EV acceptance graphs show inflection point : ICRA
With or without subsidies, the uptake ofin India is about to take off. According to research released on October 31 by rating agency ICRA Ltd., by 2030, almost one in three two-wheelers sold in India will be electric. By then, electric buses will account for 40% of the commercial vehicle industry, and electric rickshaws 40% of the three-wheeler sector. By the end of this decade, just 15% of passenger cars sold will be electric.
According to ICRA data, EV sales in the first half of the fiscal year ending in March 2024 accounted for 4.4% of total vehicle sales or close to 5,00,000 units. As of the fiscal year 2023, that percentage was 3.7% or around 8,00,000 units. About 90% of EV sales were made up of, but just 5% of the two-wheeler market as a whole. It is anticipated to increase to 10-12% by FY25.
However, the elimination of the FAME-II subsidy was a deterrent; adoption has slowed down recently since, in the absence of a subsidy, a buyer will now need five years instead of three to recoup the cost of her purchase
Meanwhile, government backing has bolstered sales of electric buses, which accounted for 7% of the CV market in FY23 with close to 1,900 units sold. They benefit from a favourable total cost of ownership as well.
According to ICRA's assessment, "electric buses have the lowest fuel costs, but other operating costs, like battery replacement and on-site support requirements, increase operating costs." "However, even after the available subsidies, lower operating costs lead to a lower total cost of ownership (TCO) for electric buses, which increases their adoption despite higher capital costs."
But the uptake of electric vehicles is trailing behind the rest of the EV ecosystem. Currently, just 1% of all automobiles sold in India are electric; however, ICRA predicts that percentage will rise to 4-6% by FY25 and 15% by FY30. Demand won't likely increase until prices for fossil fuel-powered automobiles are comparable. Due to constraints in supply, the price of lithium-ion battery packs, which still account for 35–40% of the cost of anr, has been rising over the past several years.
According to ICRA's assessment, "to achieve pricing parity for the PV segment, battery costs need to reduce by 25–30% from current levels." "Hybrids are thought of as a middle ground for EV adoption, providing better mileage and reducing range anxiety."