Grant Bharat identifies government support, enhanced affordability, infrastructure development, significant market penetration potential, manufacturing incentives, and localisation requirements as the primary forces propelling this major initiative.
Rising acceptance of electric vehicles (EVs) in India has propelled the market value to Rs 49,000 crore in 2024, with projections reaching Rs 3,18,000 crore by 2030, achieving a compound annual growth rate (CAGR) of 37%. This data comes from a joint survey by ACMA and Grant Thornton Bharat, indicating substantial growth and investment opportunities within the sector.
The report outlines several key factors contributing to this growth, including government support, increased affordability, infrastructure enhancements, high market penetration potential, manufacturing incentives, and localization requirements. Additionally, private equity and venture capital firms invested approximately USD 1 billion (Rs 8395.86 crore) last year.
Sales of EVs in the last fiscal year totalled around 16.7 lakh units, marking a 42% increase from the 11.8 lakh units sold in FY23. This surge in sales underscores the rapid adoption of EV technology in India, fueled by advancements in key components and strategies to improve EV accessibility, reliability, and efficiency.
The report also explores the significant growth potential for the Indian EV components market from 2023 to 2030, emphasizing the critical nature of 11 specific EV components like batteries, power trains, and power electronic components. These require substantial changes in manufacturing processes compared to those used for internal combustion engine vehicles.
Significant increases are also forecasted for battery and related components, rising from Rs 13,000 crore in 2023 to Rs 140,000 crore by 2030. Similarly, the powertrain and power electronics segment is expected to grow from Rs 10,000 crore in 2023 to Rs 88,000 crore by 2030, with other EV components expanding similarly.
The report categorizes these key components and their child parts based on domestic dependency and the investment or skills needed for assembly. It notes varying levels of domestic dependency and the balance between import reliance and competitive domestic capabilities.
As for EV adoption, it stood at 6.3% in FY23, with projections suggesting it could reach 30-35% by 2030, driven by new government policies, lowering vehicle costs, and the development of more charging infrastructure. Electric two- and three-wheelers are expected to dominate the EV volume in the short term, with significant adoption expected in the three-wheeler segment in urban markets due to restricted ICE permits and high demand for new EVs.
Vivek Vikram Singh, Chairperson of Electric Mobility & Telematics at ACMA, highlighted the anticipated growth in the four-wheeler segment, particularly in shared mobility, supported by government incentives and lower operating costs. He also noted the potential for 100% electrification of public buses by 2030, with adoption rates projected to reach 13-16%.
The report from Grant Thornton Bharat stresses the importance of adopting a country-wide export strategy and establishing tech partnerships with global EV technology providers to accelerate the localization of critical EV components. It suggests the formation of a dedicated technology scouting team to identify and adopt cutting-edge technologies, positioning Indian companies as significant players in the global EV supply chain.
