Why are two-wheelers so popular in India?
There is no single contributor to the popularity of two-wheelers in India. Rapid urbanization, growing household income, and underdeveloped public transportation infrastructure made two-wheelers the obvious option for most daily commuters. Unfortunately, increasing numbers of automobiles on the streets made Indian cities some of the most congested and polluted in the world. The government and the industry see electric two-wheelers as part of the solution. It was estimated that, by financial year 2031, the market size of electric two-wheelers could reach 22 million units.What about other EVs?
The electric cars market is divided into passenger and commercial segments. Commercial electric vehicles are still a relatively niche market. But the passenger segment has seen some strong developments. In this segment, Tata holds most of the market, offering some of the most popular EVs in India. Electric three-wheelers also have seen a similar growth trajectory during the last few years, reaching a market volume of more than half million units in 2023. Most of the three-wheelers are used commercially as e-rickshaws and goods carriers. Coincidently, this segment is also led by a conventional automobile manufacturer, Mahindra.Challenges facing the Indian EV industry
The foremost issue for EV adoption in India is the charging infrastructure. It is relatively easy to charge one’s own electric scooter, but charging an electric car is another story. Dedicated EV stations or conventional gas stations with EV chargers were the preferred public charging location for EV in India. But in most states, the number of public charging facilities was still quite low. It is the same with gas stations equipped with charging facilities. From a manufacturing perspective, most batteries used in EVs sold in India are made in China and Korea, which increases costs significantly. It was estimated that by 2030, the demand for EV batteries in India would reach 179 GWh.The Indian government has taken several measures to counter these challenges and incentivize domestic manufacturing of EVs and batteries. Two Production Linked Incentive (PLI) schemes outline expenses towards production of advanced automotive technology products and increase domestic production of batteries. These account for almost 260 and 180 billion rupees respectively. Various other minor policies, including a reduction in GST and exemption of permits for EVs, have also been introduced to encourage EV sale and use.
