Why, When and With – Electric Vehicles in India

Why, When and With – Electric Vehicles in India

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As the Electric vehicle theme is gaining momentum, stock market experts are trying to filter out companies for long term investment purposes.

While, it is important to see how India is paring against its global peers in terms of EV adoption, it is also important to gauge whether India is making the move in the right direction. This report intends to highlight the progress so far and identify the companies which stand to gain most from this growth.

Globally, 6.4mn. (~4mn Battery Electric Vehicles (BEV) and ~2.4mn Plug-In Hybrid Electric Vehicles (PHEVS) passenger EVs found their owners during 2021, an increase of ~98% compared to 2020. Most countries across the globe witnessed a surge in EV sales, with growth rates 3 to 8 times higher than that of the total light vehicle markets. Norway being the global leader in EV adoption at over 80% of all new car sales and China accounting for ~12% of all new electric vehicle sales in 2021.

Globally, EVs sales accounted for ~3.2% of total car sales in 2020, up from 2.5% in 2019.

EV adoption globally
Figure01; Source: ev-volumes.com

On the other hand, the Indian EV market is currently in its infancy with EV sales accounting for barely ~0.2% of total passenger cars sales during FY21. India sold 6,261 electric PVs till Q3FY22 and 5,905 units in FY21.

ModelsApr-Sep’21Apr-Sep’20Change Y-o-Y (%)
Tata Nexon3,6181,152214%
MG ZS1,789511250%
Tata Tigor801100701%
Hyundai Kona51101-50%
Mahindra Vertigo28-75%

Figure02; Source: autocarpro.in


CategoryFY21 (Units)FY20 (Units)Change Y-o-Y (%)

Figure03; Source: autocarpro.in

As depicted in figure 03, the pace of the transition from ICE (Internal Combustion Engines) vehicles to EVs is much faster in three- and two-wheelers but urban India is expected to plug into electric cars only gradually.

In October 2021, Union minister Nitin Gadkari announced that the government is aiming for 30% electric vehicle sales penetration for private cars, ~70% for commercial vehicles and 80% for two and three-wheelers by 2030.

Government seems to be stressing on EV adoption as it is not only going to decarbonize the transport sector but also help India reduce its consumption of crude oil by 156mn tonnes worth ₹3.5 lakh crores. But, the pace at which India is marching ahead presently, the 2030 target set by the government seems quite difficult to achieve.

“Maruti Suzuki India will launch electric vehicles in the country only after 2025 as demand for such vehicles at the moment is less” – RC Bhargava, (Chairman Maruti Suzuki India)

Indian companies listed on Indian Bourses and their EV adoption journey

  • Passenger BEV’s Manufacturers

 In 2019, the government introduced the FAME II scheme, to drive greater adoption of EVs in India with a budget outlay of Rs 10,000 crore to support 7,000 e-buses, 5,00,000 e-three-wheelers, 55,000 e-passenger vehicles and a million e-two-wheelers. Also, in September 2021, the government issued a notification regarding a PLI scheme for automobiles and auto components worth Rs25,938. This is expected to bring investments of ~Rs42,500 by 2026.

  • TATA Motors
    1. Incorporated a wholly owned subsidiary, Tata Passenger Electric Mobility Limited (TPEM), which will be involved in manufacturing of electric motor vehicles
    2. Raised $1bn from private equity major TPG Rise Climate for the EV subsidiary TPEM
    3. Plans to invest $2bn over next five years
    4. Accounts for ~71% market share through its two EV models; Nexon and Tigor
    5. Touched EV penetration of 5.6% of PV sales in Q3FY22
  • Mahindra and Mahindra
    1. Plans to carve out EV division into a separate entity to drive growth by 2025 and invest ~$0.4bn over next three years
    2. Plans to launch 16 EV’s by 2027 across SUVs and Light commercial vehicles categories
    3. Opened an electric technologies plant in Bengaluru that produces battery packs, power electronics and motors
    4. Invested in a new manufacturing unit at its chakan plant to produce EVs


  • EV Lithium Batteries Manufacturers

 Traditional Lead-Acid Battery manufacturers are foraying into manufacturing of Advance Cell Chemistry batteries hoping to take advantage of the center approved Rs18,100crs PLI scheme


  • Exide Industries
    1. Invested ~371mn in Exide Leclanche Energy, a JV with Swiss firm Leclanche, to manufacture lithium-ion batteries in India
    2. Setup 1.5GwH capacity plant to manufacture modules and the final battery pack
    3. Target to build battery energy storage system for renewable power plants


  • Amara Raja Batteries
    1. Carved out a new ‘Energy Strategic Business Unit’ encompassing lithium cell and battery pack, EV chargers, energy storage systems and advanced home energy solutions
    2. Investing €10mn in InoBat Auto, a European Group focused on R&D in the field of batteries for electric vehicles
    3. Plans to invest $1bn for a 10-12 Gwh in a timeframe of 5-7 years
  • Tata-Chemical
    1. Signed a MoU with ISRO For Lithium-Ion Battery for state-of-the-art Technology and plans to invest in a homegrown production of lithium-ion batteries in Gujarat
    2. Planning to buy Johnson Matthey, battery material firm in UK,
  • Kabra Extrusion Technik
    • Formed a subsidiary, Kabra Extrusion Technik Battrixx to focus on EV business
    • Launched 4 kWh Dual Power electric vehicle smart batteries
    • Completed major capex programme pertaining to manufacturing plant for lithium-ion batteries pack for EVs
  •  Charging Stations

The government has already sanctioned 2,877 electric vehicles charging stations across states under the Phase II of Fame Scheme. According to government guidelines, there should be at least 1 charging station at every 25kms on both side of a highway


  • Tata Power
    1. Setup ~1,300 charging stations across various Indian cities and states
    2. Joined hands with HPCL to setup EV charging station at its petrol pump across the country
    3. Partnered with TATA motors to setup 300 fast charging stations across Mumbai, Pune, Delhi, Bangalore and Hyderabad
  • ABB india
    1. Partnered with Audi India to provide charging solutions
    2. Launched world’s fastest EV charger, Terra 360 modular

Apart from the mentioned companies, IOC, BPCL, Reliance Industries, NTPC, Powergrid, Motherson Sumi, Suprajit Engineering, Minda Industries, FIEM Industries are also working in the EV Space.

Despite government initiatives there are some challenges that are delaying the EV adoption, which need urgent attention:

  • High vehicle prices due to inability to manufacture EV components locally
  • Selective loan disbursement as very few banks offer loans on selected models
  • High prices for Lithium and Cobalt (key raw material for EV batteries)
  • Non-uniform GST consideration on the EV ecosystem, with 18% GST on Lithium Batteries and 5% on EVs

While we may question the speed with which EV adoption is taking place, we can’t deny that it is definitely the next big thing of the decade.

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