According to Motor Intelligence, the size of the Indian electric vehicle (EV) market is projected to be $34.8 billion in 2024 and is anticipated to grow at a compound annual growth rate (CAGR) of 22.92% to reach $120 billion by 2030.

Based on speed, the market is divided into three segments, according to Custom Market Insights: less than 100 mph, 100 to 125 mph, and more than 125 mph. With a market share of 45% in 2022, less than 100 mph dominated the market and is predicted to continue to do so throughout the forecast period of 2024–2032, significantly influencing the EV market.

EVs have a bright future in India:

India’s EV sales are still quite low, the report notes. China’s market may have reached a certain level of maturity, but the elimination or reduction of some subsidies in China, Europe, and India has hurt the country’s chances of making more sales in the future.

All these factors, including new emissions regulations like those proposed by the US Environmental Protection Agency, a resurgence of interest in the commercial fleet market, and recent price reductions for many EV models, should continue to drive growth.

Moreover, targeted legislative incentives are providing the growth impetus.

So, what is changing in India?

EV sales will be able to continue growing at their current rates, especially in Europe. However, it seems that things are going differently in Developing economies and emerging markets (EMDEs). For instance, companies like Exicom in India are starting to look to the capital markets to finance their expansion into electric vehicles. Announcements of new capital projects and increased capacity for battery production are positive indicators for the global industry.

Concessional financing has aided in the development of mass transit public transportation in EMDE areas. Examples of these projects include Senegal’s all-electric Bus Rapid Transit system, which is partially funded by the World Bank, and India’s deployment of 50,000 electric buses along with charging infrastructure.

By 2030, India wants to sell 30% of its cars as electric vehicles. The Indian government has introduced various schemes, including grants and subsidies, to stimulate the development of alternative fuel infrastructure and spur the expansion of charging stations. Two of these stand out:

i. Duty Reduction for EV Imports: Under the new regulations, vehicles with a minimum CIF value of $35,000 and above will only pay 15% of customs duty. The program will be in effect for five years, provided the manufacturer establishes domestic facilities within three years of going on sale.

ii. After the successful launch of FAME 2, the Indian government is expected to unveil the Rs 10,000 crore FAME 3 scheme within the first 100 days of its tenure. The program will be similar to FAME 2, which came to an end in March 2024, and will offer financial incentives for government-owned buses, three-wheelers, and electric two-wheelers.

The global scenario:

A new World Energy Investment report states that because of the recent drop in battery prices and the ongoing price wars among EV manufacturers as they fight for market share, the transportation industry may grow even slower than in the past.

EV sales in certain significant EMDE are poised to soar due to the arrival of Chinese manufacturers in Latin America and the expansion of the EV industry in India. Policies like the US Inflation Reduction Act and Europe’s Carbon Border Adjustment Mechanism that aim to onshoring manufacturing capacity should lead to an increase in spending on EV production outside of China.