Over the past few years the Indian EV industry has witnessed decent growth. The EV industry sold 236,802 electric vehicles In FY 21 as compared to 295683 units in FY20, including electric two-wheelers (E2W), electric three-wheelers (E3W) and electric four-wheelers (E4W).
In the E2W segment, the industry registered sales of 143,837 units, which include 40,836 high-speed and 103,000 low-speed E2W. The sales of E2Ws declined by 6% in FY21, having registered sales of 1,52,000 units in the FY20. The E3W segment registered sales of 88,378 E3W as against 140, 683 units sold in FY20. The data doesn’t include E3Ws that are not registered with the transport authority. In the E4W segment, the industry witnessed registration of 4,588 units compared to 3,000 units in FY 20.
Commenting on the sales report, Mr Sohinder Gill, Director-General, Society of Manufacturers of Electric Vehicle (SMEV), said,
“We were anticipating a good growth before the start of FY 21, but sales remained stagnant due to various reasons. The sales in electric three-wheeler and two-wheeler segment stood low as compared to last year. A good thing has happened that people started moving towards advanced batteries i.e. lithium. The city speed and high-speed category in the two-wheeler segment have witnessed growth. However, a lot more needs to be done to achieve the target under the FAME II scheme. Timely intervention by the government in a form of policy change is required to fuel the growth and achieve the target by the end of FY22.”
A strong bank finance mechanism is still missing in the country. Only a few banks like SBI and Axis, to name a few, are offering loans on selected models. The government should ask banks to offer loans on electric vehicles, which will augment sales.
Another important factor that would transform the industry is creating awareness about green vehicles. The Central and state governments can play a crucial role in motivating and encouraging citizens to adopt e-vehicles. We have seen in the case of Delhi wherein the state government is doing a tremendous job in creating awareness, which has encouraged more people to adopt EVs.
India’s e-commerce sector has shown a steep growth curve of growing over 200% YOY, hence its dependence on logistics increases proportionately. One major reason for the growth in EV adoption by B2B players is the cash factor – electric vehicles are cheaper to maintain compared to ICE vehicles. Corporates in India are also proactively transitioning towards electric vehicles. For instance, Amazon India and Flipkart have announced that they will deploy EVs in their fleet of delivery vehicles. The future of the B2B is positive and we will see a lot of traction coming from this segment for the next 2-3 years.
State Government policy
Many states, including Delhi, Maharashtra, Andhra Pradesh, Bihar, Chandigarh, Haryana, Karnataka, Kerala, Madhya Pradesh, Odisha, Meghalaya Punjab, Tamil Nadu, Telangana, Uttar Pradesh and Uttarakhand have rolled out their EV policy. However, some states are yet to implement the policy. The early implementation of state-level policy could assist in creating a larger ecosystem in the country that would help the industry to grow at a much faster pace. Additionally, the state government policy should be focused on demand generation for the initial period that would help in getting more volumes on the road.
We have seen rapid movement here. Around, 1,300 charging stations have been set up till now. Many corporates have ventured into the segment and started installing charging stations across the country. We anticipate that in the next 5-6 years, we would be able to create robust charging infrastructure in the country.
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