Does the EV Market Appear to be Recovering After the Pandemic?

The COVID-19 impacts have been immediate and significant. The epidemic has had a substantial effect on the world’s dynamics. Automotive production is one industry where manufacturers are currently concentrating on creating measures to lessen the impact of this disease.

The pandemic has caused widespread damage to supply chains, the shutdown of assembly plants, and a further downshift in the direction of diminishing consumer demand. In addition, the Indian automotive industry is facing difficult circumstances due to its dependence on imports from China, the recent Bharat Stage VI Regulations, and the restricted movement of migrant labourers.

Along with evaluating the effects on the current vehicle industry, it’s crucial to comprehend how this will affect the rapidly growing Indian Electric Vehicle (EV) segment.

A Transition to Sustainable Mobility: India’s Current EV Scene

The global automotive market is currently witnessing a transition to sustainable mobility. This shift from traditional Combustion Engine Vehicles (ICEVs) toward cleaner and more efficient Electric Vehicles (EVs) has been spurred by various market drivers, including climate change, public health concerns, and the need for improved sustainability.

According to research firm IHS Markit, the global EV fleet is projected to grow from 1.3 mln units in 2016 to more than 20 mln units by 2025. The Indian EV market has witnessed significant growth over the past few years. It is expected to grow at a CAGR of 24% between 2017 and 2022.

The Indian EV market is expected to multiply over the next few years. However, this growth I Article nformative Does the EV Market Appear to be Recovering After the Pandemic? 13 KARREP 2022 November will come at a cost. The current EV market in India is dominated by a limited number of huge players with significant market shares. This concentration of market power and lack of competition has led to high soaring prices with limited consumer choices.

There are several challenges that India will need to overcome to encourage the widespread uptake of EVs. The primary setback is the lack of charging infrastructure. India has only about 300,000 public chargers, compared to more than 20 mln worldwide. It imposes a significant challenge on the ability of consumers to take advantage of the benefits of EVs.

Supercharging India’s EV Revolution: The Advancements that Might Alter the Country’s Competitive EV Landscape

Several advancements might alter the country’s competitive EV landscape, including the deployment of fast charging stations and a surge in electric vehicle production by small and medium-sized businesses.

The growth of these second-generation EVs could impose a check on the dominance of M&M and TATA Motors in the Indian EV market while also increasing the availability of more affordable EVs.

In 2020, the NITI Aayog proposed that the government encourage large-scale EV battery production under the ‘Make in India’ drive by providing financial incentives worth US$4.6 bln through 2030.

Besides the budgetary investment of Rs 18,000 Cr to operate more than 20,000 EV buses using a Public-Private Partnership (PPP) model, the Union Budget 2021–22 also included several potential suggestions for India’s EV landscape.

Adapting to these measures will not only boost the use of electric vehicles in public and private modes of transportation but also promote local production of batteries, parts, and other essential components, lowering the overall cost of owning and operating an EV.

Driving EV Uptake: Are Rising Fuel Prices and a Political Quandary Behind It?

The increasing fuel prices, however, will be the crucial factor favouring widespread EV adoption. Following the Covid-19 outbreak in April 2020, the price of crude oil per barrel fell to a record low worldwide; nevertheless, the government did not adjust fuel costs to reflect the decrease. Instead, it raised the excise rate imposed on fossil fuels like gasoline and diesel to minimise the fiscal deficit.

Several factors drive EV uptake, including rising fuel prices and a political quandary.

Rising fuel prices have made electric vehicles more affordable, while some government officials’ reluctance to endorse them has created an obstacle to their wider adoption. However, other factors such as limited charging infrastructure and concerns about range anxiety are also likely to play a role in hastening the Evolution in India.

To make EVs more widely acceptable, available and affordable to the masses, the Indian public and private sector industries must collectively adapt and portray splendid work.

Concurrently, advances such as the deployment of fast charging stations could help to make the transition easier for consumers. It will not only reduce the costs of ownership for EVs but could also increase their range and make them more attractive to buyers.

Conclusion

Electric vehicles are gradually gaining traction in India as an alternative to surging fuel prices and an effective option for the environmental crisis concerning carbon footprints. However, the political quandary is a secondary factor in making them more affordable and accessible.

A collateral engagement of the government policies and the EV industry players holds the massive potential to drive consumer behaviour and preferences toward EV sustainable technology.

Advances such as the deployment of fast charging stations and accessible policies and affordability could help to make the transition easier for consumers.