The Indian electric vehicle (EV) market registered robust growth in 2023, with EV sales jumping 49% to 15.29 lakh units during the calendar year, according to data released by the Federation of Automobile Dealers Associations (FADA).
Experts have attributed the sharp growth in EV sales to multiple factors like rising fuel prices, government subsidies, new model launches, and growing environmental consciousness among buyers.
Key Highlights of India’s 2023 EV Sales:
- EV sales at 15,29,516 units, a growth of 49% over 2022 sales of 10,26,309 units
- Electric two-wheelers drive growth with sales at 13,02,528 units, up 44%
- Electric passenger vehicle sales at 1,72,593 units, more than double from 79,376 units in 2022
- High-speed electric two-wheeler sales jump 140% to 2,93,146 units
- EV penetration as a percentage of total vehicle sales at 5%, up from 3% in 2022
According to FADA, two-wheelers continued to dominate India’s EV market with an 85% share. Over 13 lakh electric two-wheelers were sold in the country last year, registering a 44% year-on-year growth. High-speed electric two-wheelers posted the strongest growth of 140% at 2.93 lakh units.
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Electric passenger vehicle sales also more than doubled in 2023 to 1.73 lakh units, up from 79,376 units sold in the previous year. New model launches from Tata Motors, MG Motors, and Hyundai drove demand for electric cars and SUVs.
The overall passenger vehicle market faced multiple headwinds last year like vehicle price hikes, rising interest rates, and an underperforming rural economy. However, the outperformance of electric passenger vehicle sales meant that their market share rose to 4.7% in 2023 from 2.3% in the previous year.
The top-selling electric car in the country remained the Tata Nexon EV, while other models like the MG ZS EV and Hyundai Kona Electric also gained traction.
Government Support Critical for EV Growth Story
Experts believe that government support in the form of subsidies like the FAME II scheme has been critical for driving EV adoption in the country. The FAME or Faster Adoption and Manufacturing of Electric Vehicles in India scheme offers buyers direct discounts of up to ₹56,000 on two-wheelers and ₹2 lakh on passenger vehicles.
Several state governments have also offered additional EV incentives over and above center-sponsored subsidies to boost sales in their regions.
The government has set itself a target for EVs to achieve a 30% share of private cars, 70% share of commercial vehicles, and 80% share in two and three-wheelers by 2030 as part of India’s e-mobility vision. Industry watchers believe that the 2023 EV sales growth puts the country on track to achieve these targets if supportive policies continue in the future as well.
New Launches Line-up Will Drive Momentum in 2024 and Beyond
The electric mobility sector is expected to see sustained growth momentum in 2024 and subsequent years as well, led by a strong line-up of new model launches.
In the electric two-wheeler space, startups like Ather Energy, Okinawa Scooters, Ampere Vehicles, and Hero Electric as well as mainstream two-wheeler majors like Ola Electric, TVS Motor, and Bajaj Auto are planning multiple product launches over the next 12-18 months. This is likely to lead to faster adoption across different two-wheeler segments and price points.
Similarly in electric passenger vehicles as well, incumbent carmakers like Tata Motors along with new entrants like BYD India have exciting products lined up for launch in 2024. While Tata Motors continues to lead the EV space currently, competition is set to intensify further with BYD’s entry with its electric MPVs and SUVs.
Most automakers have now committed themselves to an electric future and have earmarked massive budgets for new EV model development. This will steadily expand the options available for buyers in the eco-friendly mobility domain.
Charging Infrastructure Issue Still Needs Attention
The only area that might constrain faster mainstream adoption of EVs is the issue of the availability of charging infrastructure across the country. While matters have been improving gradually, access to easy and fast charging facilities remains limited to the major urban agglomerations.
Many first-time EV buyers also suffer from ‘range anxiety’ wherein they are unsure about obtaining a convenient charging point during long-distance travel. The central government is cognizant of this problem and has announced a fresh tranche of subsidies to speed up the roll-out of public charging infrastructure.
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Addressing infrastructure constraints will provide an additional fillip to the surging Indian EV growth story over the long term.
In summary, 2023 proved to be a breakthrough year for the Indian electric mobility revolution with sales growing at a scorching pace across most vehicle categories. The growth momentum powered by conducive regulations, evolving buyer preferences, new model launches, and infrastructure upgrades will enable India to stay firmly on course to achieving its ambitious EV penetration targets.
