EV investment in India: Trends to watch in Indian electric vehicle market in 2023

EV investment in India: The electric vehicle industry has taken the Indian automotive market by storm. The industry has become an integral part of the industry. With a series of launches in the EV space, India has recorded a staggering growth rate of 686 per cent in the first quarter of 2022.

The year 2022 has been a year for electric and green mobility in India. Moreover, international countries and their industry players are advocating for electric vehicles and redrafting the subsidies and regulations.

In recent years, the EV industry has evolved dramatically. Launched at a very high initial cost and low battery range, EV vehicles addressed all major gaps to solve environmental concerns.

The entry of game-changing Original Equipment Manufacturers (OEMs), customers’ changing behaviour and the government’s backing of the segment have resulted in creating EV unicorns in the country.

Significant demand for EVs has been seen with a 0.7 per cent market share which is further projected to touch 3.8 percent by 2027.

The shift towards EVs is majorly due to the transforming supply chains and physical infrastructure that boosts EV adoption in India.

Giant automakers are showcasing the path to success with their capability of producing appealing and high-performance EVs in India.  

According to Sandiip Bhammer, Green Frontier Capital,  said “India is expected to be electrified the fastest, becoming the global leader in the EV market. With widespread electrification, it will play a crucial role in the transformation of the mobility industry alongside enjoying more opportunities in vehicle segments.”

“Within the EV ecosystem, we believe Artificial Intelligence and the Internet Of Things will play a major role in the EV Industry in the coming future. Other contributing factors like the implementation of battery swapping stations will increase awareness and adoption of EVs and the Make in India program can aid in the manufacturing of EVs and their components,” he added.

A multitude of factors are making EVs appealing to many automotive enthusiasts. In 2023, new models are lined up to hit the market including electric pickups, SUVs and plug-in hybrid electric vehicles.

Even global players have planned their exclusive launch in India with high-end electric vehicles.

However, EV riders and potential customers remain concerned about the infrastructure that lacks EV charging stations. It deters many people from choosing EV vehicles as their primary mode of commute.

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Given the predicted market growth, a robust EV charging infrastructure is critical to driving its adoption. In the upcoming year, it is predicted to witness industry players solving the tough challenges of EV charging in the country as many drivers who would opt EV to go on road trips would face difficulty in charging their vehicles with limited charging spots available across the country, especially in tier 2 & 3 cities.  

Talking about the growth prospects of the industry, Kunal Gupta, Co-founder & CEO of EMotorad said, “Indeed, the EV industry is going to rule, not only in 2023 but the years going forward.

As more people become aware of the advantages that EVs have to offer - whether monetary, convenience or environmental - we shall see an even more positive increase in market acceptance. A substantial range of EVs is being introduced to the Indian market that is affordable, accessible and serves varied consumer groups. From e-commerce and last-mile commute solutions to personal mobility options, consumers have multiple finance options and cost-effective solutions.”

“Manufacturers are introducing technological and production advancements while looking forward to strong policy incentives that are bound to provide significant growth to the EV market. Apart from electric vehicles, we believe that there will be significant growth across the value chain including component manufacturers, battery and battery management systems, and mobility services,” he added.

The EV adoption in 2023 is predicted to be at an all-time high as the maturity of the EV financing market is underway. EVs are a huge opportunity in India and yet have witnessed slow-paced growth due to the lack of availability of leasing options. With more commercial EVs entering the segment, the idea of helping the customer work in an opex setup without tying into fixed assets is creating ripples in the market.

“Vehicle leasing will be the new norm for EV commercial fleet deployment. The commercial fleet segment will be on the fastest go and we will soon see 100% electrification in the last-mile delivery segment due to the lower total cost of ownership. While being a cost-efficient approach this will also enable the fleet operators to remain asset-light,” said Dev Arora, Co-Founder and CEO of ALT Mobility.

There are plenty of opportunities in EVs and hybrid vehicles that will help the country create new sales records at a pace. The launch of new models will further redraw the face of the segment while improvements in battery technology and the opening of avenues for leasing will significantly offer plenty of innovative opportunities in the segment.

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