The Indian electric vehicle market or EV is projected to grow by 26.4% annually, reaching a total value of $2.5 billion by 2024.
The India Electric Vehicle and Charging Infrastructure Market Databook predicts a 30% CAGR in electric vehicle adoption from 2024-2028, reaching $7.2 billion by 2028, as per a ResearchAndMarkets report.
Growth drivers:
The sector is expected to experience significant investment growth in the medium term due to the rapidly expanding competitive landscape.
Innovative start-ups raising venture capital and private equity to expand distribution and launch new products will be the main growth drivers.
EV start-ups are launching funding rounds to invest in research and development, as well as expand their distribution network.
Funding trends:
River, an electric vehicle start-up based in Bengaluru, secured $40 million in a Series B funding round in February 2024.
Yamaha Motor led the Series B round, with Al-Futtaim Automotive, Toyota Ventures, Lower carbon Capital, and Maniv Mobility as current investors. The company plans to utilize the funding infusion to enhance its Indian distribution and service network, while also allocating a portion of its earnings to research and development.
Ola Electric secured $50 million from EvolutionX Debt Capital for a lithium-ion cell plant in Tamil Nadu. It plans to raise $660 million and spend Rs 16 billion on R&D before public offering.
Zypp Electric raised $15 million in a Series C round in May 2024, aiming to expand its fleet from 21,000 to 200,000 e-scooters in 15 Indian cities by 2025, potentially influencing the market’s competitive landscape.
Tata Motors paving the way?
Tata Motors’ TPEM division led the Indian passenger electric vehicle market, registering a 48% increase in FY 2024, accounting for 13% of the company’s total volume.
The company plans to invest between Rs 160 billion and Rs 180 billion in its electric vehicle division by FY 2030, aiming for 30% of its total volume.
The company plans to introduce ten new electric vehicles by FY 2030, including the Harrier EV and the Tata Curvv mid-size, to boost its market share and promote electric vehicles, including the Harrier EV.
TPEM plans to expand its retail channel in 50 Indian cities and strengthen charging infrastructure with partnerships with Hindustan Petroleum, Shell, and Bharat Petroleum, aiming for 100,000 charging points by FY 2030.
Global EV manufacturers setting shop in India:
Global EV makers plan to establish EV plants in India by 2024, aiming to capitalize on the Indian market’s strong growth potential over the next five years.
On the other hand, the government mandates Indian companies to manufacture before selling to customers, thereby facilitating their entry into the Indian market.
Vietnam-based VinFast plans to build an electric vehicle plant in Tamil Nadu, with an initial investment of US$500 million, with a production capacity of 150,000 cars annually.
Tesla plans to enter the Indian market, investing in a manufacturing facility over the medium term, as the government encourages manufacturing in the country.