Automakers look to India's rising EV market

Automakers are witnessing a high growth potential in India's EV market. Local EV giant Tata Motors may face rising competition from global automakers looking to expand in India's EV market.

Citing S&P Global Ratings, Gadget360 reported that India is a ripe target for EV firms, where EV sales more than doubled in 2023 from a year earlier.

Still, according to S&P Global Ratings, EVs accounted for less than 2% of light vehicle sales in the last 12 months, and no Indian company is likely to have a meaningful global share in the foreseeable future due to the slow penetration In India. S&P Global Ratings adds that Tata Motors, the largest EV automaker in India, will sustain its leading position despite rising competition.

With rising EV sales come rising EV launches, The Economic Times reported that 11 out of 48 passenger vehicle launches scheduled for fiscal 2024 (April 2023 to March 2024) are electric luxury vehicles, almost doubling the six out of 54 launches in fiscal 2023. Besides, sales of electric luxury passenger vehicles rose by 142% in fiscal 2023, more than four times faster than the luxury PV market.

Mercedes-Benz, India's largest luxury car brand, expects EVs to account for 25% of total sales by 2027 in India, adding that the company is planning to ramp up EV sales in the South Asian country with four new EV launches in the next 8-16 months. Meanwhile, Audi expects 15-20% of its sales from EVs in the next few years.

According to DIGITIMES Research analyst Evan Chen, only five out of the ten largest automakers in India have offered EV products, including Tata, Hyundai, Mahindra, Kia, and MG Motors. Currently, Tata accounts for about 80% of EV sales (excluding electric two- and three-wheelers) in India. However, competitors are scaling up their investments to expand in the emerging EV market.

A couple of days ago, Hyundai said it would invest INR200 billion (US$2.45 billion) in India in the next ten years for EV, batteries, and EV parts business. MG Motor plans to invest over INR50 billion to build a new plant and target 65% of its Indian sales from EVs from 2026.

Source: Vahan Dashboard, May 2023