The electric vehicle industry in India is picking pace with 100% FDI possible, new manufacturing hubs, and increased push to improving charging infrastructure.
The global automotive industries are undergoing a shift toward electronic vehicles as an alternative in order to protect environment from pollution and save petrol.
Electronic vehicle Industry in India:-
The Indian automotive industries are fifth largest in the world and are expected to be the third largest by the year 2030. Catering to a vast domestic market, reliance on the conventional modes of fuel intensive mobility will not be sustainable. In an effort to address this, federal policymakers are developing a mobility option that is shared, connected and electric and have projected an ambitious target of achieving 100% electrification by 2030.
By making a gradual shifts towards electric vehicles, India can be benefitted in many ways. India has abundant of renewable sources of energy, human capital and availability of skilled manpower in manufacturing sectors.
According to an independent research centre of Energy Finance, the EV industries in India will be approx US$206 billion opportunity by 2030 if India maintains a steady progress to meet its ambitious goal by 2030.
Another report by India Energy Storage Alliance projects that the Indian EV market will grow at a CAGR of 36% till 2026. The EV battery market is also projected to grow at a CAGR of 30% during the same period.
Existing Ev ecosystem in India and investment outlook:-
Keeping aside the country's ambitious goal, India is still at it's developing stage. However, looking at it differently- India offers the world's largest untapped market especially in the two-wheeler segment. 100% foreign investment is permitted in the sector's under the automative route.
Taking advantage of this opportunity, leading companies like OLA Electric Mobility Pvt., Ather Energy and Mahindra Electrics are rapidly growing their paces in market. Moreover, states like Tamil Nadu and Karnataka are coming up with innovative and timely-investor friendly policies besides building necessary infrastructure.
Recently, Sterling and Wilson Pvt. Ltd. (SWPL), India's leading engineering, procurement and construction company announced its entry into the electric mobility segment in India. It has signed a 50-50 joint venture with Enel X, to be incorporated on April 1, 2021, to launch and create innovative charging infrastructure in India.
Challenges faced by EV industry:-
. High Costs:- Along with the range, one of the major concerns among the customers is over expensive EV's. It is because of the higher cost technology used in production of EV's.
. Lack of charging infrastructure:- In 2019, there was only 650 charging stations in India as against over 0.3 million in China. Lack of sufficient charging infrastructure is one of the primary reasons why customers often refrain from purchasing EV's.
. Higher depends on imports:- Dependance on imports of battery as well as other components is also one of the factors adding to the cost of EV's in India.
. Lower mileage:- Since the industry is young, there is immense scope for R&D. As of today, EV's in India are not cost competitive to an average customer as internal combination engine (ICE) vehicles prove to be more cost effective.
. Limited options:- Since it is a still budding industry in India, customers have a limited range of products to choose from. Increased investment in the sector will make it more competitive in due time and this will help create further demand.
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