- Hybrids and vehicles powered by compressed natural gas (CNG) are likely to capture considerable market share, complementing the rise of EVs in both light-vehicle and passenger commercial segments.
- Adoption of electric mobility in the country is expected to gain momentum through the launch of models that are competitively priced compared to ICE vehicles.
The Indian government is steadfastly advancing its agenda for electric vehicles (EVs), setting an ambitious target of achieving 30 per cent EV penetration by 2030.
A report by S&P Global Ratings underscores this commitment, revealing that significant investments from major industrial players, including Tata and JSW, are poised to drive the growth of EV production and localisation of supply chains.
The anticipated investment surpasses $30 billion over the next decade, with a substantial portion directed towards South and Southeast Asia.
India’s status as the world’s most populous nation positions it as a lucrative market for EV investments. The adoption of electric mobility in the country is expected to gain momentum through the launch of models that are competitively priced compared to internal combustion engine (ICE) vehicles, in conjunction with improvements in charging infrastructure.
Government initiatives
The report also posits that hybrids and vehicles powered by compressed natural gas (CNG) are likely to capture considerable market share, complementing the rise of EVs in both light-vehicle and passenger commercial segments.
Central to this transition is the recently initiated PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme, which entails a financial commitment of Rs10,900 crore over two years.
The initiative aims to accelerate the adoption of electric mobility while establishing critical charging infrastructure across the nation. Indeed, the shift from ICE vehicles in India appears to favour alternative fuels at the outset, fostering a gradual transition toward full electrification.
The role of government policies regarding imports and foreign investment remains pivotal in supporting India’s vehicle electrification efforts. This regulatory framework will be essential in attracting and securing investment from global automotive leaders, including Hyundai and Kia, both of which recognise India’s growing significance in their operational strategies.
Hyundai, in particular, plans to begin local EV production with its first fully electric model expected in January 2025, further bolstered by the proceeds from its recent public offering in India.
Moreover, Tata Motors’ financial capacity to support its EV initiatives is promising, exemplified by its planned $1 billion investment in a new EV plant in Tamil Nadu and a lithium-ion battery facility in Gujarat.
The infrastructure development will not only bolster the EV supply chain but also pave the way for technological advancements within the region.