Eye on 9 million plus EV sales by 2027, government, auto companies gear up to tap India’s potential

The holy city of Ayodhya is all charged up, albeit for a different cause with Tata Power and Ayodhya Development Authority joining forces to instill faith in e-mobility by installing electric vehicle (EV) charging stations in various public-parking areas with the aim of accelerating the adoption of EVs. Adoption of sustainable transportation solutions in this city of pilgrimage could make EVs more affordable and accessible to the people of Uttar Pradesh. Under this collaboration, announced in June 2023, Tata Power will install EV charging points at places such as Parking Survya Kund, Guptar Ghat, Amaniganj multi-level parking in front of the Jalkal Department, Kaushesh Kunj MLCP parking near the Ayodhya railway station, Tedhi Bazar MLCP parking on the east and west sides of Ayodhya as well as the Collectorate Office parking in Ayodhya. Escalating the nationwide drive to send out a powerful message about the importance of transitioning to cleaner and greener modes of transportation—this time even to pilgrim centres—Maruti Suzuki on 5 July launched the INVICTO, a premium three row utility vehicle (UV) with a revolutionary intelligent electric hybrid system in line with MSIL’s vision of a cleaner, greener, sustainable and carbon neutral world. Maruti’s most expensive offering till date unveils a new era of luxury starting at Rs 24.79 lakh with an electric hybrid powertrain with 2.0L engine and e-CVT transmission for an exceptional fuel-efficiency of 23.24 km/litre. The sophisticated dual powertrain system, combining an electric motor and a petrol engine, allows seamless transition between the engine, hybrid and electric drive modes. Chennai based EV Motorcycle startup, Raptee opened their first factory last month for manufacturing EV motorcycles to be rolled out later this year. Conceptualised in just 2019, Raptee plans to invest Rs 85 crore in this plant which will have an annual capacity of 1 lakh units and house a dedicated battery pack assembly line. The plans include a R&D centre with state-of-the-art development and testing facilities on-site to aid in future products.
These developments within the space of a month and complemented by initiatives across the country in various scale and sizes, strongly underline the ambitions of a burgeoning EV industry, the Central Government’s push towards adoption of cleaner energy alternatives and a well-timed convergence of policy and favourable start-up ecosystem. “From government side also, we now want to focus on driving this sector so that not only do we have more and more electric cars, buses and two-wheelers on the road, but we also become a manufacturing hub for the world,” Tarun Kapoor, Advisor to the Prime Minister, PMO, said recently at FICCI.
Sales of EVs in India is estimated to cross 9 million units by 2027, building on the investment of USD 1.7 billion made in the industry in 2021 by private equity and venture capital investors, a corpus which has reached USD 666 million in 2022 so far, says a research by the Indian Private Equity and Venture Capital Association (IVCA) in collaboration with EY and IndusLaw. According to a recent study by Primus Partners, while the Indian EV industry is trailing behind top countries like China, US and EU, massive investments have taken place in India. As per the report, 1.05 crore EVs were delivered during 2022 across the world. This is an increase of 55 per cent compared to 2021 and represents 13 per cent of total personal vehicles sold. Overall investment in EV industry may be substantially higher than Rs 1.19 lakh crore. A key enabler in this build-up is India’s growing charging infrastructure which has seen a growth of over 1500 per cent between FY21 and FY23 and led to the presence of over 6,000 charging stations in the country, a sign of how barriers towards public adoption of EVs are breaking. Take CHARGE+ZONE which has successfully completed the first phase of installing 1600 plus charging stations across 450 plus locations and wants to raise USD 125 million in equity to fund the next phase of expansion of its retail network in state and national highway charging infrastructure, product R&D and a strategic investment in e-mobility companies.
Interestingly, India’s courtship of EVs is not confined to passenger vehicles. Bangalore based Tresa Motors, India’s first OEM manufacturer of medium and heavy electric trucks, founded by Rohan Shravan and Ravi Machani in 2022, unveiled its first electric truck in June with Axial Flux Motor technology, called FLUX350 which delivers upto 350kW continuous power. Currently, India has a fleet of 2.8 million trucks, contributing to 60 per cent of emissions, highlighting the urgent needs for zero emissions medium and heavy trucks. Tresa Motors aims to transition India’s 2.8 million trucks to electric, one at a time by providing safe, innovative, and eco-friendly alternatives to traditional diesel trucks, with lowest total cost of ownership.
BillionElectric, an e-Mobility as a Service (eMaaS) platform, recently entered India, securing USD 10 million in a seed round of equity and asset lease funding to overcome the challenges in the commercial mobility sector such as high running cost of vehicles. The funds raised will be strategically allocated to the deployment of electric tarmac buses at the Bengaluru international airport and secondly, the development of a mid-mile heavy EV trucks platform. “The eMobiltiy industry is projected to experience remarkable growth, estimated to reach a staggering USD 6 billion by 2024,” says Kartikey Hariyani, Co-Founder, on the opportunity. The Company has already inked a contract to expand its services to 10 additional airports across India. Adding to the momentum, Uber has entered into a series of new agreements to unlock EV growth on its platform. Lithium Urban Technologies which is India’s largest B2B fleet service provider, Everest Fleet Private Limited and Moove, Uber’s global fleet partner, will deploy 25,000 EVs across Uber’s top seven cities helping drivers go electric faster. In a tie up with startup Zypp Electric, Uber will deploy 10,000 electric two-wheelers by 2024 to boost sustainable mobility in its fast-growing Uber Moto category. “India’s huge scale and electrification momentum makes the country a priority for Uber as we seek to meet our commitment to electrify every ride on our platform by 2040,” says Andrew Macdonald, Senior Vice President, Mobility and Business Operations at Uber.
Another player Omega Seiki Mobility which launched new electric urban passenger vehicles—OSM Stream City passenger electric three wheelers on 20 June, has increased its production five times and has plans to sell over 10,000 electric 3Ws in FY24. “A 15–20 per cent increase in earning potential will be offered by the electric passenger three-wheeler, ensuring more earnings and larger savings,” assures Uday Narang, Founder and Chairman of OSM.
However, there are challenges that remain to be fully tackled, ranging from high upfront cost and constraints on vehicle finance. Solutions are emerging with the Small Industries Development Bank of India (SIDBI)’s mission EVOLVE in association with NITI Aayog, World Bank, Korean-World Bank and Korean Economic Development Cooperation Fund to finance EV micro, small and medium sector enterprises. Addressing the challenges of high interest rates and limited availability of financing to the EV sector, EVOLVE is being designed to support around 1.5 million EVs. The approach will seek to leverage the carbon credit to be generated and same may be used to mobilise for benefit of the beneficiaries.