India’s Electric Vehicle surge: a detailed look at the future of EVs

Government Initiatives Driving Growth

The Indian government has played a key role in promoting EVs. The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, launched in 2015, has been a major driver. FAME I aimed to make EVs affordable with an outlay of INR 895 crore, providing demand incentives for 278.000 EVs. FAME II, launched in 2019 with an outlay of INR 10.000 crore, extended the program until 2024. It approved 6.315 electric buses and thousands of charging stations across the country.

Karnataka has become a leader in the EV sector due to its comprehensive EV policy, fostering both manufacturing and research and development (R&D).

Market Dynamics and Sales Projections

Despite COVID-19 disruptions, EV sales and production remained strong. The International Energy Agency (IEA) reported over 10 million global EV sales in 2022, with Battery Electric Vehicles (BEVs) making up nearly 70%. This growth is due to favorable government policies and changing consumer preferences.

Deloitte predicts annual global EV sales will reach 31,1 million by 2030, with BEVs comprising 81% (about 25,3 million). In India, EV sales are expected to hit 1.644.000 units by FY25 and soar to 15.331.000 units by 2030. Growth will be driven by electric two- and three-wheelers, especially in the B2B segment for last-mile deliveries.

Public EV Charging Requirements by 2030

A major challenge for EV adoption in India is the lack of charging infrastructure. To meet the target of 30% EV sales by 2030, India will need 5,6–5,8 million public charging units. These will include both slow and fast chargers to meet different needs. Currently, all charging stations in India are unidirectional. As the EV market grows, there will be a push for bi-directional chargers, enabling utilities to manage charging actively and allow EVs to participate in the power market.

Challenges and Opportunities

India’s reliance on imported lithium-ion batteries and components raises costs and exposes the sector to global risks. EVs in India are currently almost twice the price of traditional vehicles. Other challenges include limited driving range, few product options, grid issues, and inadequate charging infrastructure. Incidents of vehicle fires due to insufficient battery testing have also hindered adoption.

Despite these challenges, there are significant opportunities. Deloitte’s 2024 Global Automotive Consumer Study reveals that 42% of Indian consumers are concerned about the lack of public charging stations, and 43% worry about charging time. To achieve 30% EV sales penetration by 2030, approximately 5.6–5.8 million public charging units are needed. Renewable energy will be crucial for powering these stations and promoting on-site power generation.

Future Outlook and Technological Advancements

India must focus on policy support, supply chain investments, local battery manufacturing, and enhanced charging infrastructure. Building domestic R&D capabilities, exploring alternative battery technologies (like calcium and sodium ions), and developing a regulatory framework for component manufacturers are essential steps.

Deloitte’s report also points to the potential of alternative fuels. While EV adoption will continue to rise, green hydrogen and biofuels are expected to gain traction. By 2040–2045, green hydrogen as a fuel might surpass EVs due to technological advancements and reduced costs.

Conclusion

The future of EVs in India is promising, driven by strong governmental support, technological progress, and shifting consumer preferences. While challenges remain, the opportunities for growth and innovation in the EV sector are vast. With continued efforts, India is poised to become a major player in the global EV market, leading the way toward a sustainable and eco-friendly automotive future.

Source: Deloitte