There’s a lot of buzz around Electric Vehicles (EVs) in India. You must have seen so many EVs running on Indian roads, specifically in the last three to five years. What according to you are the major reasons for this change?
Let’s have a look at it and understand why the change is happening, and how the Indian EV market will grow in coming years.
It is very simple: Concern for the environment has increased people's interest in EVs. Not only that but since it just requires electric-drive components, the fuel cost may also be reduced, and that’s a deal-breaker for consumers.
According to statistics, India's market for electric cars is valued at $338.5 million. The next decade is expected to be the most significant for developing EVs in India.
India's market for electric vehicles was estimated to be worth $220.1 million in 2020, and from 2021 to 2030, it is anticipated to expand at a compound annual growth rate (CAGR) of 94.4%. Throughout the forecast period, the market is also expected to grow on the back of the attractive incentives given by the Indian government for manufacturing and purchasing electric cars.
The Center offers a low GST rate of 5% for all EVs, which is much less expensive than the tax burden that petrol and diesel vehicles must pay. Additionally, under the recently enacted section 80 EEB, the consumer may receive an exemption of up to Rs 1,50,000 while repaying the EV loan.
States have not lagged in this movement either. For instance, Gujarat announced a subsidy of Rs 10,000 per kWh of battery capacity up to Rs 20,000 to each of its first 1.1 lakh electric two-wheeler clients. The first 10,000 car buyers in the state were also eligible for a refund of Rs 10,000 per kWh of battery capacity (up to Rs 1.5 lakh). In addition, the state has provisions for registration and road tax exemptions.
Even domestic automakers are making efforts to boost EV sales. Tata Motors Ltd. and Mahindra & Mahindra Ltd. are the two Indian automakers who have aggressively tried to expand their product portfolio to include electrified cars.
Irrespective of challenges like dependence on imported batteries, lack of strong charging infrastructure network, the market for EVs could see a surge in the coming years.
With the concern over the environment and the rising price of fuel, the need for EVs has increased and it’ll continue to do so in the foreseeable future.
If proper infrastructure is provided and if it becomes affordable to masses, the EV market might become one of the biggest industries in the country.
So, this was a brief about how the Indian EV story may evolve in the coming years.
Sources: Grand View Research, Ministry of Finance, Income Tax department, NITI Aayog.
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