India’s electric vehicle (EV) export market grew by 246.3 per cent in the first seven months of 2023, underscored by strong demand from Nepal and a surging interest from European nations, according to the latest data from the Department of Commerce. The country exported 1,14,000 EVs in the period from January to July 2023, compared to 32,900 in the same period last year.
Nepal and Europe Lead the Demand
Nepal emerged as the top destination for India’s EV exports, accounting for 44.5 per cent of the total volume, followed by France with 12.7 per cent and Belgium with 8.6 per cent. Other major markets included Germany, Italy, Spain, the Netherlands and the United Kingdom. The demand for EVs in these countries was driven by various factors, such as environmental awareness, policy support, tax incentives and infrastructure development.
India’s EV exports mainly consisted of two-wheelers (e-2Ws) and three-wheelers (e-3Ws), which together made up 98.7 per cent of the total volume. The e-2Ws segment witnessed a remarkable growth of 374.5 per cent, while the e-3Ws segment grew by 216.4 per cent. The four-wheeler (e-4W) segment, however, remained negligible with only 1,400 units exported in the first seven months of 2023.
India’s EV Industry on the Rise
The impressive performance of India’s EV export market reflects the growing potential of the country’s EV industry, which is expected to become the third largest in the world by 2030. The domestic EV market also recorded strong growth in 2021, supported by the government’s implementation of favorable policies and programs, such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme and the National Electric Mobility Mission Plan (NEMMP).
According to the Society of Manufacturers of Electric Vehicles (SMEV), India sold 5.9 lakh EVs in 2021, registering a growth of 11.34 per cent over 2019. The e-2Ws and e-3Ws categories dominated the sales, while the e-4Ws category saw a decline due to the COVID-19 pandemic and its impact on production and supply chains. However, with the recovery of the economy and the availability of new models and variants, the e-4Ws segment is expected to bounce back in 2024.
The Indian EV industry is also witnessing a surge in investments from both domestic and foreign players, who are keen to tap into the lucrative market opportunities. For instance, Mahindra & Mahindra plans to launch 16 battery electric vehicles (BEVs), eight each in the SUV and light commercial vehicle segments by 2027. Similarly, Tata Motors aims to introduce 10 new electric models by 2025. Moreover, global giants such as Tesla, Hyundai and Kia have also expressed their interest in entering or expanding their presence in the Indian EV market.
Challenges and Opportunities Ahead
Despite the impressive growth of India’s EV industry, there are still several challenges that need to be addressed to ensure its long-term sustainability and competitiveness. Some of these challenges include high cost of ownership, lack of charging infrastructure, limited consumer awareness and preference, inadequate standardization and regulation, and dependence on imports for critical components such as batteries and motors.
To overcome these challenges, India needs to adopt a holistic and integrated approach that involves all stakeholders, including government agencies, industry associations, manufacturers, suppliers, consumers and civil society groups. Some of the key measures that can help accelerate the adoption and development of EVs in India include:
- Providing financial incentives and subsidies for both manufacturers and consumers of EVs
- Developing a robust and accessible charging network across urban and rural areas
- Promoting research and innovation in EV technologies and materials
- Enhancing consumer awareness and education on the benefits and advantages of EVs
- Establishing clear and consistent standards and regulations for safety, quality and performance of EVs
- Encouraging local manufacturing and sourcing of EV components to reduce dependence on imports
By implementing these measures, India can not only boost its EV industry but also contribute to its national goals of reducing greenhouse gas emissions, improving air quality, enhancing energy security and creating employment opportunities. India has a unique opportunity to become a global leader in the EV sector, given its large market size, favorable demographics, strong engineering talent and entrepreneurial spirit. The success of India’s EV industry will depend on how well it can leverage its strengths and address its challenges in the coming years.