EV Market in India to Grow at 44% CAGR between 2020-2027: IESA

The electric vehicle (EV) market is expected to grow at CAGR of 44 per cent between 2020 and 2027 and is expected to hit 6.34-million-unit annual sales by 2027, in base case scenario, as analyzed by India Energy Storage Alliance (IESA).

IESA in its 2nd annual report titled ‘India Electric Vehicle Market Overview Report 2020-2027’ covers the present scenario and forecast of EV, its batteries and the public charging infrastructure market in India.

The EV sales in India stood at 3,80,000 in 2019-20, and the EV battery market stood at 5.4GWh during the year.

As per the report, annual battery demand is forecasted to grow at 32 per cent to hit 50GWh by 2027, of this, 40+GWh will be on lithium-ion batteries. The estimated battery market potential is USD 580 million in 2019 and is forecasted to grow to USD 14.9 billion by 2027.

The electric two-wheeler (e-2W) market took up the highest share in 2019-20. Currently, low- and medium-speed e-2W (up to 40 kmph) with conventional lead-acid batteries are dominating the market as they are already at par in terms of upfront cost with Internal Combustion Engine (ICE) vehicles, the report added.

Secondly, high-speed segment with Li-ion batteries is also gaining momentum slowly. With more companies getting FAME-II certification in 2020, sale of high-speed e-2Ws is also expected to increase rapidly in next two years, it further said.

Going forward, for the exponential growth of this segment, the market is demanding for quality 2Ws, which can compete with ICE vehicles in terms of both cost and performance.

IESA also predicted that, the electric bus market in India is expected to be driven with subsidy support from the Central Government in phase-1 (2023-24) due to high upfront cost.

So far, FAME-I and FAME-II schemes have been the key drivers of e-bus market in India.

The low-speed electric three- wheeler (e-3W) market in India has grown very rapidly in different parts of the country since 2013.

The high-speed e-3W (L5) market is currently at a very nascent stage and has opened mainly at the B2B or in cargo segment due to requirement of performance vehicles. Low-cost financing is a key constraint hindering the growth of this segment.