATA, Hero MotoCorp.etc, along with global players that are running way ahead in the game.
The Indian electric vehicle space is observed to be dominated by electric two-wheelers, as suggested by the reports. The country has a target of bringing 30% electric mobility to India by the year 2030. A TechSci Research report issued in December 2017 estimated the electric vehicle to grow at a CAGR of over 37%, during the years 2018-23, and the Indian electric two-wheeler market is forecasted to grow at a CAGR of more than 23%, during these years.
Several Indian states are also doing the groundwork to introduce electric vehicles and provide the required bandwidth for its expansion and use. Indian states like Kerala, Uttarakhand, and Telangana have introduced their own electric vehicle policies bringing in more opportunities for electric vehicle manufacturers.
With response to the rising investment in the country, the FDI inflow in the automobile sector stood at 19.29 Billion between April 2000 and June 2018. Domestic automobile production increased at 7.08% CAGR between FY13-18 with 29.07 million vehicles manufactured in the country in the financial year 2018. The overall domestic automobile sales, on the other hand, increased by 7.01% CAGR between FY13-18 with 24.97 million vehicles being sold in FY18. The auto sales in July 2018 witnessed a year-on-year growth rate of 7.9 percent across segments. Mahindra & Mahindra, the Indian multinational car manufacturer expects the electric vehicle segment to stabilize in India over the next five years.
Reports have shown that the India electric vehicles market is expected to expand at a CAGR of 77% in terms of value during the forecast period. The market players are focusing on developing and expanding their business in India where the electric vehicles industry is growing at a rapid rate. Key players in the industry are planning to enter the Indian market, focusing on partner search in order to create a noticeable presence in India.
Significant incentives for electric vehicles under FAME India and NEMMP 2020, low maintenance and operation costs of electric vehicles, increasing crude oil prices anticipated to augment the adoption of electric vehicles, etc. are considered some of the key drivers of the growth and increasing demand in the Indian automobile sector. To conclude, India, one of the fastest growing economies in the world is also one of the fastest growing automobile sectors and stores a huge market for global industry giants in the electric automobile sector.
[i] https://www.ibef.org/industry/india-automobiles.aspx
[iii] https://inc42.com/buzz/elon-musk-hints-at-partial-presence-in-india-by-next-year/
