The journey of a thousand miles begins with a small step. This Chinese proverb, probably dating as far back as 6th century BC, accurately captures the genesis of momentous change – in any field. This year, India’s EV industry appears to have taken that crucial step.Of course, the industry’s base is still statistically negligible – even when the sales dataset is magnified under an electronic microscope. But it is expanding, pointing perhaps to the biggest change in mobility since gasoline-fired engines replaced horse-drawn carriages at the turn of the 20th century in Europe’s richer neighbourhoods and the eastern seaboard in North America.
In fact, in the first half of FY22, EV sales have more than tripled to 1.18 lakh units while a chip shortage of prodigious dimensions has squeezed the sales growth of ICE (internal combustion engine) cars.
New EV launches led by Tata Motors and electric two and three wheelers have been providing the required impetus. Until September, electric two-wheeler sales stood at 58,264 units and three-wheelers at 59,808 units as per data compiled by policy body, Centre for Energy Finance at Council on Energy, Environment and Water at Centre for Energy Finance (CEEW-CEF).Experts attribute the surge to both demand- and supply-side factors. Outreach by manufacturers, improved charging infrastructure, price parity with conventional vehicles due to federal incentives and falling battery prices are driving sales.
“Incentives and various initiatives have aided growth as we continue to see a hockey stick kind of a growth going forward,” says Naveen Munjal, MD, Hero Electric. “It is only a matter of time where various states apart from the ones that rolled out individual incentives will also come up with sops to make EVs an attractive option.”
India has already sold 1.18 lakh EVs, which is 90% of the total sales last FY.
“Financial incentives by the Centre and state governments are attracting new EV buyers whereas rising fuel costs are increasing the operational expenditure for ICE vehicle owners,” said Rishabh Jain, programme lead, CEEW-Centre for Energy Finance.
Initially, the biggest demand for EVs came in from the commercial segment. The last few months have seen a sea change.”With better awareness and acceptance for EVs, there is traction even from the rural markets in the non-commercial segment too,” said Sulajja Firodia Motwani, CEO, Kinetic Green Energy & Power Solutions. Targeted access to funding is needed for the industry to expand.
We need to work hard to ensure infrastructure, supply, and financing. FAME II is very helpful on the financing piece, but there needs to be more specialised financing, maybe EV funds, platforms… more debt,” said Mahua Acharya, MD of state-owned Convergence Energy Solutions Services (CESL).
Tata Motors continues to see traction for its EVs in personal mobility – Nexon and Tigor.