EY expects a spike in electric vehicle adoption across India
Indian mobility is lagging behind in its electrification, and it’s unsurprising that electric vehicles (EVs) only account for a minor percentage of its automotive industry.
According to EY’s report, Electrifying Indian Mobility: Accelerating the pace of electric mobility, electric cars account for roughly 1% of the overall market share in CY21 and electric two-wheelers and three-wheelers dominate a combined 95% of the automotive market—almost achieving a 50:50 split.
But the consultancy firm has high hopes for the country to accelerate its EV adoption, projecting a 39% share of the market by CY27. Much of the growth in the market is a representation of the influence the travel had on the market, as well as the nature of the trips taken by the people of India. E-buses also await more traction as state governments look to implement these as part of their procurement strategies.
So why are fewer EVs adopted in India?
The report presented by EY, alongside the Indian Venture and Alternate Capital (IVCA) Association and INDUSLAW, shows the barriers to automotive firms and the government when influencing customers to switch to EVs.
Charging and infrastructure
The main issue to hinder the country’s progress in this area is charging. In the report, EY draws the conclusion that there were 1,742 charging stations in the country (at the time of the report), and infrastructure related to charging is also lacking.
With high costs and unpredictable charging rates, India’s EV Sector seems to be one of the hardest hit by the rise in energy prices. Policymakers in the country are approaching this carefully and influencing installations through legislation, which, as a result, expects to see around 100,000 charging stations installed by 2027 to cater for 1.4 million EVs.
Sourcing batteries for new EVs
India is deficient in battery resources. Metals like lithium, magnesium, cobalt, and nickel are all components required for battery production, but come at high procurement costs. In the period of 2019 to 2020, India imported roughly 450 million lithium-ion batteries, costing a total of approximately US$865mn.
There is also an inherited environmental impact from lithium, particularly in extraction, which requires a significant amount of water to achieve. Once lithium is used in batteries, they become difficult to recycle due to degradation over time.
The industry also awaits potential new battery forms as researchers look for new ways to build with higher energy density in smaller packages.
Consumer sentiments towards electrification
Indian automotive customers are struggling to come around to the idea of electrification. It’s no surprise as the industry currently has less to show for its work than those in the west. Consumers in the country are looking for cost benefits in electrification and governments provide their best efforts to incentivise the shift in mobility through financial support.