Only 10% of Indian vehicles will be EVs: Report

They are slowly and silently making their way onto the streets in India. There is no doubt that electric vehicles (EVs) will drive into the future with falling prices of batteries and rapid advancement in technology. But the question remains: When will India finally reach its destination of achieving complete electric mobility? Maybe not so soon.

A report by Bloomberg, called New Energy Finance Long-term Electric Vehicle Outlook 2018, expects that EVs will represent just 10% of India’s total passenger vehicle fleet in 2040. Though the pace of electrification will vary, it is much slower than China’s. The report expects the ‘dragon’ will continue to be the largest EV market in the world through 2040.

Unlike China, the report says that the Indian government has not shown any appetite to provide the subsidies required to make electric passenger vehicles (four-wheelers) affordable for citizens. The study also highlights that the majority of India’s electricity retail utilities (discoms) do not have the financial resources to invest in charging infrastructure, which the two state-owned Chinese utilities did. Uncertainty on policy support, and affordability and access to reliable charging infrastructure also pose a significant challenge, adds the report.

In the immediate future, the increased demand will come from Indian government procurement activity.

“Low average vehicle prices will inhibit EV uptake for the next 10 years. After 2030, we expect EV sales in India to accelerate with increased affordability, as well as the government’s efforts to ensure universal access to electricity, which lower challenges with charging infrastructure” says, Ashish Sethia, head of research, Asia Pacific, Bloomberg NEF.

In 2017, 1.1 million EVs were sold globally, up from 0.7 million in 2016, a 57% increase. By 2040, 55% of all new car sales and 33% of the global fleet will be electric, adds the report. It expects upfront cost parity between EVs and internal combustion engine technology beginning in the mid-2020s.