Moneycontrol PRO
Access insightful & curated financial content with Moneycontrol PRO at just Re. 1/- per day. Use code PRO365.

Can India attain 30% private EV sales by 2030?

The government is setting lofty targets for EV sales penetration to reduce crude oil import. Can they be achieved?

October 13, 2021 / 01:50 PM IST

Speaking at a virtual conference held by the Federation of Indian Chambers of Commerce & Industry (Ficci), Union minister Nitin Gadkari announced that the government intends to achieve 30% market penetration in the passenger cars segment by 2030.

He said the electrification target for commercial vehicles was 70% while electric two-wheelers are expected to achieve a whopping 80% market penetration. Stressing the need to decarbonise the transport sector, Gadkari said meeting these targets would help India reduce its crude oil usage by a staggering 156 million tonnes. His estimates are largely in keeping with the targets set by the NITI Aayog report titled “India’s Electric Mobility Transformation” published in 2019.

Gadkari went on to announce that a pilot project to install an electric highway on the Delhi-Mumbai stretch, in order to facilitate easy movement of electric trucks and buses, is being considered.

As far as electric two-wheelers are concerned, Gadkari’s projection seems to be relatively plausible. In the last year alone, the electric two-wheeler market has seen unprecedented growth with E2W sales having gone up by 21% in FY2020. However, it needs to grow at a faster pace.

According to ICRA (Investment Information and Credit Rating Agency of India Limited), the e2W market is expected to account for 8-10% of two-wheeler sales by 2025. And the market penetration for cars and trucks is projected to be even lower, given their higher level of dependence on a thriving electric infrastructure. A more liberal estimate by Frost & Sullivan shows e2W having a 10-11% annual growth rate, selling up to 2.3-2.4 million units by FY2025.

Close

At present, the global forecast suggests that EVs will only begin outselling their fossil fuel-driven counterparts by 2040, when they’re expected to have 60% of the market share, according to a report by BloombergNEF. And while electric buses will occupy a major chunk of global bus fleets, they won’t claim total dominance as hydrogen-powered heavy duty vehicles will continue to gain greater prominence.

The central government’s targets then are in keeping with the global ones, which, according to the same report, will see 30% EV penetration in the passenger car market. However, it’s still considerably higher than the figure projected by the BloombergNEF report, which expects the EV car market to only account for 8% of new car sales by 2030.

Another report, by KPMG and CII, titled “Shifting Gears” states that market penetration of private electric four-wheelers will only be between 10-15% by 2030. Half of what the government aims to achieve. For many EV owners, two or four-wheeled, domestic charging continues to remain a concern.

In Bengaluru, the EV capital of the country, an e2w owner was forced to take his scooter into his elevator, after the residents' welfare association of the housing colony he was residing in, refused to let him charge it at the parking bay. Concerns regarding allocation of electricity, costs of installing charging infrastructure, and the approval process from local municipal and developmental authorities has often been cited as one of the key impediments for EV users living in apartment complexes.

This is despite the fact that residents now have a legal precedent allowing them rightful access to EV charging. According to the Model Building Byelaws amended by the Ministry of Housing and Urban Affairs, 20% of all parking spaces in a residential colony must be reserved for EVs. The building is also required to have an additional power load to accommodate all the additional power units, they are legally mandated to. Until the domestic charging issue isn’t resolved on priority, be it with incentives or penalties, EV sales will continue to be hampered.
Parth Charan is a Mumbai-based writer who’s written extensively on cars for over seven years.
first published: Oct 12, 2021 04:06 pm

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark