India’s electric car market has experienced a remarkable surge, showcasing its potential to become a significant player in the global electric vehicle industry. As the fourth-largest automobile market worldwide, India’s government has actively promoted electric mobility, offering incentives and subsidies to make electric cars more accessible to consumers. Moreover, the rising awareness of environmental concerns and the demand for sustainable transportation solutions have fueled the popularity of electric vehicles in India.
This growing trend is evident as the country witnessed impressive sales figures for EVs in 2023, especially considering the soaring prices of petrol and diesel, which have surpassed Rs 100 per litre. According to a recent global study, 52% of consumers would prefer an EV as their next vehicle purchase. The study further revealed a significant increase in the inclination towards fully electric cars, with a growth rate of 3 times from 7% in 2020 to 20% in 2022. The environment remains the primary driving factor for shoppers opting for an EV. Additionally, the study shared that India, China, and Mexico will take the lead in car buying activity.
Factors to Consider When Purchasing Electric Cars in 2024
The demand for electric vehicles has grown substantially in recent years. In 2023, the number of EVs on the road experienced a significant jump. Market predictions suggest several factors will continue driving consumer demand for EVs throughout 2024-2031, including environmental concerns, a range of vehicle options, improved battery capacity, and cost savings.
Phenomenal Demand and Growth: Invest in the Future
Despite challenges caused by changes in government subsidies, the Indian electric vehicle market witnessed substantial growth in 2023, as reported by data from the government portal Vahan. Over the past year, India sold nearly 24 million vehicles, and over 1.5 million were EVs. This market share represents a significant increase of almost 47% compared to the previous year, bringing the total number of EV sales in the country to nearly 3.5 million.
Among the EVs sold, two-wheelers dominated the market, accounting for over 47% of total sales. Four-wheelers accounted for 8%, while the remaining sales came from e-rickshaws and tricycles. The growth in EV sales in India over the past few years has been remarkable, going from just 125,000 in 2020 to over 1.5 million in 2023.
Latest Range of Options and Price
In the first nine months of 2023, global sales of EVs experienced a significant increase of 43.66%, surpassing 1.5 million units in September, as per data compiled by Syrah Resources, a supplier of battery raw materials. Looking ahead, India is poised to witness a wave of new electric cars entering the market over the next year, highlighting the rapid expansion of the EV segment. Various automakers have officially announced their plans to launch electric vehicles in 2024. Notable names among the anticipated electric cars set to debut in India include Maruti Suzuki’s eVX, the first electric vehicle from the company, and the Tata Harrier EV.
In 2024, India will witness the introduction of multiple electric cars, such as Maruti Suzuki’s eVX with a range of 550 km, the Tata Harrier EV featuring V2L/V2V charging capabilities, the Tata Punch EV with a range exceeding 300 km, the Tata Curvv EV with a range between 400-500 km, the Kia EV9 with a range of 541 km and the capacity to charge for 239 km in just 15 minutes.
The Tata Nexon EV (Rs. 14.74 Lakh), MG Comet EV (Rs. 7.98 Lakh), and Mahindra XUV400 (Rs. 15.99 Lakh) are among the popular battery-powered cars in India. EV car prices in India range from 7.98 Lakh to 2.55 Crore presently.
While some electric vehicles can be expensive, there are also affordable options, such as the MG Comet EV – the most affordable electric car in India. Meanwhile, the Tata Harrier EV will be between Rs. 22.00 – 25.00 Lakh.
EV Infrastructure For Charging
India has set an ambitious target of electrifying its transportation sector by 2030. The country will need 46,000 charging stations spread across the nation to achieve this goal. However, it is necessary to note that India’s aim of complete electrification by 2030 may be overly ambitious. These days, the two-wheeler electric vehicle (EV) category is leading the way, contributing significantly to the overall momentum. Another crucial aspect is the need for supporting infrastructure. According to the information provided by BEE, there are currently 6586 operational Public Charging Stations (PCS) in the country as of March 21, 2023. Tata Power, in particular, has a widespread charging infrastructure, with a presence in over 420 cities. This data includes more than 62,000 home chargers, 4,900 public and semi-public charging points, and 430 bus charging stations as of December 2023.
In 2023, India witnessed a surge in the number of charging stations. The prominent charging infrastructure manufacturers in the country include Delta Electronics, Mass Tech, ABB India, Exicom, Okaya, and RRT.
Furthermore, the Ministry of Power has classified electric vehicle charging as a “service,” eliminating the need for licensing under the Electricity Act 2003. Several companies, such as EESL, Tata Power, Magenta Group, Fortum India, Volttic, and Charge Zone, operate as Charging Station Operators (CSOs).
Government Benefits and Future Potential
Purchasing an electric vehicle may seem more expensive upfront compared to buying a traditional combustion engine vehicle. However, the overall cost of owning an electric vehicle is lower in the long run. To make EVs more affordable, the government offers various financial incentives. These incentives include direct discounts on the cost of the electric vehicle, coupons to reimburse a certain amount later, discounts on interest rates for loans, exemption from road tax and registration fees, income tax benefits, scrapping incentives for old petrol and diesel vehicles, and other incentives like interest-free loans and special subsidies for electric three-wheelers. With these incentives, owning an electric vehicle becomes a more cost-effective and environmentally friendly choice.
The Central government is actively encouraging the adoption of electric vehicles in the country by offering various subsidies. One such subsidy is the FAME II scheme (Faster Adoption and Manufacturing of Electric Vehicles), which will end in March 2024. However, discussions are underway to extend the scheme for an additional year until a new plan gets implemented.
The current scheme covers electric two-wheelers, three-wheelers, and four-wheelers, with a budget of Rs 10,000 crore. Furthermore, a proposal for introducing the FAME III scheme, requiring Rs 30,000 crore over the next 5- years, has been submitted.
Overall, these subsidies aim to promote the use of electric vehicles in India, driving their growth and making them more accessible to consumers. Furthermore, these incentives can even contribute to reducing expenses on electric commercial insurance.
Decreased Dependence on Fuel Costs
Electric cars operate on electricity, which is generated from renewable sources. This element reduces the dependence on traditional fuel sources, presenting a significant benefit. By relying less on fuel, you no longer have to worry about fluctuating petrol or diesel prices, resulting in substantial long-term savings.
Enjoy the Perks of Insurance Benefits
Electric cars have many benefits you wouldn’t get with an ICE vehicle! Not only are they less accident-prone and require less maintenance, but they also come with lower insurance premiums. Even better, some insurance companies offer specialized policies that cover battery damage, which regular car insurance policies don’t. And that’s not all! Electric car insurance policies also provide additional protection like personal accident cover and third-party liability cover. Now, you can hit the road with peace of mind and extra coverage.
EVs have a multitude of environmental advantages over other vehicles. In their lifetime, they produce significantly less pollution than internal combustion engine (ICE) cars. This transition benefits society, particularly vulnerable groups who often bear the brunt of the detrimental effects of transportation emissions.
Electric vehicles are known to generate zero carbon dioxide emissions, making them an attractive choice for many consumers concerned about air pollution. However, consider the emissions produced at power plants. In particular, if the plants rely on coal or fossil fuels. Although electric vehicles do not emit zero carbon dioxide, they still emit significantly less than gasoline-fueled automobiles.
Electric cars offer substantial savings on repair and maintenance costs, providing a financial advantage for their owners. In contrast to traditional cars, electric vehicles have fewer components, reducing the likelihood of breakdowns.
Additionally, since electric cars do not have an internal combustion engine, there is no need for oil changes, and brake wear is minimal. These factors result in significant reductions in maintenance requirements and expenses. Hence, EV promotes sustainability and is an appealing financial incentive for those contemplating transitioning to electric cars.
Easy Drive: No Gear
One notable distinction between electric cars and combustion engine vehicles is the absence of a conventional gearbox in electric cars. Operating an electric car does not involve gear changes, functioning similarly to a vehicle with automatic transmission.
Furthermore, this comes at no extra cost to you. The quietness of an electric motor makes driving in busy start-stop traffic or traffic congestion in the city more comfortable.
The Global Mandate
- According to the EY Mobility Consumer Index (MCI), a survey conducted among more than 15,000 participants from 20 countries, it has been found that 55.1% of respondents expressed their desire to purchase an electric vehicle (EV) as their next mode of transportation.
- Factors such as government incentives, reduced prices, and lower ownership costs are the main driving forces behind the purchase of an electric vehicle.
- Government subsidies have effectively lowered the initial purchase cost of EVs. However, the lack of charging infrastructure and concerns about limited driving range still pose significant challenges for potential buyers.
- Consumers are more likely to invest in an electric vehicle when they can easily see the practical benefits.
What Motivates Indians to Purchase an Electric Vehicle?
- 70% of tier-one consumers expressed openness to purchasing an electric car for their next vehicle. This percentage is notably higher than the global average, indicating a growing interest in electric vehicles (EVs) within the Indian market.
- Most consumers prefer fully battery electric vehicles, with 49% favoring them over plug-in hybrid electric vehicles, which only garnered 21% of the respondents’ interest.
- 75% of Indians are altering their behavior and consumption patterns to align with sustainability considerations.
- When contemplating their next car purchase, people in India prioritize sustainability alongside other crucial criteria such as safety, brand reputation, and costs.
- 75% of surveyed consumers expressed dissatisfaction with the existing charging infrastructure.
Future Runway Models 2024
In 2024, the electric car market in India stands poised for a significant boom. Several intriguing new players will enter the scene, and existing electric vehicle (EV) manufacturers will step up their game by introducing new models. What’s particularly interesting is that many of the cars on this list will be high-end offerings, reflecting the direction in which the market is heading. Among the top choices for EVs making their debut in India in 2024 are the Mahindra BE.09, Tata Punch EV, BYD Seal, Maruti Suzuki WagonR EV, Lexus UX, Jeep Avenger, MG 4MG 4, MG Marvel R, Renault City K-ZE, Volkswagen ID, Kia KA4 (Carnival), Hyundai New Santa Fe, Honda New Jazz, BMW X8, Ferrari Purosangue SUV, Honda WR-V, MG eRX5, Lexus LM, and more.
Consumer perception has become the main obstacle to the widespread adoption of electric vehicles in India. This trend continues in 2024 even though the driving range of EVs has increased and their cost has decreased, thanks to the declining prices of batteries in recent years. Surveys have revealed the key factors that influence consumers’ decisions when it comes to buying EVs. Even those with the financial means to afford the higher upfront costs are discouraged from purchasing electric vehicles due to a lack of knowledge about their features and charging infrastructure. Presumably, when the upfront cost becomes competitive with ICE vehicles, there can be an increase in adoption among potential buyers. However, consumer sentiment towards electric transport is generally positive, indicating a preference for eco-friendly transportation options.