EV Sales in India is expected to Increase at nearly 68 percent CAGR during 2022-2026

Published  December 29, 2021   0
Soumen Mandal

The electric vehicle(EV) industry in India is moving at a rapid pace as per the government authorities because various schemes and initiatives have been unveiled for the past few years. But, experts feel that the segment in India is still at the nascent stage, which has just started catching momentum. First of all, people need education and understanding regarding the pros of EVs and how it will help them in the future. Somehow the mindset to adopt EVs is still missing. After this people will themselves understand the new technology associated with it. The EV sector is also linked with various challenges that need to be taken into consideration before thinking of escalating the volumes of electric cars. For instance, inadequate charging stations and increasing demand for electricity could pose a huge problem. In this regard, Soumen Mandal - Research Analyst (IoT-Automotive & Devices Ecosystem) at Counterpoint Research highlighted the current challenges the EV sector is facing in India, where and how it is leading the global race, and also how new and various kinds of technology will play an important role in boosting this industry in India.

Q. When compared to other developed countries, where do you currently paint the picture of the Indian EV sector? Where do you see its growth in the coming few years?

The industry is trying hard to accelerate with 100 percent possible FDI coupled with new manufacturing units, and an augmented aim to enhance the battery charging infrastructure. Policies and subsidies unleashed by the government are also magnetizing for higher discounts for electric two-wheelers manufactured in the country and steps are likely to be taken to uplift the domestic ACC battery storage production. But the actual reality is that the EV sector in India is currently at a nascent stage which is catching momentum as the sector is witnessing a lot of new investment from the government and private investors. Taking the two-wheeler, three-wheeler, and passenger car into account, EV sales in 2021 is just 2 percent of the total vehicles sales in India which is expected to increase at nearly 68 percent CAGR during 2022-2026. It is said that the automobile industry in India is fifth largest country on the planet and it is speculated that towards the end of 2030, the sector would be ranked third.

Q. What do you think are the major challenges for the EV industry in India and what are the current solutions required to boost the sector in India?

There are many challenges which the EV industry in India is facing. A few of them are lack of proper charging infrastructure, lack of proper awareness, higher pricing, and range anxiety among consumers. When a person buys an EV, he/she thinks how many kilometers the vehicle can run and where to charge if the battery runs out of power. Though, the Government policies have promised to make a strong network of EV chargers that will take time and a lot of investment. Moreover, the sale of EVs and chargers are like a chicken-egg problem that can only be overcome by proper awareness and investments. According to a report of the Central Electric Authority, by June 2020 India has installed only 927 charging stations, which is quite less as compared to the 57,000 petrol stations in the country across numerous states. Apart from this, more than 85 percent of charging cars take place at individual homes, which becomes extremely difficult for those who live in a society where there are no proper parking areas. Most importantly, if the target is reached to an extent by 2030, it will increase the demand for electricity to 100TWh, which is yet not discussed by the authorities.

Q. Which are the countries leading the race in EVs both in terms of two-wheelers and three-wheelers and why?

In terms of electric two-wheelers and three-wheelers, the APAC region is ahead in the EV race. Among APAC, China, Vietnam, Thailand, Indonesia, and India are a few countries that are leading the race. The APAC region does not have high disposable income like the Western countries which pushes most of the population towards two-wheelers. The two-wheelers cost less than cars and suffice for the basic purpose of transportation too. The three-wheelers are preferred for short-distance ride-sharing. As the sale of two-wheelers and three-wheelers are more, transitioning the conventional vehicles to electric automatically puts the APAC region ahead of the race than the west where the penetration of four-wheelers is more.

Q. What is the importance of technology in boosting the EV sector? How much importance do you think India is giving to technology that can boost the EV sector?

According to us, the development of composite charging infrastructure and better batteries that provide more range are two important technologies that are boosting the EV sector.

Currently, India has some incentive system for the charging infrastructure development and the battery development will soon begin. Innovative technology always plays an important role in boosting any industry, but people must note that a technology that works extremely well in one region or an area might not work well in another. Hence, driving scenarios, conditions, terrains, and availability of infrastructure resources and supply chain management play a pivotal role in selecting the desired technology. Many electric vehicles are also appearing smart coupled with AI and IoT. People can now control their cars or any vehicles via app and smartphones. Connected vehicles are gaining huge traction all over the world. 

Q. Kindly highlight some of the unique technologies driving the growth of EV globally and also highlight some of the cutting-edge technologies that would be deployed in EVs in the coming years?

EVs are subject to constant innovation and development which makes the cars in upcoming days more smart, intelligent, and energy-saving. Apart from better battery development, the autonomy technology (Adaptive Cruise Control), obstacle detection, change in energy usage as per the type of driving are a few techs which is the reason for the rise in EV sales. Apart from the technology, we should also highlight the increased awareness for climate change which is also pushing many people to change their vehicles to EVs. In the coming years, we can expect to see solid-state batteries in the game which can provide more power and weigh lighter than the ones used currently. We will also experience an increased level of autonomy of the cars (like partial to nearly complete automated driving) with stronger radars and even Lidars which increases the precision of autonomy.

Q. Where do you paint the picture of AI and IoT on EVs? How much importance should be given to these technologies for electric cars?

With the increasing adoption of IoT in EVs, vehicles will be smarter and safer. Connectivity will play a crucial role in infotainment, e-call, vehicle diagnostic data, and autonomy. As the automotive industry is transforming towards smart EVs, vehicles will generate more data. AI and edge computing will be required for managing this huge amount of data. EVs and IoT will go hand in hand for the next generation of vehicles.