What’s in store for India's EV market in 2024 and beyond?

India's EV market: India's electric vehicle (EV) market witnessed an exponential growth in 2023, nearly doubling its sales from the previous year. This surge was driven by various factors, including heightened consumer interest, government initiatives, infrastructure development, and increasing concerns over climate change. According to data from Counterpoint Research, EVs captured 2 per cent of the overall passenger vehicle market share in India in 2023, compared to just 1 per cent the year before.

Tata remains dominant player

Tata Motors emerged as a dominant player in the Indian EV market in 2023, capturing over two-thirds of the market share, although it faced stiff competition from Mahindra & Mahindra and BYD. Mahindra & Mahindra, with its all-electric SUV XUV400, recorded an astounding 2476 per cent increase in sales, making it the fastest-growing brand in the EV segment. Similarly, BYD, despite having only two models in its lineup, saw its sales grow by over 1500 per cent in 2023, positioning itself among the top five EV brands in India.

Looking ahead, Counterpoint Research projects a 66 per cent increase in EV sales in 2024, with EVs expected to constitute 4 per cent of total PV sales. By 2030, EVs are anticipated to represent nearly one-third of India's PV market. Maruti Suzuki's entry into the EV market and VinFast's investment in a manufacturing facility in Tamil Nadu are expected to intensify competition and drive further growth in the EV segment.

Supply chain development

The development of the EV supply chain is also gaining momentum, with significant investments in battery manufacturing by companies like Ola, Reliance New Energy, and ACC Energy Storage. Government initiatives such as the Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cells (ACC) and the reduction in import duties on EVs under $35,000 to 15 per cent are expected to accelerate the adoption of EVs in India.

According to Liz Lee, Associate Director at Counterpoint Research, India's EV landscape is on the verge of significant growth, driven by advancements in battery technology and favorable government policies. Neil Shah, Research Vice President, believes that as the EV ecosystem matures, India will attract newer players like Tesla and Chinese brands like Xiaomi, leading to increased innovation and competition in the market. 

Additionally, India's potential as a hub for technology R&D and export opportunities in the smart car manufacturing ecosystem is expected to attract investments from players across the value chain.