The newest Canalys analysis reveals that India’s gentle automobile market grew by 20% in Q3 2023, reaching 1.1 million items, in comparison with 0.92 million items in Q2 2023. Electric autos (EVs) constituted 2.3% of the market share, experiencing a decline of 15% in comparison with Q2 2023, with 25,000 EVs offered. 

India, the fourth-largest gentle automobile market globally, noticed continued gross sales momentum in Q3 2023. Consumers have a variety of selections, together with CNG and BEVs. The authorities’s emphasis on transferring away from fossil fuels to alternate options is obvious. The ongoing festive season and powerful demand from the rising center class with elevated disposable earnings resulted in distinctive gross sales. However, the EV market skilled a slowdown.

Tata Motors continued to dominate the EV market in Q3 2023. It offered over 17,000 items, representing 70% market share, however witnessed a decline in EV gross sales of 15% in comparison with the previous quarter. Meanwhile, MG noticed a wholesome 6% development led by good gross sales from the reasonably priced MG Comet, taking a 17% market share.

Many gamers, together with Mahindra, Citroen and Kia, had slowed down gross sales as a result of value of the EV being greater than that of the ICE engine autos. Thus, patrons traded off EVs for greater variants of ICE engine automobiles. Mahindra, which offered over 2,200 items of XUV400 gross sales in Q2 2023, dropped to only 900 items in Q3 2023, whereas Citroen eC3, which offered over 1,100 items in Q1 2023, might promote solely round 400 items in Q3 2023.

Hyundai and Kia, led by Ioniq5 and EV6, offered 430 and 200 items, respectively, commanding a mixed 3% market share. BYD, aiming for a 30% market share by 2030, made strides with a 2% share from the Atto 3 throughout Q3 2023.

Despite India being a significant world auto market with a number of authorities incentives, it stays a laggard in EVs. The authorities goals for 30% of autos offered to be EVs by 2030, however the market is gradual to catch up. Domestic gross sales of EVs have greater than doubled, however they barely signify 2.6% of the overall light-vehicle gross sales from Q1 to Q3 2023.

As India strives to beat its lag in EV adoption, vital initiatives and product methods form the panorama for a transformative 2024.

Government initiatives and incentives purpose to spice up and ease new entrants

The authorities is reaffirming its dedication to the EV sector, proposing reforms just like the FAME (Faster Adoption and Manufacturing of Electric Vehicles) India, tax reductions and production-linked incentives to spice up EV market penetration. With a price range of Rs 10,000 crores (US$1.2 billion), the present FAME II scheme has already disbursed Rs 5,228 crores (US$0.62 billion) in subsidies as of December 2023. FAME II is ready to finish in March 2024 and discussions are underway to increase or substitute it with a modified production-linked incentive (PLI) scheme for the auto sector, together with passenger EVs. This new auto PLI 2.0 would cowl all kinds of EVs, making a stage enjoying discipline for all gamers and doubtlessly aiding negotiations with Tesla for a producing plant in India. The scheme might be open to present and new gamers, permitting flexibility and inclusivity.

Rise of electrical SUVs and Crossovers to enhance selections in 2024 and past

India’s SUVs and Crossovers section has expanded organically in recent times. The inherent desire for SUVs is because of their spaciousness and perceived security, which is now coupled with the rising attraction of electrical mobility. Many automakers have launched SUVs and Crossovers in numerous sizes and value ranges, and extra might be added within the coming time, the preferred being the small and sub-compact SUVs such because the Tata Nexon and compact SUVs comparable to Mahindra XUV 700. EVs will comply with this development, too.

Currently, SUVs signify about 38% of the sunshine EVs. The launch of recent entrants, comparable to Tata Punch EV and Hyundai Exter EV in early 2024, will compete with Citroen e C3 and fall within the value vary of Rs 11 lakhs to 14 lakhs (US$13,200 to US$16,800), considerably increasing this section. On the opposite hand, Maruti Suzuki eVX, Hyundai Creta EV and Honda Elevate EV are on account of launch their SUV, which can purchase a big market share in 2024-2025.

While the present e-SUV market is nascent, with an estimated 30,500 items offered in Q1 to Q3 2023, Canalys forecasts that the EV market in India will develop to over 300,000 items in 2025, representing over a 6% market share of the overall gentle automobile market, attaining a CAGR of 59%. This exponential trajectory underscores the immense potential of this section.

New gamers to enter the Indian EV area in 2024 to fabricate, promote and export

Tesla’s plans to arrange a plant in India might be made public in January 2024. Tesla will make investments as much as US$2 billion to arrange an area manufacturing facility in India and search a tariff concession of 15% on imported autos throughout its first two years of operations in India, aiming for early entry to the market. Tesla will begin promoting Model 3 and Model Y in 2024, and the primary made-in-India fashions might be priced as little as Rs 17 lakhs (US$20,000).  

VinQuick, Vin Group’s EV arm, will enter India in 2024, initially importing and establishing native manufacturing in 2025. The purpose to launch VF7, VF8 and VF6 fashions in 2023-2024, priced between Rs. 35 lakhs to Rs. 60 lakhs (US$42,000 to US$72,000), signifies an ambition to not solely cater to the Indian market but additionally to export and acquire a foothold within the increasing EV sector in India.

JSW Group entered a three way partnership with SAIC Motors, which owns MG Motors India, and can maintain a 35% market share. It goals to deal with manufacturing EVs and can launch seven fashions by 2025, which embrace hybrids and EVs, together with updating its present ICE autos. This will assist MG Motors to broaden in India amid constraints on account of Chinese investments.

India wants a method to stimulate EV demand

In conclusion, regardless of rising competitors in 2023, Canalys anticipates Tata to take care of market dominance, particularly with the Tiago standing out as probably the most reasonably priced EV, whereas MG is gaining floor. The momentum is predicted to persist in 2024 as Tata and Hyundai introduce Punch EV and Exter EV. Their success in capturing vital volumes will depend upon aggressive pricing. Despite the current slowdown, there may be potential to extend EV market share to over 3.5% in 2024.

The authorities is eager on selling electrical mobility and the FAME scheme performs a pivotal position in selling sustainable development by offering subsidies for the acquisition of EVs. The authorities can prolong the Fame II scheme for a couple of extra years, a choice which might be made throughout the price range 2024. It can deal with leveraging insurance policies to encourage new entrants, comparable to Tesla, to fabricate and export from India.