Two, three-wheelers and buses at forefront of India’s electrification agenda

India plans to prioritise affordable smaller electric vehicles and public transport to help the transition to cleaner mobility

By
Ian Osborne
October 1, 2021
Category:
EV Life

Vehicle electrification has become a strategic priority for the stakeholders of the automotive market in India. As a result, everybody is undergoing the essential up-skilling phase to be future-ready for electric vehicles (EVs). GlobalData, a leading data and analytics company, has stated that India plans to prioritise the electrification of the two-wheelers, three-wheelers and buses.

Over recent years, automakers and both central and state governments, along with component manufacturers have been amending and building new policy frameworks that favour electric vehicles. This will help the market transition towards cleaner technology and move away from traditional internal combustion engines.

Bakar Sadik Agwan, GlobalData senior automotive analyst, said: “Two-wheelers, three-wheelers and buses are clearly the key beneficiaries of the government schemes with the passenger EVs being on the back burner presently.

“However, the high modal share of the three completely justifies the reason and these segments can help to achieve 30 percent new vehicle electrification target by 2030.

“Passenger electric cars, being a big ticket purchase, faces a challenge to gain volume for personal mobility in the price-sensitive Indian market. Furthermore, they also face headwinds from factors such as range anxiety, lack of charging infrastructure and alternative fuel vehicles.”

Despite the passenger electric vehicle market being small in terms of volume, it holds massive growth potential. Most automakers are optimistic about the future of electric cars in India. Both domestic and foreign automakers are now in the electric car race in the country.

Currently, only a few have offerings for the market while others still have their products under development. Many also have plans to import their electric vehicles but it is taking time.

Agwan added: “EVs are still in the early stage in India. While affordable EVs are picking up pace, things are tough for luxury automakers due to high import duties, which restrain them from importing vehicles as CBUs to sense check the market trends and customer buying behaviour.

“Automakers including Tesla and Mercedes-Benz have been expressing their concerns over taxes among the highest in the world that make their vehicles up to twice as expensive, and unaffordable in India, when compared to some developed markets such as the US and Europe.

“Establishing assembly and production for a small volume segment will not make business sense for these luxury automakers. Limited imports could help to gauge the market and eventually plan their future strategies. The electrification race in India is not a short sprint but a marathon that requires careful planning and execution.”

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