INDIA REPORT
Electric vehicles (EVs) witnessed strong growth in the Indian market in 2022, with a three-fold increase in sales as compared to the year before. Official data shows that Indians have bought 2,780,000 EVs since January 2023 at an average of more than 90,000 EVs per month. Significantly, the demand for EVs is not limited to metro cities such as Delhi, Mumbai, and Bengaluru, but is increasing in Tier-2 and Tier-3 markets as well.
Source: Financial Express Read The Article
PSR Analysis: While the growth of EVs has been primarily focused on urban areas of India, we are seeing a significantly improved adoption of EVs in rural parts of the country. The statistics from Vahan, the national vehicle registry, reveal that sales of electric cars and 3ws from the contribution of the top 10 districts in India has dropped significantly from 55%-60% in fiscal 2021 to 25%-30% in fiscal 2022. In the 2Ws segment, the percentage has dropped from 40%-45% to 15%-20%. The noticeable gaps here are being filled up by smaller towns and rural India.
We believe the current rural infrastructure is fueling this trend. Many rural areas in India have an infrastructure already in place for energy generation from solar panels and if the government pushes further schemes, it could develop a better infrastructure which is eco-friendly and which also can reduce the burden on the grids to provide 24/7 electricity to villages.
The energy generated from solar panels could provide electricity to run heavy irrigation motors during the day, and to charge EV vehicles at night.
Tier 2 and Tier 3 cities in India have been more welcoming to EVs which has accelerated the transition to EVs at a fast rate. Unfortunately, we believe the overall level of education and knowledge about EVs remains quite low. The industry will continue to promote EVs. At the same time, EV players must prioritize easy repairs and spare parts availability to continue the EV growth. PSR
Aditya Kondejkar Research Analyst – South Asia Operations for Power Systems Research
