India’s EV sales robust amidst global slowdown

In recent developments, the global growth rate of electric vehicles (EVs) has shown signs of deceleration. This slowdown is driven by factors such as high capital costs, election uncertainties, and a lack of quick charging infrastructure. 

But contrary to global trends, India is experiencing robust growth in its EV market. JMK Research & Analytics highlights that India’s EV sales surpassed 1.7 million units in FY 2024. With major players like TATA Motors, Mahindra & Mahindra, and BYD leading the market, and new entrants like Tesla and VinFast planning to join, India’s EV sector is poised for significant expansion.

As per the data available by Kelley Blue Book, a vehicle valuation and automotive research company, Americans bought more than 200,000 new EVs in the first quarter of 2024. From Q4 2023 to Q1 2024, there has been a decline in sales of EVs and their share of new vehicle sales was recorded at 7.3%.

The first quarter saw a 15.2% decrease in sales on a Q-o-Q basis, even as there was a 2.6% increase YoY. As stated by Kelley Blue Book, this recent rise is quite less than that of the last two years.

As per the report of the European Automobile Manufacturers’ Association (ACEA), there has been a decline in new car sales this year in March for the first time, because of a drop in EV registrations and the timing of the Easter holidays.  

The EU witnessed a decline by 11.3% to 134,397 units in March, largely due to a 29% decline in Germany, its biggest market.As per the report, hybrid electric vehicles (HEVs) and Plug-in hybrid electric vehicles (PHEVs) are relatively on a sound footing.

Mercedes-Benz CEO Ola Källenius made a notable announcement earlier this year, that the brand no longer plans to go fully electric by 2030 in select markets, including in Europe. It has also dropped its goal of having 50% sales volume from its hybrid and EV range by 2025. And the main reason is slow adoption of electric and hybrid vehicles in most parts of the world.

India defies global trends

India is witnessing continuous growth in EV sales, which exceeded 1.7 million units in FY 2024, as per a report by JMK Research & Analytics.

There has been an increase by 10% in India’s passenger vehicle sales year over year in 2023, where EV sales doubled, making up for 2% of total passenger vehicle sales.  

As per Counterpoint Research  India’s EV sales are expected to rise by 66% in 2024, and their market share is forecasted to double from to 4%. They are expected to form one-third of all passenger vehicle sales in India by 2030, because of the continuous support provided by the government and the entry of new players in the market.

Subsidies provided by the government help increase the demand for EVs in the country. Apart from that, supportive infrastructure is being developed, which also supports EV sales. The government also decreased EV import taxes on particular models, if the carmakers are ready to invest a minimum of $ 500 million and start production domestically within three years. This can be a great incentive for foreign companies to invest in manufacturing facilities. The interests and concerns of customers towards climate change also boosted EV demand.

Major new players in the Indian market include TATA Motors, Mahindra and Mahindra, and BYD. TATA Motors is the leader and owns more than two-thirds of the country’s EV market in 2023, but lost some to Mahindra & Mahindra (M&M) and BYD. The brand which had grown faster than others, is M&M, as it saw a 2,476% increase, followed by BYD and MG Motor, as per the report of Counterpoint.   

‘’As the infrastructure and consumer traction develops, we will see the entry of newer players such as Tesla and fast-growing Chinese brands like Xiaomi, which will catalyze innovation and competition in the world’s fourth-largest PV market,” said Neil Shah, Research Vice President, Counterpoint Research.

There has been an increase in competition because of the changing scenario of the automotive industry, with big players coming forward with their plans as Tesla has started its production of right-handed driving cars for export to the Indian market later this year. Vietnamese-based automaker VinFast is planning to build a factory in Tamil Nadu, which shows their increasing interest and attractiveness of the EV sector in the country.