Four-wheeler and two-wheeler companies will launch multiple models by 2030 in India, which has great potential in EV manufacturing and consumption. However, the unavailability of charging infrastructure, geopolitics, and other factors will continue to challenge the country's electrification ambition.
In his speech at an EV forum at InnoVEX 2024 on June 6, Karthi Madhavan, Country Head of Tata Consultancy Services, Taiwan, said India's market is expected to reach US$7.09 billion in 2025. As of August 2023, the country accumulated close to 850,000 units of EV sales.
India has a population of 1.4 billion people. Madhavan said Indians travel frequently. Therefore, there are many private and public-owned vehicles. For example, the Indian government has close to 280,000 buses. It plans to deploy 50,000 electric buses in four to five years, creating potential business opportunities.
According to Madhavan, Tata Motor accounts for 74% of India's electric four-wheeler market, followed by SAIC-owned MG Motor's 11.8% and Mahindra & Mahindra's 6.95%. BYD, Hyundai, and Volvo take up 1% or less of the market.
Those carmakers have different electrification plans in India. Madhavan said MG has partnered with India-based steel giant JSW to produce cars for domestic and global markets. Tata aims to roll out 10 more EVs. The automaker also has secured a US$678 million government order for electric buses.
India has been a fast-growing market for electric two-wheelers, Madhavan said. The country sold over 86,000 electric two-wheelers in 2023, up more than 30% from 2022.
Government incentives have encouraged the growing sales. One of the latest was announced in March 2024: the Electric Mobility Promotion Scheme (EMPS) 2024. The program allocates US$60.38 million to boost electric two-wheeler and three-wheeler sales.
However, India's EV scale-up continues to face multiple challenges. Madhavan said more policy support is required for charging infrastructure, and battery-swapping deployment still needs financing.
EVs, semiconductors to be India's economic drivers
India's election result could also affect its electrification effort. According to Nikkei and Bloomberg, Indian Prime Minister Narendra Modi reiterated that India will achieve developed country status by 2047 after he was elected this week. Many economists estimate that India will need to grow its GDP by at least 8% from now on to reach the goal.
EVs and semiconductors made in India will be crucial for the effort, as well as the reform in infrastructure and regulations. The Indian government has agreed to lower EV tariffs to encourage carmakers to produce in the country.
India will still depend on imports of materials and components, especially from China, for its EV production. If India collides with China again at the borders, the former's supply chain might be disrupted. Modi will have to handle India's reliance on China as he aims to make India self-sufficient.
The Indian government also subsidizes the semiconductor sector. Modi has told foreign business professionals that India, the world's largest democracy, is the most trustworthy international partner as geopolitical tension rises.
US-based memory producer Micron, Taiwan-based Powerchip Semiconductor Manufacturing Corporation (PSMC), and Japan's Renesas have all decided to invest in India. However, this is just the beginning. India's semiconductor industry still needs to be fostered in the long term.
Karthi Madhavan is Country Head of Tata Consultancy Services, Taiwan. Credit: DIGITIMES
