Home / Auto News / The coming surge of electric vehicles, in 5 charts

A headline event for the Indian electric vehicle (EV) industry this year was the buzz created by Ola Electric’s grand announcements, followed by disappointment due to persistent delivery delays. Beyond such headlines, the Indian EV industry had a solid run, marked by progress and promise. New EV registrations more than doubled in 2021, and there are several signposts of promise that signal a further acceleration in 2022.

New two-wheeler companies and new launches are expanding the market. The biggest manufacturer by its word, Ola Electric, should eventually get going. Governments have stepped up incentives. Battery charging infrastructure has strengthened. Alternative solutions to public charging stations are being explored. High fuel prices are turning consumers towards EVs. A lot is building towards a speedy 2022.

This wasn’t the case a year ago. In 2020, as the pandemic restricted mobility, EV registrations shrank 26% to 119,656 vehicles, according to the government’s Vahan dashboard. But, as the economy rebounded, so did EVs. In 2021, India had registered 260,436 EVs till November. The monthly base of EV registrations has expanded from about 26,000 in July to 42,000 in November. The expectation is this could continue in 2022.

Calendar 2021 also saw investments in EVs pick up. A total of 3,298 crore went into the sector during the first three quarters, compared to 1,546 crore in all of 2020. A significant portion came in the third quarter, with Ola Electric accounting for 81% of total investments. Revolt, Magenta and Vogo were among the top companies to raise funds during the first two quarters.

Two-Wheeler Nation

India is essentially a two-wheeler market. In 2019, before the pandemic, two-wheeler sales outnumbered four-wheeler sales in a ratio of 6:1. In EVs, this ratio is further amplified, and it stood at 12:1 in 2021. This year, the needle in electric has moved from e-rickshaws to two-wheelers. In 2021 (till November), India registered 126,813 electric two-wheelers, up 4.6 times over the same period last year. During the same period, 10,001 four-wheelers were registered, up from 3,120 last year.

At present, the two-wheeler EV market is led by startups and first-generation companies. Hero Electric (unrelated to Hero MotoCorp) leads the market with a 15.2% share. It's followed by Okinawa and Ather, both of which have seen their share nearly double to 9.3% and 5.3%, respectively, in the last one year. Even as they expand, expect traditional players like Bajaj and TVS to get a move on in 2022.

Cost Factor

Growth in EVs is also driven by economic considerations. According to Motilal Oswal Securities, a brokerage, electric two-wheelers have a 10-20% lower cost of ownership on a per kilometer basis than two-wheelers powered by internal combustion engines (ICE). Falling battery costs are driving this cost advantage. Lithium-ion batteries account for 40% of the manufactured cost of an EV. Over the last decade, EV battery prices have declined by about 86%, according to BloombergNEF. In 2021, the drop was about 9%.

EV sales also benefit from government subsidies. The Centre, for example, has earmarked 8,596 crore as subsidies for vehicle buyers under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) Scheme. The hike in this subsidy in June from 10,000 per kWh to 15,000 per kWh is expected to reduce the price of an e-scooter by 10-12%. The 30% surge in petrol prices this year has further narrowed the gap between EVs and ICE vehicles.

Infra Push

One hurdle to EV adoption is the thin availability of battery charging points in public places. According to a Grant Thornton-FICCI report, India needs around 400,000 public charging stations to support 2 million EVs by 2026. As of November 2021, there were only 452 charging stations under the FAME scheme. The Centre has further sanctioned 2,877 stations in 68 cities, and 1,576 across nine expressways and 16 highways.

States are ramping up efforts as well. For example, Delhi provides a subsidy of 6,000 each to the first 30,000 applicants for installation of EV chargers. Indian Oil Corporation plans to expand its charging stations from 448 now to 2,000 in a year, and add another 8,000 in two years. Tata Power currently runs 878 public EV charging points, and is aiming at 100,000 in the next 4 years. The charge of EVs is likely to continue in 2022.

www.howindialives.com is a database and search engine for public data

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