India’s EV market has the potential to achieve $100 billion in revenue by 2030, said a report by Bain & Co and Blume Ventures. The report also stated that the EV market can realise 40 percent penetration in the next seven years, a substantial increase from the current 5 percent penetration in the country.
This growth will be attributed to string adoption of e-two wheelers and e-three wheelers. Four wheeler penetration is expected to grow by more than 20 percent, according to the report. However, to achieve this, significant infrastructure challenges, distribution, software development, etc need to be addressed promptly.
Compared to other major countries, India currently lacks good charging infrastructure. The country currently has 200+ EVs per charging point. Whereas, the US has 20 and China has less than 10.
“India needs both slow and fast-charging infrastructure, through establishing more charging points in existing EV areas, as well as widening pin-code coverage to reduce range anxiety,” said the report.
India’s 2W EV penetration has potential to jump from approximately 5 percent today, to 45 percent+ by 2030. However, realizing this massive opportunity requires OEMs to have a multipronged development agenda, supported by key unlocks at the EV ecosystem and policy levels.
“Building the same ecosystem in India will be challenging, since OEMs are unlikely to standardize their batteries in the near term. Instead, swapping players will need to maintain inventory for top SKUs across OEMs and identify customer segments to target (e.g., delivery platforms with large fleets of 2W EVs or retail customers with EVs from the top four or five OEMs). OEMs also need to strike “walled-garden” partnerships with battery-swapping players to support swapping-enabled 2W EV models,” said the report.
The India EV market experienced an increase in investment in the past two years, with $1.5–$2B of capital raised in 2021 and 2022 – a substantial increase from the years before (less than $0.5B). These investments have mainly been directed into OEMs such as Tata, Mahindra, Ola, and Ather, among others.
“Going forward, India needs significant investor support to realize the $100+ billion EV opportunity. As the landscape evolves, investors need to evaluate potential assets based on five criteria: sustainable competitive advantage, GTM and distribution capabilities, customer feedback/brand perception, talent and culture, and manufacturing and supply chain strategy,” mentioned the report.