India Electric Vehicle Market Size, Share, Analysis, Trends, Growth, Forecasts, 2032

India Electric Vehicle Industry Prospective:

The India electric vehicle market size was worth around USD 5.39 billion in 2023 and is predicted to grow to around USD 527.53 billion by 2032 with a compound annual growth rate (CAGR) of roughly 66.40% between 2024 and 2032.

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India Electric Vehicle Market: Overview

The India electric vehicle market deals with the procurement, production, distribution, and after-sales services of electric vehicles (EVs). India, in recent times, has been showing promising signs of higher production and adoption of environmentally friendly automotives. Electric vehicles are powered through sustainable means in the form of charged batteries. They do not rely on internal combustion engines for generating energy. This attribute makes electric vehicles (EVs) future-oriented and sustainable solutions for the Indian automotive sector. Most electric vehicles are categorized into two types that are hybrid electric vehicles (HEVs) and battery electric vehicles (BEVs). PHEVs can be powered by liquid fuel as well as charged batteries whereas battery electric vehicles solely generate energy through charged batteries. However, EVs can be further classified based on different parameters such as battery charging time and driving range. The electric vehicle sector in India is projected to achieve greater heights during the projection period due to factors such as growing consumer awareness and reducing prices of electric vehicles. The lack of supporting infrastructure may limit the market’s adoption rate.

Key Insights:

• As per the analysis shared by our research analyst, the India electric vehicle market is estimated to grow annually at a CAGR of around 66.40% over the forecast period (2024-2032)
• In terms of revenue, the India electric vehicle market size was valued at around USD 5.39 billion in 2023 and is projected to reach USD 527.53 billion, by 2032.
• The India electric vehicle market is projected to grow at a significant rate due to the changing consumer preferences in India.
• Based on the propulsion type, the hybrid electric vehicle (HEV) segment is growing at a high rate and will continue to dominate the regional market as per industry projections.
• Based on the platform, the two-wheeler segment is anticipated to command the largest market share.
• Based on region, North India is projected to dominate the regional market during the forecast period.

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India Electric Vehicle Market: Growth Drivers

Changing consumer preferences in India may drive the market demand rate

The India electric vehicle market is expected to be prompted by higher revenue due to the changing consumer preference in the region. The Indian buyers are witnessing a shift in production selection. Factors such as higher consumer awareness and greater product availability have encouraged more buyers in recent times to opt for electric vehicles. For instance, as per official reports, the total sales of EVs in India surged by over 49% in 2023 as compared to 2022. The country is estimated to record a rise of more than 65% in EV sales in 2024. Consumers are increasingly becoming more environmentally conscious. Market research suggests that Indian buyers have a higher-than-average level of environmental consciousness as compared to global buyers.

Rising investments in the domestic production of EVs are assisting in the reduction of production costs

In the last five years, domestic production of electric vehicles in India has increased considerably. In-house production of modern and highly equipped electric vehicles helps in reducing the final sale price of the automobiles. This makes an electric vehicle range more affordable for regional buyers. In April 2024, Hyundai Motor Group, a leading international producer of auto vehicles announced that the company aims to introduce the first India-manufactured EV by 2025. Production is expected to start by the end of 2024. The support from the Indian government is expected to play a crucial role in shaping the India electric vehicle market in the future. In March 2024, the regional government announced a new policy which is expected to further prompt Chinese companies to cater to the growing needs of Indian consumers. As per the new policy, the import duty on 4-wheeler EVs will shrink from 70 to 100% to 15% in case an international company invests USD 500 million in the regional sector.

India Electric Vehicle Market: Restraints

Lack of sufficient infrastructure to support massive EV adoption will restrict the market expansion rate

The India electric vehicle industry is expected to be restricted due to the lack of robust supporting infrastructure. One of the key essentials for the successful mass adoption of electric vehicles is developing easily accessible charging stations across the region in addition to the availability of vehicle repair and service stations. Moreover, easy access to damaged vehicle components further helps the greater adoption of EVs as product usage becomes hassle-free. However, India currently lacks sufficient charging stations and vehicle maintenance is more expensive as compared to services available for traditional vehicles.

India Electric Vehicle Market: Opportunities

Growing investments in deploying electric vehicles across public transport infrastructure will generate expansion possibilities

The India electric vehicle market is expected to generate expansion opportunities due to the growing adoption of EVs across regional public transport systems. In 2022, the Indian government announced the launch of the National Electric Bus Program (NEBP). Through novel initiatives, the country aims to facilitate and encourage the adoption of public transport systems driven by clean fuel. Through NEBP, India has envisioned the deployment of 50,000 electric buses by 2030. Additionally, the interim budget announced by the Indian government in February 2024 focused on plans drafted to push the EV ecosystem in the country with special regard for greener public transport systems. Through the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME India) scheme, the government has already set aside INR 2671 crore to be used for achieving the set vision.

India Electric Vehicle Market: Challenges

Insufficient supply of clean energy in the region is a crucial challenge for the industry players

The industry for electric vehicles in India faces challenges in the form of an insufficient supply of clean energy. The success rate of electric vehicles in the form of environmental sustainability can only be achieved if the electricity generated from EVs is derived from clean sources. Electric vehicles will not achieve the goal of reducing carbon emissions if fossil fuel is used for energy generation required for powering EVs. India witnessed a rise of 8% in fossil fuel consumption in 2023 as per official findings. Generating and using clean energy is a major growth restraint faced by the industry players in India.

India Electric Vehicle Market: Segmentation

The India electric vehicle market is segmented based on propulsion type, platform, and region.

Based on the propulsion type, the regional market divisions are hybrid electric vehicles (HEV) and battery electric vehicles (BEV). In 2023, the highest growth was witnessed in the hybrid electric vehicle segment. These vehicles are powered by one or more electric motors and an internal combustion engine. The motors are powered by energy stored in the batteries. The vehicle cannot be charged like battery electric vehicles. They are charged using an internal combustion engine and regenerative braking. Fully charged HEVs can run for 40 to 65 km on average and then switch to the combustion engine for power.

Based on the platform, the India electric vehicle industry is segmented into four-wheeler, three-wheeler, and two-wheeler. In 2023, the highest growth was registered in the two-wheeler segment. As per market research, over 89% of India’s total EV sales in 2023 were witnessed in the two-wheeler segment. Attributes such as higher affordability and superior use of two-wheelers in the country are the driving forces. The four-wheeler segment is mostly witnessing higher demand in urban areas.

India Electric Vehicle Market: Report Scope

India Electric Vehicle Market: Regional Analysis

North India is expected to generate higher growth during the projection period

The India electric vehicle market is expected to be dominated by the North Indian states during the projection period. In 2023, the highest adoption of electric vehicles was observed in the state of Uttar Pradesh. It dominated nearly 17% of the regional market share. Rajasthan, another prominent North Indian state, contributed to around 8% of the total revenue generated in India through electric vehicles. The three-wheeler and two-wheeler segments delivered exceptional results. The state governments in these regions are taking massive steps towards further development of EV infrastructure. For instance, in July 2024, reports emerged suggesting that the Uttar Pradesh government is expected to invest over INR 400 crore till 2025 for improvements in the regional EV sector. The government plans to extend the Electric Vehicle Manufacturing and Mobility Policy till 2027. Maharashtra is a leading state of India with higher demand for electric vehicles across passenger and public transport vehicles. In February 2024, the Chief Minister of Maharashtra inaugurated 5150 air-conditioned electric buses that will be deployed in the Maharashtra State Road Transport Corporation (MSRTC) fleet.

India Electric Vehicle Market: Competitive Analysis

The India electric vehicle market is led by players like:

• Bajaj Auto
• Tata Motors
• TVS Motor Company
• Hero Electric
• MG Motors India
• Ola Electric
• Mahindra Electric
• Okinawa Autotech
• Revolt Motors
• Ampere Vehicles
• Ather Energy
• BYD India
• Ashok Leyland
• PURE EV
• Jitendra EV

The India electric vehicle market is segmented as follows:

By Propulsion Type

• Hybrid Electric Vehicle (HEV)
• Battery Electric Vehicle (BEV)

By Platform

• Four Wheeler
• Three Wheeler
• Two Wheeler

By Region

• India