New Delhi: India’s electric vehicle (EV) market achieved a historic milestone in 2024, crossing 2 million units in sales for the first time, according to JMK Research. To boost this growth further, ahead of the Union Budget FY2025-26, experts have outlined critical recommendations to sustain the momentum of India’s EV revolution.
This remarkable 24% year-on-year growth underscores the country’s shift towards sustainable mobility. As of 2024, India hosts over 5.6 million EVs, with an 8% penetration in the overall vehicle market, up from 6.8% in 2023.
The EV two-wheeler segment led the charge with 1.2 million units sold, marking a 30% year-on-year growth. This was followed by the three-wheeler segment, which recorded 694,466 units sold, representing an 18% market share.
The electric car segment also saw steady progress with 99,848 units sold, while the electric bus market experienced a 39% surge to 3,834 units, spurred by government incentives under the PM E-Drive scheme.
Industry Experts Highlight Key Expectations
Bhavay Garg, Director, Warivo Motor India Pvt. Ltd. emphasized the importance of fostering growth in the two-wheeler EV segment. “The government should prioritize investments in R&D infrastructure, skill development, and advanced testing facilities,” he said. Garg also highlighted the role of battery-swapping solutions in reducing upfront ownership costs and called for expanded charging networks to address range anxiety.
Hyder Khan, Director and CEO, Godawari Electric Motors, acknowledged the government’s proactive measures, such as the proposed 80% subsidy for fast chargers under the PM E-Drive scheme. However, he stressed the importance of sustained interim support as subsidy regimes phase out.
“We urge the government to introduce policies that incentivize local manufacturing of critical EV components, including batteries and powertrains,” Khan said. He also advocated for rationalizing GST rates on battery-swapping solutions and expanding charging infrastructure in semi-urban and rural areas.
Kunal Sharma, Partner, Singhania & Co. focused on the need for domestic manufacturing support through performance-linked incentives, particularly for batteries and EV components. “Strengthening charging infrastructure by classifying it under the ‘infrastructure industry’ and enabling priority sector lending is highly desired,” Sharma remarked. He also highlighted consumer-focused measures such as tax credits and reduced interest rates on EV loans to drive adoption.
Shiv Sapra, Partner, Kochhar & Co. emphasized the need for GST reductions on EV batteries, stating, “This will not only incentivize manufacturers but also lower costs for end consumers.” He further recommended classifying EV charging infrastructure as part of the “infrastructure industry,” which would enable cheaper financing and attract investments. Sapra also noted the significance of the PM E-Drive scheme, adding that it ensures “less reliance on subsidies compared to FAME-III.”
Jay Parikh, Partner, Cyril Amarchand Mangaldas stated that apart from the continuing pain points affecting the industry such as charging infrastructure and battery costs. “The industry would also like to wish for more consumer focused initiatives to encourage individual adoption, simplified GST structure (in relation to auto part classification) and a staggered approach to reduction in subsidies,” he added.
India’s EV sector is at a critical juncture, with record-breaking sales in 2024 reflecting growing consumer demand. As the Union Budget FY2025-26 approaches, industry stakeholders are optimistic about measures to strengthen domestic manufacturing, enhance affordability, and expand charging infrastructure. These steps are expected to solidify India’s position as a global leader in sustainable mobility while empowering consumers and manufacturers alike.
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