EV sales in India expected to soar in 2024 after doubling in 2023. Here’s why

Electric-vehicle (EV) sales in India are poised to increase by 66% this year, following a nearly doubled growth in 2023, supported by state subsidies and improving infrastructure, as per a report by Counterpoint. This surge contrasts with slowing EV growth in key markets like the United States and China.

The report predicts that by 2030, EVs will make up nearly a third of India's personal vehicle market. Tata Motors leads the Indian EV market, which accounted for 2 per cent of total car sales in 2023, with the government aiming for a 30 per cent share by 2030.

Despite Tata Motors' dominant position, Mahindra & Mahindra and Chinese automaker BYD gained ground last year. Mahindra & Mahindra saw EV sales growth of nearly 2,500 per cent with its XUV400 model, while BYD reported over 1,500 per cent growth with its e6 MPV and Atto 3 SUV models.

Foreign automakers eye India's EV market

The Indian government last month lowered EV import taxes on certain models if carmakers commit to invest at least $500 million and start domestic manufacturing within three years, a move seen as a win for foreign automakers including Tesla. It was earlier reported that Tesla has begun production of right-hand drive cars at its plant in Germany for export to India later this year. Vietnamese automaker VinFast also plans to invest $2 billion in the country and in February began constructing a factory in the southern state of Tamil Nadu.

The surge in EV sales in India is not just a local phenomenon but also has broader implications for the global automotive industry. As one of the world's largest automobile markets, India's shift towards electric vehicles signifies a major transition for the industry. Foreign automakers are increasingly looking at India as a key market for their electric offerings, which could lead to a more competitive and diverse EV market in the country.

Challenges Ahead

Despite the optimistic outlook, there are challenges that the Indian EV market must overcome. These include the need for further investment in charging infrastructure, resolving issues related to range anxiety, and ensuring that the electricity used to power EVs comes from renewable sources to maximise their environmental benefits.

With the Indian government's supportive policies, growing infrastructure, and the entry of foreign automakers, the electric vehicle market in India is poised for significant growth in the coming years. This growth not only represents a shift towards cleaner and more sustainable transportation but also presents new opportunities for businesses and investors in the automotive sector.