NEW DELHI — In the smoggy capital city of New Delhi, there is an increasing number of green-plated cars on the roads. These are electric vehicles and even outside of Delhi, they are gaining popularity.
Combustion-engine vehicles are still the norm in the country, but EVs are now a common sight in major cities. Ride-hailing services that employ EVs like BluSmart are also increasingly common.
Approximately 90,000 electric cars were sold in fiscal 2023, according to India’s Federation of Automobile Dealers Associations (FADA). That figure is still tiny — at 2% of the total number of vehicles sold in that year — but it represents a near doubling from the previous year.
The Indian government, grappling with both air pollution and a trade deficit from crude oil imports, has been encouraging EV adoption by offering subsidies.
Maruti Suzuki India, the largest manufacturer in the Indian passenger car market with a 40% market share, is ramping up factory construction to launch EVs within fiscal 2024. Chinese manufacturers like BYD are among prominent players in the global market but their India penetration is still low, partly due to tensions between the two governments.
As such, India’s largest conglomerate Tata Motors has been taking the lead in the EV passenger market, with a 70% share. It opened an EV-only showroom near New Delhi in January.
Customers were contemplating EV purchases at the store in June. A customer told Nikkei Asia, “We’re thinking of buying a model priced around 1.2 million rupees ($14,000). Although its price is higher than regular gasoline cars, the overall running costs will be lower.”
Electric two-wheelers are also increasing in popularity. The total units sold in fiscal 2023 approached 950,000. Ola Electric Mobility, a startup funded by companies including SoftBank Group, has secured the top position with sales exceeding 300,000 units.
Ola is gearing up to list on the Indian stock exchange and intends to use the proceeds to expand production. It aims to set in place a structure to manufacture 10 million units annually in the future. The company is also prioritizing female employment. At its factory in Tamil Nadu, the southernmost state of India, the majority of staff engaged in parts building and other tasks are female workers.
The trend of electrification is also evident in three-wheelers, including rickshaws, a popular form of transportation for locals. Several local manufacturers are competing in the market. Japan’s Terra Motors manufactures and sells electric three-wheelers, commonly used as taxis. Terra Charge, backed by the same shareholders, has started offering EV charging services in India.
Nakul Zaveri, partner and co-head of climate investment strategy at LeapFrog Investments, a private equity investment company based in the U.K. and India, believes that the EV market will keep growing in India, driven by concerns over air pollution and climate change. Alongside MUFG Bank and Panasonic, LeapFrog recently invested in a startup focused on car battery swapping stations.
Mitsui & Co. Global Strategic Studies Institute projected last year that by 2030, electric two-wheelers, three-wheelers, and four-wheelers will constitute 60%, 90%, and 20% of their Indian segments respectively.
CAPTIONS:
A Tata Motors EV makes its way down a street in the Paharganj district, a popular tourist area near New Delhi railway station, in June.
Traffic moves at a snail’s pace through the haze and smog in New Delhi in 2023. (Photo by Getty Images)
BluSmart is a ride-hailing app whose cars are all EVs.
A car sits outside a TATA.ev showroom in Gurgaon in June: TATA.ev specializes in electric vehicles.
Workers assemble electric scooters at Ola’s factory in the state of Tamil Nadu in May. (Photo by Shinya Sawai)
A driver peers out from his Terra Motors electric three-wheeler in Gurgaon in June.