EV Adoption accelerates in India despite persistent challenges

Posted on 06 Nov 2024

India’s electric vehicle (EV) sector is expanding quickly, driven by consumer interest, government incentives, and advancements in battery technology. Between September 2023 and August 2024, nearly 1.8 million EVs were registered, with a strong focus on two-wheelers. However, the sector faces challenges like high upfront costs, limited charging infrastructure, and the need for better technology. Emerging trends include battery-swapping and subscription models to support gig workers, as well as IoT for enhanced vehicle reliability. The government’s local manufacturing push under the Production-Linked Incentive (PLI) scheme and the expansion of charging networks are expected to further boost the sector, though infrastructure gaps and consumer trust remain key hurdles. Industry experts emphasise the need for a collaborative approach to realise India’s EV ambitions fully.

Image courtesy: EV Reporter

India’s electric vehicle (EV) sector is expanding at a rapid pace, fuelled by rising consumer interest, government incentives, and innovations in battery and vehicle technology. Over the past year, from September 2023 to August 2024, nearly 1.8 million EVs were registered across various categories, marking a milestone in the country’s journey toward cleaner transportation. The surge is evident in the data: two-wheeler EVs alone account for a significant portion of these numbers, reflecting the shift in consumer preferences for economical and environmentally friendly commuting options.

However, despite impressive growth, recent trends also show some headwinds that the industry must tackle to maintain momentum. A slight decline in EV market penetration across major categories such as two- and three-wheelers raises questions about the sustainability of this growth. In August, the market share of electric two-wheelers fell from 7.4% in July to 6.6%, and electric three-wheelers for passenger transport dropped from 22.6% to 21.3%. Industry experts are now analysing these trends, pointing to a variety of factors including high upfront costs, charging infrastructure challenges, and the need for greater technological advancements.

A growing market with potential beyond urban India

A significant part of India’s EV transformation is happening outside the metro cities, as smaller towns and rural areas increasingly embrace electric mobility. According to the report from EVreporter, states like Uttar Pradesh, Maharashtra, and Tamil Nadu are leading the way in terms of EV sales. Kerala and Karnataka stand out with high EV penetration rates, at 13.5% and 11.6% respectively, in the two-wheeler category. The adoption in smaller cities and towns signals a robust demand for EVs beyond urban centres, driven by factors such as lower running costs and government incentives.

The highest penetration for electric two-wheelers is being led by companies like Ola Electric and Bajaj Auto, which have established a stronghold in states like Maharashtra. Meanwhile, new players in the electric motorcycle segment, such as Revolt, are seeing steady growth in monthly sales, even as they face stiff competition from established manufacturers who are now entering the EV space.

Battery swapping and subscription models: A solution for the gig economy?

A notable trend in the EV sector has been the rise of battery-swapping models, which offer an alternative to fixed batteries and make it easier for commercial operators, particularly gig workers, to embrace electric mobility. Companies like Lectrix, a leading two-wheeler EV maker, have introduced battery subscription models aimed at users who log high daily kilometres, such as delivery personnel. This model allows riders to pay a monthly fee for battery swaps, ensuring they have a fresh battery ready whenever needed. “With just a few minutes at a swap station, a rider can cover up to 75 kilometres, making it ideal for high-usage scenarios,” a Lectrix representative shared.

This model appeals to gig workers who need reliable, continuous mobility, enabling them to avoid long charging breaks and maximise earnings. Lectrix has already rolled out swapping stations across major cities like Delhi and Bangalore and plans to expand to tier-two cities, including Kanpur and Patna, by the end of the year. Battery swapping isn’t just limited to two-wheelers; other manufacturers are exploring this concept for larger commercial vehicles, which could potentially transform logistics and last-mile delivery operations.

Tech solutions for EV reliability: The role of IoT and data analytics

As the EV market expands, one critical area of focus is ensuring these vehicles’ performance, safety, and longevity. Unlike traditional combustion engine vehicles, EVs come with unique challenges, including battery degradation and higher maintenance demands for components like motors and battery management systems. To tackle these issues, many EV companies are turning to advanced technologies, particularly the Internet of Things (IoT) and data analytics, to monitor and optimise vehicle performance.

IoT-enabled EVs can transmit real-time data on everything from battery health to engine efficiency, allowing manufacturers to detect and resolve issues before they escalate. For fleet operators, predictive diagnostics can significantly reduce maintenance costs by identifying when a vehicle part is likely to fail, scheduling repairs proactively rather than reactively. Vinay Gunasekaran, Founder of Autoven, a Pune-based EV technology company, highlights the value of IoT in improving EV reliability: “Predictive insights allow us to monitor every critical component, such as the battery, motor, and electronics, and catch any potential issue early on.”

Despite these advances, industry insiders point out that IoT technology adoption remains limited. Not all manufacturers are equipped to handle vast amounts of data, and many operate within data silos that prevent effective sharing of insights. Addressing these barriers will require a standardised approach across the industry, which would allow automakers, battery producers, and service providers to leverage IoT data for a more seamless and efficient EV ecosystem.

Policy push for ‘Make in India’: Challenges and opportunities

India’s ambitious EV goals rely on local manufacturing, reducing dependence on imports for crucial components like lithium-ion batteries and electronic parts. In recent years, the government has introduced various Production-Linked Incentive (PLI) schemes to encourage domestic production. The Ministry of Heavy Industries recently awarded battery production contracts to major Indian companies, including Reliance Industries and Ola Electric, under the PLI Advanced Chemistry Cell scheme, with a cumulative capacity of 10 GWh. These initiatives are a promising start, yet significant challenges remain, particularly when it comes to competing with low-cost imports from countries like China.

Industry leaders suggest that additional protective measures are needed to ensure India’s fledgling EV industry can survive against the pricing pressures of Chinese imports. Amara Raja, a major player in India’s battery manufacturing, is actively collaborating with international technology partners to establish a Giga factory in Telangana’s Mahabubnagar district. The company’s representatives argue that anti-dumping duties and incentives for local manufacturing could provide a much-needed boost to India’s EV sector. “Local production not only supports job creation but also mitigates supply chain risks,” said a spokesperson from Amara Raja.

The challenge of building a nationwide charging network

While battery-swapping models work for certain segments, the majority of EV owners rely on fixed batteries, creating a pressing need for a nationwide charging network. Currently, India’s charging infrastructure lags behind that of countries like China and the United States. According to recent industry data, the country needs nearly 100,000 public charging stations by 2030 to keep up with demand, a far cry from the approximately 6,000 stations available today.

Several companies are stepping in to close the gap. Charging solution providers like Exicom, which recently announced plans to acquire Tritium, a global leader in DC fast-charging technology, are ramping up their infrastructure investments. Additionally, startup Kazam has secured new funding to develop a Level-DC fast-charging solution specifically for electric two-wheelers, promising to charge up to 80% in 20 minutes. While these developments are encouraging, the lack of consistent and accessible charging facilities remains a barrier to widespread EV adoption, especially for intercity travel.

Consumer awareness and trust: A key to mass adoption

For India’s EV revolution to reach its full potential, consumer awareness and trust are essential. Many potential EV buyers are still uncertain about vehicle reliability, long-term costs, and resale value. Misconceptions around battery life and performance have deterred some customers, despite clear advantages in terms of fuel savings and lower emissions.

Manufacturers are tackling these concerns through extended warranties, subscription-based battery models, and easy financing options. EV makers are also exploring apps that allow users to monitor battery health, locate charging stations, and access service support, helping consumers feel more in control of their EV experience. However, creating mass confidence will require transparent communication about vehicle performance, clear comparisons with conventional vehicles, and assurances about maintenance costs.

Looking forward: A collaborative effort for a green future

Despite the challenges, India’s EV sector holds enormous potential. With millions of vehicles sold and an expanding network of charging stations, the industry is on the right path, though some hurdles still need to be cleared. Experts believe that a collaborative effort involving the government, automakers, battery producers, and tech innovators will be necessary to fully realize India’s EV ambitions.

As government policies push for more local manufacturing and EV companies embrace new technologies like IoT, the landscape of Indian mobility could be on the verge of a major transformation. From gig workers and fleet operators to everyday consumers, more Indians are beginning to see EVs as a viable option. However, the path to mass adoption will require continuous investment in technology, infrastructure, and consumer education.

The next few years will be crucial as India seeks to establish itself as a global leader in electric mobility. With sustained commitment from all stakeholders, India’s roads could look very different by 2030—quieter, cleaner, and lined with a new generation of electric vehicles.

Kindly follow us for updates on:

LinkedIn