Coming off a high in calendar year 2023, the electric vehicle (EV) segment saw the pace of sales growth moderating this year. Industry observers cited reduced incentives for EVs, rising consumer confidence in hybrid vehicles, insufficient charging infrastructure and higher retail prices the key as factors for the slowdown in the sales of battery-powered vehicles, apart from, of course, the high base effect.
While nearly 1.9 million EVs were sold in 2024—representing a 24 percent increase from 1.5 million in 2023—it marked a significant slowdown compared to the 50 percent growth seen between 2022 and 2023. The electric two-wheeler (E2W) segment saw a 32 percent growth in volumes this year to 11,36,131 units on an on-year basis. Here again, the pace of growth was lower, with sales rising 36 percent to 8,60,478 units from 6,31,410 units in 2022, as per data from Vahan, the government portal.
In the electric passenger vehicle (PV) segment, the growth was slower still. Total e-car sales were up just 20 percent this year at 87,687 units versus 73,273 units sold in 2023. Last year, sales had skyrocketed 120 percent from 33,209 units. The proportion of EVs to total PV sales remained at around 2 percent for 2024 as well.
According to ICRA Limited, EV penetration levels remain modest, particularly for cars and trucks, offsetting a higher adoption rate for two/three-wheelers and buses.
“The pace of growth was affected by a reduction in subsidies, elevated ownership costs, rising consumer preferences for hybrid cars, slower growth in creation of charging infrastructure, a cautious stance of financiers towards EVs, etc.," said Srikumar Krishnamurthy, senior vice president and co-group head, corporate ratings, ICRA.
However, he maintained that the government’s policy measures remain supportive as the PM E-DRIVE scheme is expected to aid faster EV adoption, apart from development of the EV manufacturing ecosystem. “Also, factors such as improving charging infrastructure and a reduction in vehicle prices on account of a decline in battery prices is expected to propel adoption,” added Sukumar.
2025: beginning of the EV revolution?
Despite challenges, industry experts affirm that India is at the cusp of an EV revolution, with 2025 poised to be a pivotal year in its journey toward sustainable transportation.
Furthermore, the rollout of multiple new EVs such as Maruti Suzuki eVitara, Tata Sierra EV and Avinya, Mahindra BE 6 and XEV 9e, Hyundai Creta Electric, Kia Syros Electric, MG Cyberster, etc., are expected to lead to all-time high volumes.
According to Puneet Gupta, director, S&P Global Mobility, EVs have caught the consumer's eye in India in 2024. He stated that just the MG Windsor EV, launched in September this year, has amassed an impressive 50,000 pending bookings that will be fulfilled in 2025.
“Major automakers such as Suzuki, Toyota, Hyundai, Mahindra and Kia are gearing up to unveil their EV portfolios, potentially propelling India toward a pivotal inflection point in its electrification journey,” said Gupta from S&P Global Mobility.
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