The Registrations of electric/fuel cell vehicles in India attained a value of 5,000 Units in 2020
The indicator recorded a historical growth (CAGR) of 77% between 2017 to 2020, and is expected to grow by...
GlobalData projects the indicator to grow at a CAGR of...
Automotive Industry in India
The auto market in India’s has experienced much tumult in the past few years the fundamentals for market growth remain strong. COIVID-19 and recent economic weakness have served to delay the growth trajectory of the market.
India’s market slowdown predates the pandemic. Sales in the second half of 2019 weakened considerably. However, an acute economic slowdown hit H2. The events of 2019 were nothing to what unfolded in 2020 due to the pandemic. The biggest Covid-19 induced GDP fall among the world’s large economies. At the forefront of the economic slowdown has been the automotive sector. Notoriously not a single vehicle was registered or produced in India in April 2020 due to India’s social and economic lockdown.
Electric vehicles in India
India has some of the most polluted cities in the world and is still largely dependent on coal. Following other countries that have announced the phased banning of internal combustion engine (ICE) vehicles, the Indian government has set itself the target of turning almost one-third of all vehicles’ electric by 2030. This target was scaled down as the transition to battery-powered vehicles is expected to be slow and the country still needs to build the necessary charging infrastructure to sustain it.
Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME)
To assist in reaching its target of almost one-third of all vehicles being electric by 2030 the government introduced an incentive scheme, Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME), in 2015. FAME takes care of the consumer side of the equation by introducing incentives to reduce the purchase price of EVs and hybrids and help usher the market towards early adoption.
A longer-term issue stemming from connected, autonomous, shared, and electric (CASE) is the significant decrease in industry volume if CASE strategies all pay off. This will pivot the industry to mobility and change its value proposition from vehicles sold to miles travelled. Similarly, if the take-up of shared mobility by Generation Z onwards becomes the new normal, only fleet operators will be vehicle purchasers. This commoditizing mobility trend is a particular challenge for premium automakers, whose brand equity is tied to drive quality.
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