Charge Forward: The Future of Driving is Electric

The Electric Vehicle market has offered numerous ways that are reshaping the automotive industry and driving the transition towards sustainable transportation solutions. One key benefit of EVs is their lower running costs compared to petrol and diesel-powered cars, with reduced maintenance expenses due to fewer moving components. EVs emit zero polluting gases, contributing to a cleaner environment and reduced carbon footprint. Owners of electric vehicles enjoy tax benefits, lower road tax, and registration fees, providing financial incentives for EV adoption. EVs are convenient to drive, gearless, and offer easy charging options at home, avoiding the need for frequent visits to fuel stations also providing a comfortable driving experience, with ample cabin space and storage options. Importantly, EV owners are shielded from fuel price hikes, ensuring cost stability and peace of mind.

MARKET OVERVIEW

The electric vehicle (EV) market is experiencing significant growth globally, with key technologies such as battery technology, electric motors, vehicle-to-grid (V2G) technology, autonomous driving, and solid-state batteries driving innovation and market expansion. The global electric vehicle market is valued at USD 392.4 Billion in 2023 and is projected to reach a value of USD 1259.4 Billion by 2032 at a CAGR of 13.9 % between 2024 and 2032 .The Asia-Pacific region dominates the market share, with the EV market volume reaching 24.8 million units in 2023 and expected to grow at a CAGR of over 10% Key developments in the EV industry include Hyundai Motor Company revealing the  concept , General Motors expanding its EV technology platforms, Mitsubishi Fuso Truck delivering all electric e -Canter trucks to Australia Post, and BYD Company Limited and Toyota Motor Corporation forming a joint venture for battery electric vehicles . The COVID-19 pandemic impacted the automotive industry, including the EV market, but post-pandemic recovery saw a surge in sales of battery electric vehicles (BEVs) and hybrid electric vehicles (HEVs) The market is witnessing rising demand for fuel-efficient, high-performance, and low-emission vehicles, with buyers increasingly inclined towards battery-powered or hybrid automobiles due to environmental concerns and lower maintenance costs compared to traditional fuel-based vehicles. The EV market is expected to continue growing due to increasing investment in electric mobility, government support for vehicle electrification, declining battery prices, and the launch of new EV models by original equipment manufacturers (OEMs)

SHIFTING GEARS: TWO WHEELER INDIAN MARKET ZOOMS AHEAD

The electric two-wheeler (E2W) market in India is experiencing a remarkable surge, with sales reaching new heights in recent quarters. In Q3 FY 2024, E2W sales grew by an impressive 34.42% compared to the previous quarter and 11.16% year-over-year. This upward trend is expected to continue, with 76,301 units already sold in Q4 FY 2024, showcasing the growing demand for eco-friendly and cost-effective mobility solutions.

The Indian E2W market has come a long way, with sales from just 2,000 units in 2014-15 to  12 lakh units by December 2023. 

The E2W market in India is dominated by low-speed E2Ws (L1 category), which account for 65.2% of total sales. This segment caters to the needs of urban commuters and last-mile delivery services, offering a practical and cost-effective solution for navigating congested city streets. The high-speed E2Ws (L2 category) make up the remaining 34.8% of the market, appealing to those seeking a more powerful and feature-rich riding experience.

The competitive landscape of the Indian E2W market is led by Ola, which holds a 26% market share, followed by TVS (14.5%) and Hero Electric (12.5%). These leading players have been at the forefront of innovation, introducing new models with improved battery performance, extended ranges, and attractive designs to cater to the evolving preferences of Indian consumers.

The growth potential of the Indian E2W market extends beyond domestic sales. The industry is anticipating a significant boost in exports, with projections indicating that E2W exports from India could surpass $28-30 million by 2030, growing at a CAGR of 10-12%. This export potential highlights the competitiveness of Indian E2W manufacturers in the global market and their ability to meet international quality standards.

LATEST INNOVATIONS BY COMPANIES

Tesla: The Company’s advancements in autonomous driving technology, particularly with its Full Self-Driving (FSD) system, have set it apart from competitors. Tesla's over-the-air software updates continuously improve vehicle performance and introduce new features, enhancing the driving experience for customers. Tesla's focus on long-range capabilities, exemplified by models like the Model S Plaid with over 520 miles of range, showcases its commitment to pushing the boundaries of EV technology.

BYD (Build Your Dreams): BYD has made significant strides in battery technology, positioning itself as a leader in the industry. The company's Blade Battery technology offers enhanced safety and energy density, setting it apart from traditional lithium-ion batteries. BYD's integration of solar panels in some vehicles, like the Han EV, demonstrates its commitment to sustainable energy solutions. 

Toyota: Toyota, a first in hybrid vehicles, has expanded its electrification efforts with a focus on fuel cell technology. The Toyota Mirai fuel cell vehicle exemplifies the company's commitment to hydrogen-powered transportation. Toyota's advancements in fuel cell technology, offering long-range capabilities and quick refuelling times, differentiate it from competitors in the EV space. Additionally, Toyota's investment in battery technology, with plans to introduce solid-state batteries in its EV line-up, states its dedication to innovation and sustainability.

Volkswagen:  Models like the ID.3 hatchback, ID.4 crossover, and ID. BUZZ van showcase Volkswagen's diverse EV line-up. The company's goal to sell 1 million EVs annually by 2025 reflects its ambitious targets in the EV market. Volkswagen's investment in EV production facilities and charging infrastructure, coupled with its emphasis on sustainability and clean mobility, position it as a key player in the transition to electric transportation.

Nissan:  The Nissan Leaf, has been a frontrunner in EV innovation. The Leaf's affordability, practicality, and long-range capabilities have made it a standout choice in the EV market. Nissan's expansion into other EV segments, such as the e-NV200 electric van and the upcoming Ariya crossover, demonstrates its commitment.

UNLOCKING POTENTIAL

The government and manufacturers have undertaken several initiatives to boost the electric vehicle (EV) market in the country. The government has launched the FAME India scheme to promote the adoption of electric and hybrid vehicles, providing incentives for the purchase of electric vehicles and supporting the development of charging infrastructure. Additionally, the government has approved a Production Linked Incentive (PLI) scheme for the Advanced Chemistry Cell (ACC) battery storage sector to attract investments and enhance domestic manufacturing capabilities. Furthermore, the government has reduced the Goods and Services Tax (GST) on electric vehicles from 12% to 5%, making them more affordable for consumers, and introduced an income tax deduction of up to ?1.5 lakh on the interest paid on loans taken for the purchase of electric vehicles.

Manufacturers have also played a significant role in driving the growth of the EV market. Major automobile manufacturers like Tata Motors, Mahindra & Mahindra, and MG Motor have invested heavily in setting up EV manufacturing facilities in India. These companies have launched several new electric vehicle models in the Indian market, catering to different segments such as passenger cars, two-wheelers, and three-wheelers. To support the growth of the EV market, manufacturers have also expanded their charging infrastructure by partnering with charging infrastructure providers to set up charging stations across the country. This has made it easier for EV owners to charge their vehicles, reducing the range anxiety associated with EVs. Moreover, companies like Ola Electric and Bounce have introduced battery swapping services, allowing users to swap their depleted batteries with charged ones at designated stations, reducing the need for long charging times.

These initiatives, along with increasing consumer awareness and the growing popularity of electric vehicles, are expected to drive the growth of the EV market in India in the coming years. The government's support through policies and incentives has created a favourable environment for manufacturers to invest in the EV sector, leading to increased production and sales of electric vehicles. As a result, India is poised to become a significant player in the global EV market, with the potential to reduce its carbon footprint and contribute to a cleaner and more sustainable environment.

FUTURE OF EV IN INDIA

The future of EV Cars that will run on in India has a prospect for significant development and evolution. In contrast, the government has come up with their own targets that are destined to be challenging, such as the goal of 30% electric vehicles by 2030, which will result in a huge growth in the EV market. The Economic Survey 2023 projects a 49% compound annual growth rate (CAGR) of EV market within India between 2022 to 2030.  It can be assumed that the figure will be surely achieved.  By 2030, there are estimated to be 10 million EV sales annually. This growth is owed to development of consumer demand, scientific improvements in battery technology, in addition to the establishment of a charged network. The government has definitive tact through its budget allocations, such as the Rs 35000 crore invested in the Union Budget 2023 for capital expenditure which is aimed at triggering energy efficient infrastructure and the adoption of EVs. 

Electric Vehicles will meet country’s fuel demand drastically decreasing the import of 156 million tonnes of oil equivalent rupees 3. Keeping 43 trillion by the year 2030, this market in the healthcare industry is estimated. In addition, EVs provide a cleaner and “greener” way of travelling and thus, they meet global goals to mitigate climate change and reduce pollutants. Besides that, the fact is that today battery cost, which makes up a larger part of the electric vehicles' price, has fallen from USD1,000 per watt-hour to about USD 150 per watt-hour and this fall process is still going on with an incredible pace over the last ten years.  

ROADBLOCKS FACED BY EV COMPANIES

Prohibitive to Electronic vehicle manufacturers is one of the main problems, which is the high expense of building such vehicles especially in the lighting field of battery technologies. Batteries of electric vehicles need them to be charged to a considerable extent, and that costly raw materials have to be used for building them. While EV operating costs may be lower than that of gasoline-powered vehicles, high upfront purchase cost is an important factor that limits the potential EV market especially for those without finance for the purchase below $30,000. Range Anxiety that is a common issue/ barrier to consumers who are contemplating EVs is a true concern.  With most EVs range and same with the range of 200-300 miles on a single charge in temperate conditions, the fear of running out of charge is the central challenge which the lack of a charging station creates. This problem becomes worse during winter, when power loss is a possibility on cold days in which the vehicle’s range is reduced as a result. Both the presence of and approximately ‘Most of the power stations where vehicles are rapidly charged allow for the relief of range angst and promote electric vehicles However, the variability of EV models has for sure grown over the years, but they are still not as many as in the traditionally filled with gasoline-powered cars. The market share of cars, SUV is constantly growing, but dealers still not have a wide selection of trucks and vans choices. To extend the E-vehicles market by satisfying diverse consumer preferences, it is important to provide the product line with a variety of EV models also Insufficiency of charging station in many regions remains a real problem for those who want to purchase EV. Although most of public charging standstills are Level 2 chargers, it can take a relatively long time to charge an EV in order to have a long journey. In addition to that, the existence of fast-chargers should be a prioritized issue in order to solve this challenge, since these fast chargers play a vital role in the comfort and usability of electric vehicles for consumers 

These difficulties emphasize the fact that companies dealing the EV industry are kind of walking on thin ice for they are expected to catch the barriers that are related to price, mileage, vehicle choice, and charge infrastructure in order to promote the marketability of electric vehicles. The future of EVs in India is promising, with a strong foundation laid by supportive government policies, increasing consumer interest, technological advancements, and a growing ecosystem of EV infrastructure. This transition towards electric mobility not only addresses pressing environmental concerns but also presents a significant opportunity for economic growth, job creation, and a more sustainable transportation sector in India.