EVs Covers 1.3% of Vehicle Sales in India in FY 20-21

Increasing domestic EV manufacturing is making India Atmanirbhar and positively impacting the Trade Deficit of India.

Electric Vehicle (EV) adoption and hence its manufacturing has been the prime focus of our country for a few years now. The central and state governments are bringing new policies and incentives every year so far.

According to a recent report by techARC, a new-age technology market research firm, EVs took over 1.3 percent of total vehicle sales in India in the fiscal year (FY) 20-21. The report says that “the promotion of EVs in India will lead to a double positive impact on the Trade Deficit of India.”

The report enlightens the Indian imports crude oil over USD 100 billion a year, of which 47 percent is used for passenger cars and trucks alone. India is the 3rd largest importer of crude oil, importing over 84 percent of its total crude oil requirements. EV adoption will help reduce reliance on fossil fuels hence positively impact the Balance of Trade by reducing the trade deficit.

According to the numbers given in the report, India sold 2,36,803 EVs in FY 20-21, which makes 1.3 percent of the total vehicles sold during the period. Talking about the sale under EVs, electric two-wheelers (E2Ws) sweeps off 60.7 percent of the total EV sales.

However, E2W and E3W, both saw a decline in sales primarily due to macroeconomic sentiments whipped by Covid-19, E4W (Electric 4-wheeler) segment registered 52.9 percent growth in sales over FY 19-20. Through the period, 4,588 E4Ws were sold in India. The driving force behind the growth in E4W was considered to be the Fame-II scheme which provisions for electric buses for various states.

Interestingly, there are over 10 models of EV passenger cars available in India for consumers to buy under the price range of Rs 9.5 Lakh to Rs 25 Lakh. Although to see quite a growth of EVs in the passenger car segment (E4W), car OEMs need to bring in affordable offerings in the range of Rs 5-10 Lakh.

Speaking of EVs, its charging infrastructure is obliged to discuss. The charging infrastructure is growing in India. The report shows that at present, there are an estimated 1,300 plus charging stations in India. However, for mass adoption of EVs, this needs to exponentially grow. Private real estate developers can play a key role in expediting the growth of charging stations.

The techARC report suggests that to give further stimulus to the growth of EV manufacturing in India, the Fame-II scheme requires certain interventions/relaxations, especially after the pandemic (covid-19) challenge. For instance, achieving 50% localization is a challenge.

“EVs are uniquely positioned which can impact the Balance of Trade in two ways where it not only can reduce the imports of electronics used for manufacturing EVs through domestic production but more importantly help reduce the oil imports making India AtmaNirbhar in energy (fuel),” said Faisal Kawoosa, Founder, techARC.

Faisal suggested, “The government of India must reprioritize focus areas in Make in India as local sourcing of other electronics products like Smartphones, Smart TVs, Laptops, etc., would only impact the electronics imports against the EVs where it also helps to reduce the oil imports.”