India is the world's third-largest automotive market, after China and United States. In the field of electric vehicles, the performance has been striking, according to the Federation of Automobile Dealers Associations of India, the country's electric vehicle sales in fiscal year 2023 (April 2023 to March 2024) are about 90,000 units, although the year-on-year increase has nearly doubled, but only 2% of the total car sales that year.
India's determination to vigorously develop electric vehicles has its urgency. Local oil resources are scarce, and the development of electric vehicles can help reduce oil imports and foreign exchange outflows. To this end, a number of policies have been introduced to increase the production capacity of local electric vehicles and attract foreign automakers to invest in factories, as long as companies commit to invest at least 41.5 billion rupees (about 3.5 billion yuan) and start producing electric vehicles in local factories within three years, they can get tax incentives.
Viet Nam EV manufacturer VinFast has broken ground on an integrated EV plant in Tamil Nadu; Ford, which withdrew from the India market in May 2022, plans to start a previously closed plant in Chennai, the capital of Tamil Nadu, as its export manufacturing base; Korea's Hyundai Motor has announced that it will invest 200 billion rupees in Tamil Nadu within 10 years.
A report released by Counterpoint Research predicts that India's electric vehicle sales will increase by 66% year-on-year this year, and the penetration rate will increase to 4%, and electric vehicles are expected to account for nearly one-third (29%) of the market by 2030.
Local car company Tata Motors (TATA) is the absolute leader in India's electric vehicle market, with a strong product portfolio and strategic cooperation with Uber, with a market share of up to 70%. According to public information, Tata Group, founded in 1868 and headquartered in Mumbai, India, is the largest private enterprise group company in India, known as "India's first consortium", with business in more than 80 countries and regions around the world, with about 456,000 employees.
In 1945, the group entered the automotive industry with the establishment of Tata Motors, which has grown to become the largest integrated automotive group in India, with Tata, Land Rover, Jaguar, Rover, Daimler, Lanchester and other brands, covering small cars, buses, medium and heavy goods vehicles.
In 2020, Tata Motors officially launched electric vehicle products, which is the first India car company to start the layout of electric vehicles. Models such as Nexon EV, Tigor EV, Tiago EV, and Xpres-T are favored by consumers, with the Nexon EV being the first electric vehicle in India to sell more than 10,000 units. The car is available in two models, the entry-level Nexon EV Prime and the upgraded Nexon EV MAX, with a 30.2 kWh battery and a 40.5 kWh battery, respectively, with a range of 312 km and 453 km in India's ARAI standard operating conditions.
However, it is worth noting that Tata Motors' market share in 2023 will decline by 17 percentage points year-on-year. The 2nd-5th places are MG (MG) 14%, Mahindra & Mahindra (7%), Citroen 2%, and BYD 2%.
SAIC Motor was the first Chinese automobile company to enter the India market and set up factories there. In 2017, it spent 3.275 billion yuan to acquire and renovate GM's HALOL plant in Vadodara, Gujarat, and transformed it into a vehicle manufacturing base and supporting industrial park. Electric vehicles currently launched in India include the ZS EV, Comet EV, and Windsor EV.
Mahindra, a local car company, increased its sales by nearly 25 times last year with only one model (pure electric SUV XUV400); BYD's growth rate is close behind, with an increase of more than 1,500% in 2023. It is positioned as a high-end model, with the previously launched e6 MPV and Atto 3 SUV priced at more than Rs 3 million. The third model, the Seal, starts at INR 4.1 million.
Write at the end
Although India has set ambitious EV rollout targets, it will not be easy to achieve. First of all, the local infrastructure is not yet perfect, especially the lack of charging infrastructure, which makes it difficult to increase consumer willingness. Secondly, the cost of buying electric vehicles is high, and price-sensitive consumers tend to choose cheaper and fuel-efficient Japanese and Korean small fuel vehicles.
India wants to build an electric vehicle manufacturing center, which is also difficult, and the industrial chain and technical personnel gap is serious. The manufacturing of power batteries, the core components, is facing the problem of heavy dependence on imports of raw materials. In addition, in recent years, the behavior of "pit foreign capital" has made many foreign companies have a strong wait-and-see mood.
Just in April this year, SAIC MG India changed from a wholly-owned company to a joint venture, and India steel company JSW MG Motor acquired a 35% stake in the new joint venture, while SAIC's stake was diluted to 49%, but fortunately retained control.