Will India EV Inc achieve 2 million sales in 2024?

Just two weeks away before calendar year 2024 bids adieu, the Indian electric vehicle industry as of today (December 15) is 128,867 EVs away from achieving a record two million-unit sales. Will India EV Inc, which at mid-December witnessed record retail sales of 18,71,133 units (up 35% YoY), achieve this milestone this year? Or will it get tantalisingly close and miss the milestone? These are key questions to which the answers will only be available as the clock revs past midnight of 2024 to usher in the new year 2025.   

Importantly, the zero-emission mobility sector’s performance in the first 11-odd months of CY2024 has been driven by democratised growth at all its segments –two- and three-wheelers, passenger vehicles and commercial vehicles (light goods carriers, heavy goods carriers and buses), some more than others. Two- and three-wheelers along passenger vehicles have registered robust doubled-digit growth, albeit sub-segments like light passenger and heavy goods vehicles have seen a decline.

After the first two weeks of December, the Indian EV industry is 128,867 units away from achieving a record 2 million sales. Will it hit the mark or miss it?

Of the first 11 months this year, which opened with January’s 145,064 units, three really stand out – the festival-laden October for being India EV Inc’s best-ever month (219,322 units, up 56%), the FAME II subsidy-ending month of March (213,064 units, up 51%) and November (192,171 units, up 25%). Other than April (115,900 units, up 4%) and May (140,657 units, down 11%), there’s been strong double-digit YoY growth all through this year as the Vahan-sourced retail sales data reveals.

The electric two-wheeler segment, which is the biggest volume driver of India EV Inc, is witnessing robust growth. Of the 10,74,008 units sold in the first 11 months of this year, electric scooters, motorcycles and mopeds account for 60% of total India EV Inc’s volumes of 1.80 million units between January 1 and end-November 2024. This segment, which has all of 210 players, has surpassed million-unit sales for the first time and is likely to wrap up CY2024 with around 1.15 million units.

The e-two-wheeler market is dominated by four OEMs – Ola Electric, TVS Motor Co, Bajaj Auto and Ather Energy – all of them having already notched their best-ever annual sales with December second-half numbers yet to be counted. While market leader Ola Electric with 400,099 units has hugely gone past its CY2023 sales of 267,376 units and become the first Indian EV maker to achieve the 400,000 milestone in a single year, TVS Motor Co has, with 210,666 iQubes, has beaten its CY2023 retails of 166,581 units. Bajaj Auto has had a stellar year with 184,577 units from January 1-December 14, and Ather Energy, with 120,721 units, has also gone past its CY2023 total of 104,734 units. Meanwhile, Hero MotoCorp, with 43,188 Vida e-scooters, has beaten its CY2023 score of 11,141 units, and Greaves Electric Mobility (33,640 units), has also surpassed its CY2023 tally of 24,043 units. These six OEMs’ combined retails of 992,891 units give them an 89.55% share of the 1.10 million units sold till December 14, 2024.

Adding to the momentum is the electric three-wheeler segment, which continues to witness the fastest transition to EVs with every second unit sold in India being a zero-emission model. This segment, which comprises of passenger-transporting rickshaws and cargo-delivering models, registered cumulative 11-month January-November 2024 sales of 631,855 units, up 20%, and have gone past CY2023’s 583,597 units to scale a new high.

While the 650,000 milestone will have been achieved in the first fortnight of December itself, it remains to be seen just how close the segment gets to the 700,000-units mark. The sustained growth in retails is a result of many factors including lower cost of ownership (compared to IC engine, CNG and LPG options), improved financing options, the FAME-EMPS and now the PM E-Drive purchase incentive scheme, increased product choice and as well as growing demand from fleet and last-mile logistics operators.

Like the e-two-wheeler industry, there’s fierce competition here too, albeit amongst the Top 6 players – Mahindra Last Mile Mobility, Bajaj Auto, YC Electric, Saera Electric Auto, Dilli Electric Auto and Piaggio Vehicles. They are part of an industry which, at last count as per Vahan, has all of 575 players! While Mahindra Last Mile Mobility remains the longstanding market leader, Bajaj Auto, which entered this sector in June 2023, is the new challenger to the throne.

CY2024 has been somewhat of a roller-coaster in terms of monthly sales for the electric passenger vehicle segment. It opened with strong sales of 8,481 units (up 146% YoY), dropped 11% month on month to 7,519 units in February, hit 9,769 EVs in the FY2024-ending month of March, dropped sharply to 6,148 units in September, and then hit its best-ever monthly numbers in October (11,165 units). Nevertheless, November’s 8,596 units have helped the segment clock cumulative 11-month retails of 89,557 units and go past CY2023’s total sales of 82,561 units.

Market leader Tata Motors is feeling the heat of the competition and its 11-month retails (57,084 units, up 4%) give it a market share of 64%, down from the 70-plus percent it commanded a year or two ago. JSW MG Motor India, which is benefiting from the launch of the new Windsor EV and its Battery As A Service sales strategy, has seen a strong surge in demand and its market share has jumped to 36% from 13% a year ago. Meanwhile, the seven luxury carmakers (2,533 units) have a 3% share of the overall ePV market in the January-November 2024 period.

The electric commercial vehicle segment too witnessed demand pick up – a total of 9,369 e-CVs were retailed in January-November, up 120% YoY (January-November 2023: 4,249 units). And the growth is there for two of the three sub-segments – buses: 3,640 units, up 91% YoY, light goods vehicles (5,536 units, up 173%) – while heavy goods vehicles saw a decline (193 units, down 39%).

EV PENETRATION RISES TO 7.40% IN CY2024 FROM 6.38% IN CY2023
There is little doubt that EV penetration levels have increased albeit it could have been higher but for some growth-impeding challenges that are being addressed by both the government and the private sector.

All put together, the 18,05,969 EVs sold between January and November 2024 account for 7.40% of the total 2.43 million (2,43,98,672 units) vehicles sold across all segments and petrol, diesel, CNG, LPG and electric-powered vehicles till end-November. This reflects an increase over the 6.38% EV penetration level in all of 2023 – 15,32,385 EVs of overall 24 million vehicles sold (2,40,10,663 units).

Electric two- and three-wheelers (17,05,971 units) together account for an overwhelming 94.50% of total EV sales in India in January-November 2024 – while e-two-wheelers (10,74,116 units) have the major share of 59.50%, e-three-wheelers (631,855 units) have contributed to 35% of the sales in the first 10 months of 2024. While electric cars and SUVs, with 89,877 units, account for a 5% share, electric buses, heavy and light goods carriers at 9,369 units account for a 0.51% share.

INDIA’S EV GROWTH STORY PICKS UP PACE
A deep dive into retail sales numbers for the past 10 years reveals just how demand has grown for EVs in India, particularly in the past three years. From 2015 to November 2024, a total of 5.26 million units have been bought. Of this, 4.36 million EVs or 83 percent have been delivered to customers in the past three years, reflecting the accelerated growth in the domestic EV industry.

The government has outlined a strategic shift to e-mobility, and has targeted EVs to account for 30% of its mobility requirements by 2030. Growing consumer awareness about the need to use eco-friendly transport and the wallet-friendly nature of EV cost of ownership over the long run is proving to be a big catalyst to adoption of electric mobility. What’s more, there’s fast-paced demand coming in from the e-commerce industry and logistics players for EVs on two and three wheels, and from taxi fleet operators for electric passenger vehicles.

Meanwhile, recognising the huge business potential, auto component manufacturers are also upping the ante on localising EV parts, either through full ground-up development or through technology licences. This is leading to enhanced optimisation of production costs and in turn EV affordability, which is the overriding growth mantra.

EV-OLUTION OF THE INDIAN ELECTRIC VEHICLE INDUSTRY 
India, which is the third-largest automobile market in the world, is among the global markets which are aggressively driving awareness and adoption of EVs as a countermeasure to its serious air pollution problem. As is known, India is home to 14 of the 20 most polluted cities in the world. By 2030, the government has targeted EVs to account for 70% of commercial vehicle sales, 30% of passenger vehicles, 40% of buses and 80% of two-wheelers and three-wheelers.

The past four-odd years have shown how India EV Inc has evolved when it comes to the overall electric mobility ecosystem. From the growing number of new EVs being launched, the enhanced level of R&D, significant investment from component manufacturers in making EV parts and creating a robust supply chain, gradual expansion of EV charging infrastructure through to exclusive EV retail showrooms from OEMs and both the Central and most State governments rolling out EV-friendly policies for EV manufacturing as well as EV buyers, the EV market dynamic is here to stay in India.

The initial cost of an EV compared to a conventional internal combustion engine remains 25-30% higher mainly due to the battery cost but as technology evolves, localization levels increase and OEMs benefit from economies of scale, EV costs are bound to rationalise and EV-ICE vehicle price parity could be foreseen in the not-so-long-term future in India.

What’s more, e-mobility is no longer an urban India phenomenon and has now spread to town and country as scores of vehicle users recognize the wallet-friendly nature of EVs while also contributing to eco-mobility.

Nevertheless, what India EV Inc is confident about is the growing adoption of electric mobility by both individual buyers and also industry, along with the considerable potential of exports of both made-in-India EVs and EV components.