Page 176 - CW E-Magazine (13-2-2024)

Special Report

Electric Vehicles: Revving up despite roadblocks

Synopsis emissions, contributing to the govern-
alendar Year (CY) 2023 re- ment’s environmental goals. The mas-
corded signifi cant growth as sive adoption of EVs can boost battery
Cthe sales volume of electric technology and infrastructure, further
3W
vehicles (EVs) surpassed 1.5-mn, a 50% 38% 2W enhancing the EV ecosystem. These
increase compared to CY22. Total EV 56% incentives reduce the upfront cost of
volume sold was recorded at 1.53-mn in vehicles, making them more attractive
CY23, compared to 1.02-mn in CY22. CV to consumers. As the industry evolves
Growth was driven by the increasing 1% with new policies like the Production-
PV
adoption of EVs and several exciting 5% Linked Incentive (PLI) scheme, it is
new EV models across segments giving important to address existing concerns
Fig. 1: Category-wise EV sales [CY23]
better options. Source: Centre for Monitoring Indian Economy and ensure faster sustainable growth for
(CMIE), Vahan, and CareEdge. the Indian EV sector.
The overall EV share of auto sales in engine (ICE) counterparts, and policy
India has increased to 6.38% in CY23, revisions such as those witnessed in 14
12
from 1.75% in CY21, i.e., in just two FAME II – the growth trajectory of EVs 10
years. Category-wise, two-wheelers persists across various segments. The 8
6
(2W) and three-wheelers (3W) recor- revision in the FAME II policy during 4
ded growth of 37% and 66%, respec- 2023 posed a setback for the growth 2
0
tively, while passenger vehicles (PVs) of 2W and 3W. However, the overall 2020 2021 2022 2023 2024(P)
was at 113% and commercial vehicles expansion of the EV market remained 2W 3W PV CV
(CVs) at 169% given the lower base. robust throughout CY2023. Fig. 2: Category-wise EV volume sales growth
(Lakhs)
CY24 looks promising with the Growth and demand to continue CareEdge View
industry expecting to surpass sales vol- through CY24 While CY23 was certainly a re-
ume of 2-mn, underpinned by surging The growth momentum is expected markable year for EV growth in India,
demand and sustained government sup- to continue in CY24, driven by the: demand and growth sustainability look
port through incentives. However, invest-  Government’s increased focus on promising going forward. Continued
ments in the EV ecosystem remain crucial electrifi cation at both the Central government support through incen-
for fostering massive adoption of EVs. and State levels; tives and investments in bolstering the
 Potential extension of FAME II; EV ecosystem remains crucial for mas-
2W and 3W continue to drive EV  Improving EV ecosystem with a sive adoption of EVs. Breakthroughs in
volumes signifi cant increase in charging battery technology, along with battery
The predominant share of EV stations; swapping and faster charging solutions,
sales in India is currently held by 2W  Envisaged reduction in battery can signifi cantly boost adoption of EVs.

and 3W, collectively accounting for costs, leading to the lower total cost “An abrupt withdrawal or discontinua-
90-95% of the total EVs sold in India of ownership (TCO) compared to tion of the FAME II or other incentives
during CY23. In contrast, the share of ICE; and may lead to an increase in the prices
electric PVs stands at 5%, while com-  Development of new models across of EVs by around 25-30%, which can
mercial vehicles (CVs) occupy a minor categories. severely hamper the EV adoption
fraction, below 1%. momentum. Additionally, it can disrupt
The continuation of the FAME II ongoing investments in the EV sector,
Despite the challenges confronting initiative is poised to bolster demand leading to a substantial setback in the
the EV industry – from insuffi cient EV for EVs. Increased incentives and sub- advancements made in promoting sus-
charging infrastructure and concerns sidies further encourage consumers to tainable transportation”, said Arti Roy,
about battery capacity leading to range adopt EVs, thus driving growth. An Associate Director.
anxiety, to elevated vehicle prices in increase in the number of EVs will pro-
comparison to internal combustion mote sustainability and reduce carbon [Report prepared by CareEdge Ratings].

176 Chemical Weekly February 13, 2024

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