Navigant Research Blog

Indian EV Market Falling Short

John Gartner — June 26, 2013

On paper, India has many of the characteristics that would indicate a market where electric vehicles should thrive.  With 1.2 billion inhabitants, the country has several of the world’s most congested and polluted cities (Bangalore, New Delhi, Mumbai, etc.)  as well as a low cost of manufacturing labor and many highly educated engineers.

Reality, however, is falling far short of the potential, as fewer light duty plug-in electric vehicles (PEVs) will be sold in 2013 in all of India (less than 2,000) than in the state of Oregon.  Only one domestic PEV, the Mahnidra e20, is currently on sale in India, and international companies have not pursued the Indian market due to the many challenges facing PEVs in the country.

Annual Electrified Vehicle Sales by Vehicle Type, India: 2013-2018


(Source: Navigant Research)

The e2o is the first Indian-made electric car in nearly a decade, and Mahindra plans on adding a second model, an electric version of the Verito sedan, in 2014.  But even if there were more PEVs to choose from, demand would likely be minimal due to the higher cost and lack of EV infrastructure.  The power grid in India is notoriously unstable, with many regions suffering daily power outages, which could potentially strand PEV owners needing to recharge their batteries.

As described in Navigant Research’s new report, Electric Vehicles in India, the supply of PEVs in India could be ignited if the Indian government establishes a multiyear subsidy for electric vehicles to get the cost of PEVs closer to conventional vehicles.  While the government’s National Electric Mobility Mission Plan 2020 promises support for PEVs and charging infrastructure, the government has had a pattern of giving and taking away incentives within the same year, which has made auto manufacturers wary of entering the market.

It’s somewhat understandable that PEVs are not a top spending priority for the Indian government as it is dealing with an economy that is on the verge of slipping into crisis.  However, the weakness of the grid in India could actually be turned into a selling point for PEVs.  Vehicle-to-grid (V2G) technology could enable PEVs to be used to address grid instability, as a car’s battery pack could keep a house running when the power is out. That, however, would require purchasing additional equipment.

The market for hybrids (HEVs) in India isn’t much better, with fewer than 1,800 expected to be sold in India in 2013, also partially due to a lack of available models.  In the short term, selling two-wheeled electric vehicles is clearly the larger opportunity.  As the Navigant report shows, more than 500,000 electric bicycles, scooters and motorcycles will be sold this year in India ‑ a figure that will rise to more than 1.1 million by 2018.

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