Five months into FY2025, EV industry retails at 733,000 units are 43% of FY2024’s record 1.68 million units. If the 2- and 3-wheeler segments, which account for 94% of total sales, maintain the same momentum they have displayed in April-August 2024, the 2-million mark could be attained. A lot though depends on whether FAME III subsidy is enabled, OEMs rationalising EV prices with enhanced localisation and accelerated customer acceptance of e-mobility.
09 Sep 2024 | 10082 Views | By Ajit Dalvi
Today – September 9, 2024 – is the fifth anniversary of World EV Day, the biggest electric mobility campaign of the year. It is a day which unites companies and individuals, policy makers and thought leaders, one which sees activations and announcements that help continue to propel the zero-emission ...
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Today – September 9, 2024 – is the fifth anniversary of World EV Day, the biggest electric mobility campaign of the year. It is a day which unites companies and individuals, policy makers and thought leaders, one which sees activations and announcements that help continue to propel the zero-emission movement worldwide in a time of unbridled climate change. It’s also reason to take a close look at how the EV industry is faring in India, which is one of the fastest-growing automotive markets globally.
India EV Inc, which clocked record new vehicle retail sales of 1.68 million units in FY2024, up 42%, looks set to raise the fiscal year benchmark in FY2025. Five months into FY2025, combined sales of the electric two- and three-wheelers, passenger vehicles and commercial vehicles at 732,893 units (up 19% YoY, April-August 2023: 616,189 units) are already 43% of the FY2024 total of 16,80,902 units, with seven months still to go in FY2025.
If the EV industry is to hit cumulative retail sales of 2-million units for the first time in a fiscal year, it is still 1.26 million units away from that target and will have to maintain the current 19% to 20% YoY growth rate over the next seven months to achieve the new milestone.
A lot though depends on whether the FAME III subsidy – expected to be finalised in the next couple of months – is enabled for the volume-driving electric two- and three-wheeler segments, the level to which OEMs rationalise their product prices as a result of increased localisation levels, and also further enhancement of customer acceptance of e-mobility across the country.
INDIA'S EV GROWTH STORY PICKS UP PACE SINCE FY2022
A deep dive into retail sales numbers for the past 12 fiscal years reveals just how demand has grown for EVs in India, particularly in the past two-and-a-half years. The charge of the EV brigade can be gleaned from the fact that sales the monthly shift to six-figure sales, which began in festive October 2022 has continued for 23 months on the trot.
Vahan-sourced 12-year EV retail sales data reveals that a total of 4.69 million units have been sold in India since FY2014. An overwhelming 76% – 35,97,579 units – of the 4.69 million EVs sold (see data table above) have come in just two-and-a-half fiscals (FY2023, FY2024 and five months of FY2025), indicating how rapidly demand has escalated for EVs in the country.
The government has outlined a strategic shift to e-mobility, and has targeted EVs to account for 30% of its mobility requirements by 2030. Growing consumer awareness about the need to use eco-friendly transport and the wallet-friendly nature of EV cost of ownership over the long run is proving to be a big catalyst to adoption of electric mobility. What’s more, there’s fast-paced demand coming in from the e-commerce industry and logistics players for EVs on two and three wheels, and from taxi fleet operators for electric passenger vehicles.
Meanwhile, recognising the huge business potential, auto component manufacturers are also upping the ante on localising EV parts, either through full ground-up development or through technology licences. This will lead to enhanced optimisation of costs and in turn EV affordability.
Let’s take a look at the status of India EV Inc's sales, segment-wise, in the current fiscal’s first five months.
ELECTRIC TWO-WHEELERS
April-August 2024: 418,970 units, up 25% YoY
FY2024: 948,444 units
Headed for a million units both in FY2025 and CY2024
The e-two-wheeler segment remains the biggest volume driver of the EV industry. In the April-August 2024 period, it accounts for 57% of total India EV Inc's volumes of 732,893 units. Like the e-three-wheeler industry, e-two-wheeler OEMs have been impacted by the now-reduced subsidy which saw most EV makers hike product prices. While this can somewhat dampen demand, the wallet-friendly long-term USP of an EV remains a big draw when compared to the high price of petrol, which currently costs Rs 103.44 a litre in Mumbai (on September 8) and CNG at Rs 75 per kg.
This segment, which delivers the maximum volumes for India EV Inc, is well on its way to sell over a million units for the first time both in a fiscal as well as a calendar year in CY2024. The current fiscal’s first 5 months sales at 418,970 units are 44% of FY2024’s record 948,444 units and 8 months into the calendar year, total retails at 592,646 units are already 69% of CY2023’s record 860,365 units.
In terms of market dominance, Ola Electric is the No. 1 OEM with a huge lead over its rivals. However, there is an intense battle currently underway for the No. 2 position between two legacy players – TVS Motor Co and Bajaj Auto. Both TVS and Bajaj entered the e-two-wheeler market in the same month (January 2020) with a single product, the TVS iQube and Bajaj Chetak respectively. Ather Energy and Hero MotoCorp are ranked fourth and fifth. The Top 20 e2W OEMs table below reveals just how the key players have fared in the first eight months of CY2024.
ELECTRIC THREE-WHEELERS
April-August 2024: 273,340 units, up 13% YoY
FY2024: 632,621 units
Headed for record sales in FY2025, 43% of FY2024 retails already achieved
Though the e-two-wheeler segment is the largest in terms of volumes, e-three-wheelers are witnessing the fastest shift to electric mobility. At 37%, it is the second-largest contributor to India EV Inc's sales. Combined three- and two-wheeler sales together account for 94% of India EV Inc's total sales.
In the April-August 2024 period, 488,731 three-wheelers spanning CNG, LPG, petrol and electric powertrains have been sold. At 273,340 units, e-three-wheelers comprised 56% of that total, which means every second unit is an EV. And, with seven months to go in the current fiscal, this sub-segment has already achieved 43% of FY2024’s record sales of 632,621 units. That leaves 359,281 units to be sold between September 2024 and March 2025 or a monthly average of 44,910 units.
The electric three-wheeler segment, which hit a monthly retail sales high of 63,630 units (up 18%) in July 2024, has recorded sales of 60,717 units in August 2024, up 7% year on year, as per Vahan retail sales data. August was the mid-month of the ongoing three-month Electric Mobility Promotion Scheme 2024 (EMPS) scheme valid from July 1 through to September 30, 2024. This means September could just see the e-three-wheeler industry record a new monthly sales record.
The electric three-wheeler market has all of 520 OEMs and counting! While Mahindra Last Mile Mobility remains the market leader, the dark horse in this segment is an aggressive as well as disruptive Bajaj Auto. The company, which is the overall three-wheeler market leader, was a late entrant into the e3W market in June 2023 but it has quickly captured demand and grabbed No. 2 position in August 2024 for the first time. YC Electric and Saera Auto are two other manufacturers which clock strong numbers every month.
ELECTRIC PASSENGER VEHICLES
April-August 2024: 37,472 units, up 3% YoY
FY2024: 91,271 units
41% of FY2024 retails already achieved
Mirroring the overall trend in the passenger vehicle market, retail demand for electric vehicles remains under pressure. In August, sales fell by 10% YoY to 6,474 units and 18% month on month (July 2024: 7,948 units). August e-PV retails are the lowest monthly numbers in the first eight months of the year.
On the cumulative sales front, retails for the first five months of FY2025 at 37,472 units are up by 3% YoY and 41% of FY2024’s 91,271 units. For the first eight months of CY2024, e-PV retails at 63,227 units are already 76% of CY2023’s total sales of 82,494 units. With four months still to go in CY2024, the e-PV industry will surpass the 100,000 retail sales milestone for the first time.
Electric passenger vehicle market leader Tata Motors, which has the largest portfolio comprising the Nexon EV, Tigor EV, Tiago EV, Xpres-T (for fleet buyers), Punch EV and the recently launched Curvv EV, remains the market leader but its market share has declined to 64-odd percent (from the high of over 70% a year ago), reflecting the increased competition in the marketplace.
Total retails for the first eight months of CY2024 at 62,931 units are up 18% YoY (January-August 2023: 53,491 units) and are already 76% of CY2023’s total sales of 82,494 units. With four months still to go in CY2024, the ePV industry will surpass the 100,000 retail sales milestone for the first time in a calendar year.
ELECTRIC COMMERCIAL VEHICLES
April-August 2024: 3,111 units, up 53% YoY
FY2024: 8,566 units
36% of FY2024 retails already achieved
Demand for zero-emission commercial vehicles continues to rise in the Indian automobile market. As per the latest retail sales data sourced from Vahan, a total of 3,111 electric CVs have been sold between April and August 2024, up 53% year on year. This constitutes 36% of FY2024’s total retails of 8,566 units.
For the current calendar year, combined first eight-month sales of 7,101 units have already surpassed entire CY2023’s deliveries of 5,011 units and could be headed towards over 10,000 units in CY2024.
The CV sector essentially comprises light-, medium- and heavy-duty goods carriers and passenger-transporting buses. As compared to personal electric mobility in the form of e-two-wheelers and passenger vehicles, the CV industry is where electric mobility makes wallet-friendly TCO sense given the much larger number of kilometres driven.
In terms of OEM sales, Tata Motors is the strong e-CV market leader, which can be attributed to the launch of the new Ace EV 1000 small mini-truck in May this year. This zero-emission SCV offers a higher rated payload of one tonne and a certified range of 161km on a single charge. Targeted at last-mile mobility providers, the newest variant of the Ace EV has been developed to address evolving needs of sectors like FMCG, beverages, paints and lubricants, and dairy.
EV-OLUTION OF THE INDIAN ELECTRIC VEHICLE INDUSTRY
India, which is the third-largest automobile market in the world, is among the global markets which are aggressively driving awareness and adoption of EVs as a countermeasure to its serious air pollution problem. As is known, India is home to 14 of the 20 most polluted cities in the world. By 2030, the government has targeted EVs to account for 70% of commercial vehicle sales, 30% of passenger vehicles, 40% of buses and 80% of two-wheelers and three-wheelers.
The past four-odd years have shown how India EV Inc has evolved when it comes to the overall electric mobility ecosystem. From the growing number of new EVs being launched, the enhanced level of R&D, significant investment from component manufacturers in making EV parts and creating a robust supply chain, gradual expansion of EV charging infrastructure through to exclusive EV retail showrooms from OEMs and both the Central and most State governments rolling out EV-friendly policies for EV manufacturing as well as EV buyers, the EV market dynamic is here to stay in India.
The initial cost of an EV compared to a conventional internal combustion engine remains 25-30% higher mainly due to the battery cost but as technology evolves, localization levels increase and OEMs benefit from economies of scale, EV costs are bound to rationalise and EV-ICE vehicle price parity could be foreseen in the not-so-long-term future in India.
What’s more, e-mobility is no longer an urban India phenomenon and has now spread to town and country as scores of vehicle users recognize the wallet-friendly nature of EVs while also contributing to eco-mobility. There remain challenges in the form of inadequate EV charging infrastructure in certain parts of the country but efforts, from both the public and private sectors are underway, to invest more and expand the network.
What India EV Inc remains confident about is the growing adoption of electric mobility by both individual buyers and also commercial operators, along with the considerable potential of exports of both made-in-India EVs and EV components.
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