The Rise of Electric Vehicles and

disruption in traditional auto industry

Introduction

In recent years, the electric vehicle (EV) market in India has emerged as a beacon of hope in
the quest for sustainable transportation solutions. As the nation grapples with pressing
environmental concerns and seeks to reduce its dependence on fossil fuels, the shift towards
electric mobility represents a transformative opportunity. This essay explores the dynamic
landscape of the Indian EV market, examining its growth trajectory, challenges, key players,
and the pivotal role of government initiatives in shaping its future.

At the heart of the burgeoning EV market in India lies a concerted effort by the government
to incentivize adoption and foster a conducive ecosystem. The Faster Adoption and
Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme, introduced in 2015, stands
as a cornerstone policy aimed at catalysing the transition towards electric mobility. Under
FAME, subsidies and incentives are provided to both manufacturers and consumers to spur
the production and purchase of electric vehicles. Additionally, various state governments
have formulated their own EV policies, complementing the national framework and further
propelling the momentum towards sustainable transportation.

Objectives
To understand the growth of the electric vehicle (EV) market in India, several key objectives
can be identified:

 Market Analysis: Conduct a comprehensive analysis of the current state of the

EV market in India, including market size, segmentation, and trends. This
involves examining data on EV sales, market share of different vehicle types
(e.g., two-wheelers, cars, commercial vehicles), and consumer preferences.
 Policy Evaluation: Evaluate the impact of government policies and initiatives on
the growth of the EV market. This includes analysing schemes such as the Faster
Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME), state-
level EV policies, subsidies, incentives, and regulatory frameworks. Assess the
effectiveness of these policies in stimulating demand, incentivizing
manufacturing, and promoting infrastructure development.
 Consumer Behaviour: Investigate consumer perceptions, attitudes, and
purchasing behavior towards electric vehicles. Understand the factors influencing
consumer adoption, such as awareness, perceived benefits (e.g., lower operating
costs, environmental sustainability), range anxiety, charging infrastructure
availability, and brand preferences.
 Technology Trends: Explore advancements in EV technology, particularly in
battery technology, charging infrastructure, and vehicle design. Assess the impact
of technological innovations on driving down costs, improving performance, and
enhancing the appeal of electric vehicles to consumers.
 Industry Dynamics: Examine the competitive landscape of the Indian EV
market, including domestic and international manufacturers, startups, and
 ecosystem players (e.g., battery manufacturers, charging infrastructure
providers). Analyze market entry strategies, partnerships, mergers, and
acquisitions to understand the dynamics shaping the industry.
 Infrastructure Development: Evaluate the progress and challenges in
developing charging infrastructure across urban and rural areas. Assess the
adequacy of charging stations, the reliability of charging networks, and
efforts to expand infrastructure coverage along highways and in key urban
centers.
 Supply Chain Analysis: Investigate the EV supply chain, including
component sourcing, manufacturing processes, and distribution networks.
Assess the localization efforts of manufacturers, reliance on imports, and
opportunities for strengthening domestic manufacturing capabilities to
support the growth of the EV ecosystem.
 Socio-Economic Impacts: Examine the broader socio-economic impacts of
EV adoption in India, including job creation, environmental benefits, energy
security, and implications for the automotive industry. Evaluate the potential
for EVs to contribute to India's sustainable development goals and economic
competitiveness.

Research Problems
Analysing the electric vehicle (EV) market in India presents several challenges and
complexities, including:

 Data Availability and Reliability: Obtaining accurate and up-to-date data on

EV sales, market share, and consumer preferences can be challenging due to
the nascent stage of the market and the lack of standardized reporting
mechanisms. Limited availability of reliable data from diverse sources can
hinder comprehensive market analysis.
 Policy Uncertainty: The EV market in India is heavily influenced by
government policies and regulations. However, policy frameworks are
subject to change, leading to uncertainty regarding incentives, subsidies, and
regulatory requirements. This volatility can impact market projections and
investment decisions.
 Infrastructure Gaps: Analyzing the EV market requires consideration of
charging infrastructure availability and reliability. However, uneven
distribution of charging stations, inconsistent standards, and issues with
interoperability pose challenges in assessing infrastructure readiness and its
impact on market growth.
 Consumer Awareness and Perception: Understanding consumer behaviour
and preferences towards electric vehicles is essential for market analysis.
However, low awareness, misconceptions about EVs (e.g., range anxiety,
charging concerns), and perceptions regarding upfront costs and total cost of
ownership can complicate market research and forecasting.
 Supply Chain Constraints: The EV supply chain involves various
components, including batteries, electric motors, and charging infrastructure.
However, challenges such as reliance on imports, supply chain disruptions,
and constraints in domestic manufacturing capabilities can affect market
analysis and forecasting.
  Economic Factors: Economic considerations, such as macroeconomic
trends, fuel prices, and consumer spending patterns, influence the adoption
and growth of electric vehicles. Analyzing these factors and their interplay
with market dynamics requires a nuanced understanding of economic
indicators and trends.

Hypothesis
Hypothesis: The electric vehicle market in India will experience exponential
growth over the next decade, driven by supportive government policies,
technological advancements, and shifting consumer preferences.

 Supportive Government Policies

 Technological Advancements
 Shifting Consumer Preferences
 Infrastructure Development
 Economic Factors

Scope Of Research
The scope of research about the electric vehicle (EV) market in India is vast and encompasses
various interdisciplinary dimensions. Here are some key areas that researchers can explore:

 Market Analysis and Trends: Conducting in-depth market analysis to

understand the current state and trends of the EV market in India. This
includes studying market size, growth projections, segmentation by vehicle
type (two-wheelers, cars, commercial vehicles), and geographic distribution.
 Policy Evaluation: Assessing the effectiveness of government policies and
regulations in promoting EV adoption and fostering industry growth.
Research can focus on analysing the impact of schemes like the Faster
Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME), state-
level EV policies, subsidies, incentives, and regulatory frameworks.
 Consumer Behaviour and Perception: Investigating consumer attitudes,
preferences, and adoption barriers related to electric vehicles. Research can
explore factors influencing purchase decisions, perceptions about EVs (e.g.,
range anxiety, charging infrastructure concerns), awareness levels, and
strategies to enhance consumer acceptance.
 Charging Infrastructure Development: Studying the development of
charging infrastructure in India, including coverage, accessibility, standards,
and investment trends. Research can assess the adequacy of charging
networks, challenges in deployment, business models for charging stations,
and strategies to accelerate infrastructure expansion.
 Supply Chain and Manufacturing: Analysing the EV supply chain,
including component sourcing, manufacturing processes, and localization
efforts. Research can explore opportunities and challenges in domestic
manufacturing, reliance on imports, supply chain resilience, and strategies to
strengthen the EV manufacturing ecosystem.

 Policy Recommendations and Roadmap: Developing policy

recommendations and a strategic roadmap for fostering sustainable growth of
the EV market in India. Research can identify policy gaps, best practices
 from other countries, stakeholder perspectives, and actionable strategies to
overcome barriers and maximize the socio-economic benefits of electric
mobility.

Type of Research

Primary Research: A questionnaire was floated to collect data from people and then
analysis is carried out to understand the changes in automobile sector in India and the
disruption due to Electric vehicles.
Secondary Research: By analysing the secondary sources such as companies’ investor
presentations, government websites, Annual reports, Sec filings etc.

Literature Review
The electric vehicle (EV) sector in India has been gaining traction in recent years due to
various government initiatives, growing environmental awareness, and advancements in
technology.
Growth Drivers
 Government Policy and Incentives
 Environmental Concerns
 Rising Fuel Prices
 Technological Advancements
 Infrastructure Development:
 Corporate Initiatives
 Consumer Awareness and Acceptance:
 Local Manufacturing and Employment Opportunities
Key Trends
 Consumer Awareness and Education:
 Rise of Two-Wheelers and Three-Wheelers:
 Expansion of EV Charging Infrastructure
 Entry of Global Automakers
 Government Policy and Incentives:
 Focus on Localization
 Integration of Renewable Energy
 Ecosystem Development
Challenges
 High Initial Cost
 Limited Charging Infrastructure:
 Battery Technology and Range
 Supply Chain Constraints
 Infrastructure Strain.
 Consumer Awareness and Education
 Policy and Regulatory Framework.
 Lack of Skilled Workforce:
Impact on the Economy
 Reduced Import Dependency
  Job Creation and Economic Growth.
 Domestic Manufacturing Opportunities.
 Revenue Generation:
 Environmental Benefits:
 Energy Security
 Innovation and Technological Advancement:
 Transportation Efficiency:
Future Outlook
 Government Support and Policy Initiatives:
 Technological Advancements
 Infrastructure Development:
 Consumer Awareness and Acceptance:
 Expansion of EV Models:
 Economic and Environmental Factors:
 Local Manufacturing and Job Creation:
 Global Trends and Partnerships:

Research Design
Sampling Design: Sampling design refers to the process of selecting a subset of individuals,
items, or elements from a larger population for the purpose of conducting a research study. It
involves specifying the procedures and techniques for selecting sample units that will be
included in the study. The goal of sampling design is to ensure that the sample is
representative of the population of interest and that the findings of the study can be
generalized to the larger population.

Questionnaire: A real time questionnaire was floated through google form to understand
Qualitatively and Quantitively about the market. The various Questions were as
follows.
Some suggestions for Electric vehicle manufacturers?
 Should Improve after sales services.
 Don't make it
 Work on battery life.
 More creative
 Better cooling systems for engines preventing their overheating and
subsequently ensuring safety for passengers
 More R&D should be done, to bring in better models in the market
 Charging station not available
 Battery life should be more & with cost effective
 Try to address pollution caused by electric vehicle batteries
 Cost
 More advancement in technology needed. Increase the range and decrease
the price.

Possible challenge that are needed to be addressed / Limitations of the Research

 The major problem while doing the primary research was the unavailability
of large data. The sample size was relatively smaller. Therefore, there can be
deviations in the findings.
  Demographic restrictions: Majority of the responses are available for the
people living in Pune city, so the demographic understanding was also
difficult.
 As Electric vehicles are in a very nascent stages, so the availability of
information is also scarce.

Findings and Outcomes of the primary research

 Poor Charging Infrastructure: The charging infrastructure for the electric
vehicles needs a rapid expansion. There is unavailability of significant
number of charging points available in the region. It makes travelling to
longer distances difficult.
 Service Centres: Electric vehicles can be serviced only at dedicated service
centres; they cannot be repaired like traditional vehicles at garages.
 Battery Life: There are cases reported where the battery catches fire thereby
damaging the entire vehicle and causing panic among potential customers.
 Environmental restraints: The Lithium batteries used in Electric vehicles
requires extraction of lithium, which is harmful for the environment. Also,
disposing the batteries once its life cycle is over requiring reserch and
development.
 Range Anxiety: The range up to which the vehicle can travel in a single
charging also requires lot of technological upgradations.
 Price: Electrical vehicles require Three times some semiconductors then
conventional vehicles thereby making them prices. As India is still depended
on imports for the availability of semiconductors which makes the vehicle
much costlier.
 Pan India Presence: Electric vehicles are available in urban centres whereas
making them available in the rural centres and making them affordable is still
a challenge.

Secondary research
There has been a global paradigm shift in how the future of vehicles will evolve. While flying
cars may not be seen as a feasible option in 2022, we have come a long way from the
traditional fuel-guzzling vehicles to alternatives such as EVs, both in two-wheeler and four-
wheeler segments. While Indian sentiments are clearly more oriented towards two-wheelers
which occupy almost 70% of road presence, this does not seem to be limiting the
development of four-wheeler EVs. India is actively investing in and promoting a market
which is predicted to hit over a 9 million units mark per annum by the year 2027. The need to
shift to an alternative fuel can be attributed to rising fuel costs and adopting cleaner energy
sources. Climate change is an increasingly relevant concern, with every major nation actively
acknowledging the problem and looking at real time solutions, which provides a further
impetus to the shift to EVs. The Indian automobile industry places heavy reliance on the use
of traditional fossil fuels and non-renewable forms of energy which has raised concerns
regarding its impact on the environment, climate change and the depletion of the non-
renewable resources. To adopt a cleaner and more eco-friendly energy alternative, India has
formulated policies to shift from traditional ICE vehicles to vehicles using alternate forms of
energy, specifically EVs. Further, dependence on fuel imports and the consistently rising
prices of conventional fuels have also prompted consumers to seek more cost-efficient
sources of transportation. These initiatives for adoption of clean engines for both commercial
and private vehicles have led to an increase in the number of manufacturers of EVs in the
short and long-distance transportation and last mile connectivity arenas.

Vehicle Category wise Market share (April 2014-2022)

0.4
3.3
3.7

32.8

59.4

Electric 3 wheelar passenger Electric 2 wheelar Electric 3 wheelar cargo

Electric car Electric bus Others

EV Annual Sales Trend in India (in ‘000)

500
455.8
450

400

350

300

250

200
170.8
146.8 140.8
150
96.8
100
56.6
50
18
3 2.4
0
FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022

Series 1

Source: Vahan Dashboard

Two-wheelers (scooters, motorbikes) and three-wheelers (autos and rickshaws) dominate
India’s automotive sector as they play a significant role in last-mile mobility in the country. 
In line with the country’s goal to achieve net-zero carbon emission by 2070, NITI Aayog
targets EVs to account for 70% of all-electric commercial cars, 30% of private cars, 40% of
buses, and 80% of two and three-wheelers by FY30.
India fragmented EV industry is driven by a few major players Hero Electric is the oldest
player in the market for two-wheelers, while Tata Motors holds the major market share in the
four-wheeler segment.
Top 5 electric two-wheeler OEMs in India (March 22)

Sales in ('000) units

19.3

22.1
75.5

37.8

47.3

Hero electric Okinawa Autotech Ampere vehicles

Ather Energy Pure Energy Rest of the players

Top 5 electric four wheelar OEMs in India ( March 22)

Sales
0.20.1

2.4

18.6

Tata motors MG motors Mahindra

Hyundai Rest of the players
Source: Vahan dashboard, SIAM
Government policy and Initiatives
National Electric Mobility Mission Plan 2020 (NEMMP)
Under the NEMMP, the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles
in India (FAME India) scheme was launched in April 2015.
 FAME, I scheme (2015–2019) primarily focused on demand creation,
technology platform, pilot projects, and charging infrastructure. It had a
budget of INR 8.95bn (USD 0.1bn) and engaged 22 OEMs that registered 80
models of electric and hybrid vehicles.
 FAME Phase II (2019–2021) is a three-year extension of FAME I, with an
allocated budget of INR 100bn (USD 1.25bn) to support the electrification of
public and shared transportation. It offers subsidies for ~1.6m EVs consisting
of buses, three-wheelers, four-wheeler passenger vehicles, and two-wheelers.
Moreover, the setting up of charging infrastructure is supported.
 According to NITI Aayog, all the EVs eligible under the FAME II scheme are
expected to save 5.4m million tons of oil equivalent (MTOE) demand and
7.4m tons of net CO2 emissions over their lifetime.
Amendments to FAME II Scheme
 In June 2021, the Ministry of Heavy Industry further amended and extended
the FAME II scheme until 2024 to push EV demand.
 Under the revised policy, the subsidy per e2W (linked to the battery size) was
increased to INR 15,000 per Kilowatt-hour (kWh) from INR 10,000 per kWh.
 ▪Additionally, e2W manufacturers producing vehicles with a minimum range
of 80 km on a single charge and a minimum top speed of 40 km per hour
would be eligible for a government subsidy, enabling 40% discount for
customers compared to the previous discount of 20%.
 Government subsidies are expected to have a cascading effect on the prices of
e2Ws, thus lifting market demand. With this, India is expected to achieve ~6
million sales of e2Ws by FY25 (Mar25)

Findings and outcomes of Secondary research

 The Electric market has seen a tremendous growth in the period of 2014-
2022.
 In this period the market has grown at CAGR of 74.74%. With supportive
government policies, increasing awareness the market is expected to grow
significantly.
However, there are certain headwinds for the sector.

Battery charging infrastructure: Lack of sufficient charging options and

lower density of charging network are among the main reasons for lesser
preference for EVs in India. As of Feb-2022, India had 1,640 operational
public EV charging points across nine Tier I cities. However, the government
has proposed to set up charging stations in a 3×3 km grid area.
Higher prices: The significant (3-4x) price disparity between EV and
Internal Combustion Engine (ICE) counterparts is one of the most prominent
barriers to the adoption of EVs in India. This results in expensive research
and development costs, battery expenses, and a shaky raw material supply
chain.

Limited options with lower mileage: As the EV market is in its infant

stages, customers have access to limited options. Likewise, lack of longer-
range vehicles and heavy battery capacity in existing products pose hurdles to
EV adoption in India. Many Indian consumers prefer long-distance travel on
a single charge, which is not feasible with the current battery technology
installed in electric vehicles.

Dependency on imports: Indian battery makers are highly dependent on

imports due to lack of lithium and other chemicals used in battery
manufacturing. This is a major setback for foreign companies willing to
invest in India’s EV industry. Meanwhile, companies in India are joining
forces with overseas entities providing resources and are transferring more
raw material production chains to India.