Tata Power EV charging stations are located on 350 of India’s 600 highways.
Puneet Vikram Singh, Nature and Concept Photographer, | Torque | Getty Images
When most people think of electric vehicles, they think of cars.
From brands like Tesla Spirit Rivian in the United States two Nine Spirit XP money In China, global sales of electric vehicles have skyrocketed. Two million electric vehicles were sold in the first quarter of 2022 alone – a significant jump from a decade ago, when just 120,000 cars were sold worldwide, the International Energy Agency reported.
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India is different. The United States and China have focused on the adoption of electric vehicles. But in India, the fifth largest economy in the world, two-wheeled vehicles such as scooters, mopeds and motorcycles dominate the market.
James Hong, head of mobility research at Macquarie Group, said that two-wheelers are more in demand than cars in India, and that shouldn’t come as a surprise.
Underdeveloped road infrastructure and lower personal income make it more convenient and affordable for people to own scooters, motorcycles or mopeds rather than cars, Hong said.
Nevertheless, acceptance remains low.
EVs account for only about 2% of total car sales, but the Indian government has ambitious targets to increase EV adoption over the next decade and is focused on increasing two-wheeler purchases.
According to Bain & Company forecasts released in December, sales in India are expected to increase by 40% to 45% by 2030, when 13 million new vehicles will be sold annually.
India’s four-wheel drive sector is projected to grow by just 15% to 20% by 2030, with 1 million new vehicles sold annually, the consultancy said.
Growth of India’s four-wheel drive EV segment is expected to be slower as the cars are largely owned only by drivers who drive longer distances out of town, said Arun Agarwal, deputy vice president of equity research at Kotak Securities.
Bain & Co. forecasts that total sales across the Indian electric vehicle industry supply chain will generate $76 billion to $100 billion by 2030.
Reduce costs to increase adoption
People in India have long preferred two wheels over four, and the country is home to more than 10 startups serving the market, Agarwal said.
For India to increase purchases of two-wheelers, they need to be cheaper and there needs to be more charging infrastructure, Jinesh Gandhi, an equity research analyst at Motilal Oswal Securities, told CNBC.
Gandhi said that 90% of two-wheelers with internal combustion engines cost between 70,000 rupees ($845) and 140,000 rupees ($1,690). The starting price for electric two-wheelers can go as high as 160,000 rupees.
EV costs will fall as battery prices fall, Kotak’s Agarwal said.
High inflation and disrupted supply chains have pushed dough prices higher in 2022, Bain & Co. said. Costs would need to drop another 20% to 30% for EVs to compete with internal combustion engine vehicles.
Arun Kumar, chief financial officer of two-wheeler EV maker Ola Electric, said it’s a “myth” that electric vehicles are more expensive than internal combustion engine vehicles because the “life cycle cost of an electric vehicle is lower” than a two- or four-wheeler. Wheeled vehicle that runs on fuel.
Ola Electric’s two-wheeled scooters and upcoming motorcycles and four-wheeled cars all range in price from $1,000 to $50,000.
That means the amount of money EV owners can save on fuel and maintenance costs can offset the higher purchase price, he said.
Ola’s two-wheel scooters, an upcoming motorcycle and a four-wheel passenger car cost between $1,000 and $50,000, he said.
“There is no going back [internal combustion engine] Vehicles. It’s a single direction,” added Kumar.
Central and state governments in India have created incentives to encourage consumers in India to switch to electric vehicles, Kotak’s Agarwal said.
According to the International Energy Agency, government programs have allocated funds to increase the production of electric vehicle public buses and taxis and increase the number of charging stations across India.
EV owners also receive a road tax exemption at the time of purchase and receive a deduction from their income tax, according to the Accelerated e-Mobility Revolution for India’s Transportation.
Including taxes, owners of two-wheeled internal combustion engine vehicles in India typically pay 3,000 rupees a month for their vehicle, Kumar said. Government initiatives coupled with fuel savings would therefore result in the monthly rate for a vehicle becoming largely free for a customer, he said.
With the growing acceptance of electric vehicles, charging infrastructures will also increase across the country. That remains a factor discouraging people from moving away from high-carbon vehicles, Kotak’s Agarwal said.
“If you get stuck on the road, you have no choice but to have the vehicle towed to the nearest charging station, which is time-consuming and expensive,” Gandhi said.
India’s charging infrastructure needs significant expansion to support the number of EV companies that will hit the streets, according to Bain & Co. The report said several companies have made early investments and committed to increasing charger availability .
Tata Power said it has built approximately 2,500 charging stations in over 300 cities and towns in India.
One of them is Tata Power, India’s largest privately owned power generation company.
Tata Power claims to have built about 2,500 charging stations in 300 cities and towns in India. They can be found on 350 out of 600 highways in the country, said Virendra Goyal, the company’s director of business development.
Many EV owners suffer from “range anxiety” when the distance between charging stations is too great, and bridging the gap would encourage more drivers to switch to e-mobility, he said.
The company aims to have 25,000 chargers across India by 2028, Goyal said.
Correction: This article has been updated to reflect exactly where India ranks among the largest economies in the world. A previous version reported its ranking incorrectly.