Over the past few years the Indian EV industry has witnessed decent growth. The EV industry sold 236,802 electric vehicles, including electric two-, three- and four- wheelers in FY 2020-21. The rise of electric three-wheeler sales impacted while the electric four-wheeler sales went up. These may be accounted to launches by OEMs. SMEV also believes there is a need to bring policy reforms, improve financing, nation-wide awareness campaign, state government policy adoptions and building charging infrastructure in order to scale up EV ecosystem in India.
India recorded sales of 143,837 units of electric two-wheelers, including 40,836 high-speed and 103,000 low-speed, registering a decline of 6 per cent in FY 21. The 2020 saw sale of 152,000 electric two-wheelers.
88,378 units of electric three-wheelers - known as a booming segment among the electric vehicles in India – were sold as against 140,683 units sold in 2020.
Surprisingly, the electric four-wheeler segment saw a staunch rise with 4588 units sold compared to 3000 units sold in the year ended 2020. The growth can also be attributed to various OEM launches in the segment and rise of charging infrastructure in the metros. Also, government has asked petrol pumps to install atleast one charging station per petrol pump.
Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV) says, “We were anticipating a good growth before the start of FY 21, but sales remained stagnant due to various reasons. The sales in electric three-wheeler and two-wheeler segment stood low as compared to the last year. A good thing has happened that people started moving towards advanced batteries i.e. lithium. The city speed and high speed category in the two- wheelers segment have witnessed growth.”
A lot more needs to be done to achieve the target under the FAME II scheme. Timely intervention by the government in a form of policy change is required to fuel the growth and achieve the target by the end of FY 22, Gill believes.
Bank finance: A strong bank finance mechanism is still missing in the country. Only a few banks like SBI and Axis, to name a few, are offering loans on selected models. The government should ask banks to offer loans on electric vehicles, which will augment sales. Currently, EV OEMs are spearheading finance for its customers by collaborating with banks for easy monthly instalments.
Awareness: Another important factor that would transform the industry is creating awareness about green vehicles. The Central and State governments can play a crucial role to motivate and encourage citizens to adopt e-vehicles. State government of Delhi is encouraging people ti buy EVs creating tremendous awareness.
ECommerce: India’s ecommerce sector has shown a steep growth curve of growing over 200 per cent y-o-y. Thus, dependence on logistics increases proportionately. One major reason for EV adoption by B2B players is cash factor – electric vehicles are cheaper to maintain compared to ICE vehicles. Corporates in India are also proactively transitioning towards EVs. Amazon and Flipkart have already announced of deploying EV fleet of delivery vehicles. In future, logistics and ecommerce will see lot of traction in terms of last mile delivery moving towards EV.
State policy: States such as Maharashtra, Delhi, Andhra Pradesh, Bihar, Chandigarh, Haryana, Karnataka, Kerala, Madhya Pradesh, Odisha, Meghalaya, Punjab, Tamil Nadu, Telangana, Uttar Pradesh, and Uttarakhand have rolled out their EV Policy. However, some states are yet to implement the policy. The early implementation of state-level policy could assist in creating larger ecosystem in the country that would help the industry to grow at a much faster pace. Additionally, the state government policy should be focussed on demand generation for the initial period that would help in getting more volumes on road.
Charging infrastructure: There is a rapid movement around charging infrastructure. Around 1300 charging stations have been set up till now. Many corporates have ventured into the segment and started installing charging stations across the country. In next 5-6 years, India will be able to create robust charging infrastructure.
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