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Global EV sales rose a dramatic 65% from 2017 to 2018, for a total of 2.1 million vehicles, with sale figures steady through 2019. However, the subsequent outbreak of the coronavirus pandemic resulted in a 25% decline in EV purchases during the first quarter of 2020.

Despite these setbacks, EV demand is again expected to rise. The EV sector is emerging with very diverse business models designed by companies to respond to the significant barriers to EV adoption: limited driving range, limited availability of charging infrastructure, long recharging times, and high costs.

The Indian EV Industry is in its nascent, while there is a vision for 100% electric vehicles by 2030, most industry experts indicate that around 40-45% EV conversion by 2030 is a realistic expectation. A major push towards EVs will be led by the public transportation requirements in India – Fleet cars, E-Buses, 3 wheelers and 2 wheelers. Personal vehicle options for EVs will still be a relatively smaller element in the whole pie.

Department of Heavy Industry has allocated funds of ₹1,000 cr to develop charging infrastructure in India. As a result, 1,000 charging stations are expected to be installed across cities and highways. The Ministry of Power has also mandated enabling 20% of parking spaces in commercial and residential buildings, which will create thousands of charging points across India. Most major OEMs are planning EV launches, resulting in multiple options for customers. Besides, cost reduction in EV components is expected through economies of scale and localization, allowing OEMs to bring EVs in more mainstream vehicle segments.

Over the past two years, there have been significant developments.

• Several higher range of Electric Vehicle is being introduced in the market.

• Strong demand for fleets due to the low running cost of EVs.

• Besides, several fleets installed their captive chargers, driven by the full total cost of EVs’ ownership advantage.

• The government also drastically brought down the cost of EVs through FAME II subsidies of up to 3 Lacs for EVs in commercial use, reduced GST rate to 5%, waiver of road tax & registration in several states, and income tax benefits of up to 1.5 Lacs for individuals.

• OEMs offered higher warranties and AMCs to support fleets and address their anxieties.

EV is now only 20-30% more expensive than that of a comparable ICE vehicle. With special state incentives in Delhi & Mumbai, the on-road price is inching close to an equivalent ICE vehicle. Considering that the running cost of an EV is 20% – 25% of an ICE vehicle, this differential is quickly recovered over a few years of vehicle ownership. OEMs offer an eight-year warranty on battery and motor to completely allay all concerns on durability and reliability. As a result, today’s vehicle intenders have a strong reason to consider EVs.

As a result, EVs’ future is bright in India, and we will see accelerated EV adoption over the next few years as customers realize the benefits of EVs. The EV revolution has kick-started and will transform mobility in India over the coming years.