Electric Vehicles are gaining ground in India. A new report suggests that the new industry presents an opportunity of almost Rs 3 lakh crore in India in the five years through fiscal 2026
A study by CRISIL hints at a potential revenue of about Rs 1.5 lakh crore across vehicle segments for original equipment manufacturers (OEMs) as well as component manufacturers and ~Rs 90,000 crore in the form of disbursements for vehicle financiers, with shared mobility and insurance accounting for the balance.
The CRISIL report suggests that EV adoption is continuing to surge as more people shift from internal combustion engine (ICE) vehicles. The report also quoted Vahan portal data. The data shows the share of electric three-wheelers (3Ws) increased to almost 5% of 3Ws registered in fiscal 2022 from less than 1% in fiscal 2018. For electric two-wheelers (2Ws) and buses, the percentages rose to almost 2% and 4%, respectively.
CRISIL report claims that smaller towns are also adopting the EV route. The government’s fiscal and non-fiscal measures have pushed the buyer towards an electric option. As per Vahan statistics, the contribution of the top 10 districts in nationwide sales of electric cars and 3Ws dropped from 55-60% in fiscal 2021 to 25-30% in fiscal 2022. For 2Ws, the percentage declined from 40-45% to 15-20%.
The spike in conventional fuel costs are also contributing to this shift in consumer behaviour. The long term affordability of ICE vehicles is being impacted heavily as daily costs keep creeping up.
Central schemes such as Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME-India), Phased Manufacturing Plan, and Production Linked Incentive have jump-started the country’s EV journey.
CRISIL’s analysis of the total cost of ownership suggests electric 2Ws and 3Ws attained parity with ICE vehicles last fiscal even when running a mere 6,000 km and 20,000 km, respectively, annually. By 2026, the analysis indicates, adoption of 2Ws and 3Ws will rise even sans subsidy, due to parity of ownership cost with ICE vehicles.
Says Hemal Thakkar, Director, CRISIL Limited, “Considering the improving cost parity and the government’s focus on electrification of vehicles, we should not be surprised if EV penetration reaches 15% in 2Ws, 25-30% in 3Ws, and 5% in cars and buses by fiscal 2026 in terms of vehicle sales.”
Electric Vehicles are gaining ground in India. A new report suggests that the new industry presents an opportunity of almost Rs 3 lakh crore in India in the five years through fiscal 2026. A study by CRISIL hints at a potential revenue of about Rs 1.5 lakh crore across vehicle segments for original