Sri Sri University

A Roadmap for The Electric Vehicle

Market in India – Prospects and
Challenges
Capstone Project

Ashutosh Patra
FMS-MBA-2020-22-034
Guide – Dr. Sanjeev Arora
 Preface

This report is a capstone report. A capstone project is a final project that students do during
their senior year of high school or at the conclusion of an academic programme. A capstone
project is a self-contained research project in which a student assesses the volume and depth
of theoretical information acquired throughout training and the capacity to apply it to real-
world issues. In terms of the present state of research, the study addresses a specific scientific
subject that is both fresh and pertinent. It is both theoretically and practically significant. A
report gives you immense knowledge about the topic because the person writing the report
goes through various primary and secondary research. Also, a report is very helpful to the
people who are reading it to gain knowledge.

This report has helped me gain knowledge regarding the Global Electric Vehicle market
especially in India. I also gained knowledge on the technology advancements that are going
on to make Electric Vehicles more convenient for the general public. This report has also got
the roadmap for the EVs i.e., the existing, emerging and future EV market in India. The
benefits and challenges are also mentioned.

I also learnt about customer perception about Electrical Vehicles through Surveys and face to
face interviews. Any information from other websites that are used while conducting research
has been given due acknowledgement. As an enthusiast of motor vehicles, I learned a lot
while writing this report.

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 Acknowledgement

It is difficult to adequately express my gratitude to those who have shared their expertise and
knowledge and without whom the completion of the project report would not have been
possible.

This project bears the imprints of many people. I would like to thank the people who spent
their valuable time in filling up my questionnaire for the survey. I would like to thank Sri Sri
University for giving me opportunity to work on this report and gain utmost knowledge
through practical and theoretical ways.

I would also extend my heartfelt thanks to respected Sir Dr Sanjeev Arora (Faculty Guide) for
giving me his valuable guidance, support and all the facilities that were required to execute
this project report.

This Capstone project is written by encouragement and prodding of all the people who have
devoted their valuable time and help in the completion of this project.

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 Table of Contents

NO. CONTENTS PG NO

1. Introduction to Electric Vehicles

2. Objectives of the Report
3. Global EV Market
4. EV Market in India
5. Existing EV Ecosystem in India and Investment Outlook
6. Emerging EV Market in India
7. The Development of Electric Vehicle & Charging Technology
8. The Environmental Impacts of EV
9. Challenges faced by the EV Industry
10. Benefits from EV
11. Questionnaire and Findings
12. Conclusion

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Introduction to Electric Vehicles

An electric vehicle (EV) is one that uses an electric motor rather than an internal-combustion
engine (ICE) that burns a mixture of gasoline and gases to generate power. As a result, such a
vehicle is being considered as a potential replacement for current-generation automobiles in
order to solve issues such as growing pollution, global warming, natural resource depletion,
and so on. Despite the fact that the concept of electric vehicles has been around for a long
time, it has garnered a lot of attention in the last decade as a result of the rising carbon
footprint and other environmental implications of gasoline-powered vehicles.

Objectives of the Report

This report gives us an insight on the global market share, the existing and emerging EV
market in India. This report enlightens us with the initiatives taken by the Indian government
and the private sectors to promote EVs and the future roadmap for the Electric Vehicles. The
advancing technology, benefits and the challenges faced by the EVs are mentioned in this
report. A questionnaire was circulated among my contacts and the findings and conclusion
about EVs are also mentioned in this report.

Global EV Market

In the last decade, the global market share of electric vehicles has increased dramatically, and
we expect this trend to continue. The number of light electric vehicles on the road worldwide
increased by only 9% in 2019 compared to 2018. This marked a significant departure from the
preceding six years' growth rates, which ranged from 46% to 69%.

The drop in sales in the second half of 2019 in the two major markets, China and the United
States, were the reasons for this adjustment. EV sales climbed globally despite stagnating
growth in the two largest countries, thanks in large part to Europe, which saw a 44 percent
increase.

The global electric car stock reached ten million units in 2020, up 43 percent from 2019 and
accounting for 1% of the market. In 2020, BEVs made up two-thirds of new electric car

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registrations and two-thirds of the stock. China has the largest fleet, with 4.5 million electric
vehicles, but Europe saw the largest annual rise, with 3.2 million vehicles sold in 2020.

In the year 2020, around 3 million new electric vehicles will be registered. With 1.4 million
new registrations, Europe took the lead for the first time ever. With 1.2 million new electric
car registrations, China came in second, followed by the United States with 2,95,000 new
electric car registrations.

2021 was miles ahead in terms of sales when compared to 2020. Europe (1.06 million new
registrations) and China (1.149 million new registrations) are predicted to have the biggest
share of new electric car registrations in 2021, followed by the United States (297 000 new
registrations). Electric vehicle registrations in Europe have increased at a far higher rate than
elsewhere since 2019, thanks to stimulus measures implemented by numerous European
governments.

EVs will play a key part in achieving the ambitious goal of zero emissions by 2030, and the
industry is definitely preparing for it. Another promising indicator is the rate at which electric
vehicle sales are increasing.

EV Market in India

In 2010, India made the first concrete decision to incentivize electric automobiles. The
government announced a financial incentive for makers of electric vehicles sold in India, as
part of a Rs 95-crore scheme approved by the Ministry of New and Renewable Energy (MNRE).
The scheme, which went into effect in November 2010, provided incentives of up to 20% off
ex-factory vehicle pricing, subject to a cap. The MNRE, however, later cancelled the subsidy
programme in March 2012.

In 2013, India announced the 'National Electric Mobility Mission Plan (NEMMP) 2020,' which
aims to make a significant shift to electric vehicles while also addressing national energy
security, vehicular pollution, and the expansion of local manufacturing capabilities. Despite
the fact that the objective was to provide subsidies and build infrastructure to encourage
electric vehicles, it was essentially a paper plan. Then-finance minister Arun Jaitley pledged
speedier adoption and production of electric vehicles (FAME), with a first outlay of Rs 75

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crore, when delivering the Union Budget for 2015-16 in Parliament. The programme was
announced with the goal of increasing clean-fuel vehicle sales to 7 million by 2020.

The electric vehicle market in India was valued at USD 5.47 billion in 2020, and it is predicted
to increase at a CAGR of 23.47 percent to USD 17.01 billion by 2026. (2021-2026).

The COVID-19 epidemic wreaked havoc on the auto industry, reducing demand for electric
cars, two-wheelers, and three-wheelers. Total electric vehicle registrations dropped 20% in
FY21 to 236,802 units, down from 295,683 in FY20, according to the Society of Electric Vehicle
Manufacturers (SMEV). However, as EV sales increase, the market is likely to develop in the
forecast term.

The Indian government has taken a number of steps to encourage the manufacture and
acceptance of electric vehicles in the country.

➢ The Indian government has granted tax breaks and subsidies to EV makers and consumers
in order to stimulate the indigenous electric car industry.
➢ In India, the Ministry of Power clarified that operating electric vehicle charging stations
does not require a licence. The government views EV charging stations as a service rather
than a sale of power, which is why it is not required to have a licence.
➢ All battery-operated, ethanol-fuelled, and methanol-fuelled cars will be excluded from
the permission requirement, according to the Ministry of Road Transport and Highways.

To maintain the country's energy security, the government launched the Go Electric campaign
in January 2021. Concerned about the high cost of importing fossil fuels, the Ministry of Road
Transport and Highways launched a campaign to promote low-cost, environmentally friendly,
and locally produced electrical goods. The federal government's plan to remove the
registration fee for electric vehicles may persuade states to do the same.

Original equipment manufacturers (OEMs) are expanding their operations in India in order to
maximise revenue from the fast-increasing electric scooter and motorcycle sector. Consider
the following:

➢ Hyundai India announced plans to invest Rs 4,000 crore in research and development to
expand its battery-electric car line in December 2021.

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➢ In December 2021, Tata Motors formed Tata Passenger Electric Mobility Limited (TPEML),
a wholly-owned subsidiary with a starting capital of Rs 700 crore, to drive its EV ambitions.

India, behind China, has the world's second-largest electric bus fleet. The electrification of
buses is also a priority for India. Several state governments have already begun to purchase
electric buses from Chinese and local bus manufacturers. With the growing need to reduce
GHG (greenhouse gas) emissions from automobiles, the government is pushing the usage of
electric vehicles in several states, which is driving up demand for electric buses in India.

In India only Tata Motors India, Morris Garages (MG) India and Hyundai India have launched
their EVs. Mahindra & Mahindra, Toyota Kirloskar Motor and Maruti Suzuki India Limited are
also the major players who will be launching the EVs. Tesla can also be a nice addition in the
market too.
With 100 percent FDI available, new production centres, and a greater push to improve
charging infrastructure, India's electric vehicle industry is gaining traction. Cabinet authorised
a production-linked incentive plan for the automotive sector in September 2021 to encourage
the development of electric and hydrogen fuel cell vehicles. In 2021, India sold over 300,000
electric vehicles.

Existing EV Ecosystem in India and Investment Outlook

Regardless of India's goals, the country's electric vehicle industry is still in its infancy.
However, from a different perspective, India represents the world's largest unexplored
market, particularly in the two-wheeler category. Under the automatic approach, 100 percent
foreign direct investment is authorised in this industry.
The federal government is also putting a premium on sustainable transportation, as seen by
recent changes to the FAME II plan, which aims to make electric two-wheelers more
accessible. As of November 25, 2021, around 1,65,000 electric cars have been sponsored
under phase two of the FAME plan, with a demand incentive of INR 5.64 billion. In addition,
the programme has approved 6,315 electric buses, 2,877 electric vehicle charging stations
worth INR 5 billion in 68 cities across 25 states/union territories, and 1,576 charging stations
for INR 1.08 billion on nine expressways and 16 motorways.

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Emerging EV Market in India

Many top battery manufacturers, such as Amara Raja Batteries, have used these incentives
as a hint to direct future investments toward green technology, particularly lithium-ion
batteries.
Leading businesses including OLA Electric Mobility Pvt, Ather Energy, and Mahindra Electrics
are quickly expanding their market presence in response to the potential that India's EV sector
affords. Furthermore, certain governments, like as Karnataka and Tamil Nadu, are enacting
creative and timely investor-friendly laws in addition to constructing required infrastructure.

The Development of Electric Vehicle & Charging Technology

The rise in electric vehicle registrations led to a 33 percent increase in automotive lithium-ion
battery output in 2019. China continues to be the world's largest producer of batteries,
accounting for more than 70% of total capacity. Europe, on the other hand, is not lagging.
Since Europe's production capacity for batteries was exceeded in the previous year, many
new batteries plant developments were announced in 2020.

The Environmental Impacts of EV

EVs will avoid more than 50 million tonnes of carbon dioxide equivalent of GHC emissions
globally by 2020. In practise, all emissions from electric vehicles (EVs) are created during the
manufacturing process, however this rationale does not apply to internal combustion engine
(ICE) vehicles. In the larger scheme of things, it appears reasonable to conclude that the public
argument regarding the environmental impact of EVs vs. ICE automobiles is shifting in favour
of EVs.

Depending on where the battery is made, producing a lithium-ion battery for an electric
vehicle creates carbon dioxide comparable to driving a gasoline automobile for one or two
years.

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Because electric cars have no exhaust emissions, the carbon emissions from battery
manufacture may be swiftly mitigated once they are in use.

Challenges faced by the EV Industry

➢ Inadequate charging infrastructure – In 2019, India has just 650 charge stations compared
to China's 0.3 million. One of the main reasons why customers are hesitant to buy electric
vehicles is a lack of charging infrastructure.
➢ Customers have a restricted choice of items to pick from because the business is still in its
infancy in India. Increased investment in the sector will eventually make it more
competitive, resulting in increased demand.
➢ Lower mileage – Because the business is still in its infancy, there is a lot of room for R&D.
EVs are currently not cost competitive for the ordinary consumer in India, since internal
combustion engine (ICE) vehicles are more cost effective.
➢ Higher reliance on imports: One of the issues contributing to the expense of EVs in India
is the country's reliance on imports of battery and other components.
➢ Another issue is the cost of charging EVs at private charging stations if they become
ubiquitous. According to Brookings India, even with a decent penetration of EVs, the
increase in electricity consumption is anticipated to be around 100 TWh (tera watt-hours),
or roughly 4% of total power generating capacity, by 2030. As a result, expanding power
generating methods is required to fulfil the rising demand.
➢ The present high price of electric vehicles is a big worry among potential buyers. Electric
automobiles in the same class are more costly than lower-end ICE cars. This is mostly due
to the increased expense of the technology employed in EVs, which accounts for a
significant amount of the price, leaving little room for other amenities often seen in luxury
vehicles. With increasing R&D and market competition, the pricing element will be
rationalised in the future to meet India's price sensitivity, which is a major factor affecting
purchasing decisions. With the new incentives, the price of EVs in the two-wheeler
category is expected to drop. Since the government's interests are now skewed toward
long-term sustainability and environmental protection, it is expected that the price will
also drop in cars and buses too.

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Benefits from EV

➢ Lower operating expenses – Compared to a petrol or diesel car, the operating costs of an
electric vehicle are significantly lower. Instead of utilising fossil fuels like gasoline or diesel,
electric vehicles charge their batteries with electricity. Because electric cars are more
efficient, paired with the lower cost of power, charging an electric vehicle is less expensive
than filling up a gasoline or diesel vehicle for your travel needs.
➢ Low maintenance expenses – Because electric cars have fewer moving components than
internal combustion vehicles, they require less maintenance. Electric automobiles have
less maintenance requirements than typical petrol or diesel vehicles. As a result, the
annual cost of operating an electric car is quite cheap.
➢ Electric vehicles have zero tailpipe emissions, which can help you minimise your carbon
impact. Choosing renewable energy sources for residential electricity can further lessen
the environmental effect of charging your car.
➢ Electric cars are simple to operate and silent. They do not have gears and are thus very
straightforward to use. There are only three buttons to operate: accelerate, brake, and
steer. Simply plug your car into a home or public charger when you need to charge it.
Electric cars are very quiet, which helps to decrease noise pollution caused by regular
automobiles.
➢ Because there is no engine, there are no moving parts, electric vehicles are completely
quiet. There will be no noise if there isn't a motor. You'll have to peep into your instrument
panel to see if the electric motor is on because it runs so quietly. Manufacturers now-a-
days add artificial noises to electric vehicles to make them safe for pedestrians.

Questionnaire and Findings

I distributed a questionnaire to my contacts and conducted a survey on Electric Vehicles. I got

23 responses and all the questions asked, findings, charts, graphs and conclusion are
mentioned in this report.

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➢ My survey indulged 17 Males (73.9%) and 5 Females (26.1%).

➢ 15 people (65.2%) are under 25 years of age. These people are employed and will have
the capacity to invest in an electric vehicle in the coming future.
➢ 8 people (34.8%) are between 25-39 years of age group. These people have the income
and the capacity to invest in an electric vehicle now and also in the coming future.
➢ My Survey did not have any people between the age group of 40-59 and 60 years or above.
Although when interviewed directly they said it would be difficult to adapt to such a
change but when the infrastructure becomes good and reliable, they would like to own
one.

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➢ 5 responses (21.7%) say that they have only 1 vehicle in their household.
➢ 7 responses (30.4%) say that they have 2 vehicles in their household.
➢ 11 responses say that they have more than 3 or more vehicles in their household.

➢ All the 23 people do not own any kind of Electric Car. The two-wheeler EV is becoming
very popular in the Indian market but there are very few electric car options available in
the Indian Market.
➢ The Tata Nexon EV, Tata Tigor EV, Hyundai Kona Electric, MG ZS EV Mercedes-Benz EQC,
Jaguar I-pace, Porche Taycan, Audi Etron GT and BMW iX are the only EV options available
in the Indian car market. These vehicles are very costly and India is a very price sensitive
market.

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➢ There are a lot of hybrid cars available in the market. Toyota and Maruti Suzuki are the
two companies that is giving customers a hybrid electric/petrol car in almost all of their
vehicles. These vehicles give excellent fuel economy when compared to normal petrol
engines because of the Hybrid Electric system.

➢ By this survey question it seems like people do know the basic advantages or benefits of
the Electric Vehicles.
➢ Everyone knows that it is environment friendly. It saves fuel, no sound pollution and has
zero emission.
➢ Some of them know that in the longer run EVs are going to be cost effective than the
Internal combustion engines (ICE).

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➢ Some of them said that it is automatically controlled so they don’t have to work on the
gears to drive the car or a two-wheeler motorcycle. It has ample amount of torque,
relaxing and easy to drive.

➢ If there are advantages there are disadvantages too. And from this question it seems like
people also are aware about the disadvantages and limitations keeping the Indian
conditions and market in sight.
➢ India is lacking in terms of infrastructure. There are not enough charging stations. Vehicles
are yet to provide long range so travelling long distances without charging stations is not
very convenient. And also, if there is no fast charging available then one has to wait for a
very long time to charge up the vehicles.
➢ Getting spare parts can be an issue. People have also questioned about the durability of
EVs in this survey.

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➢ Some have a problem that there is no sound itself in a vehicle. Some also believe that
charging frequently can be a tedious task.
➢ People have also said that it is not affordable. They can get more features in a petrol
vehicle when compared to an EV in that price segment.

➢ The economy/cost to charge gets a 10 from 7 people as it is most important to them.

➢ The environmental benefits are most important to 7 people and hence gets a 10.
➢ 8 people gave a score of 9 to the performance aspect of the EVs.
➢ 6 people gave 4 points and another 6 people gave 7 points to the looks criteria of the EVs.
➢ People seem to be very particular about the number of charging stations. Hence 6 people
gave 9 points and another 6 people gave 10 points to this particular criterion.
➢ How far you could travel before it needs recharging criteria gets 10 from 8 people.
➢ The maintenance cost gets 8 points from 7 people.
➢ People do want the EVs to be less expensive as India is a price sensitive market. 6 people
gave a score of 9 and another 6 people gave a score of 10 to this particular criterion.

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➢ 5 people (21.7%) will definitely buy one
➢ 5 people (21.7%) are likely to buy one
➢ 7 people (30.4%) will buy only if someone manages to convince them that EVs are great.
➢ 4 people (17.4%) are unlikely to buy one. They may buy if the infrastructure somehow
becomes great, there are more options in the market resulting in cheaper price of EVs.
➢ Zero people are very sure that they won’t be considering EVs in the next 2 years.
➢ 2 people (8.7%) don’t know if they would be buying any sort of vehicle or not.

➢ 4 people say that they would consider buying an EV if it gets fully charged in an hour.
➢ 4 people say that they would consider buying an EV if it gets fully charged in 2 hours.
➢ 2 people say that they would consider buying an EV if it gets fully charged in 2-3 hours.

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➢ 6 people expect to drive 500-600 kms on a fully charged electric vehicle.
➢ 2 people expect to drive 400-600 kms on a fully charged electric vehicle
➢ 2 people expect to drive 300-400 kms on a fully charged electric vehicle.
➢ 2 people expect to drive 250-300 kms on a fully charged electric vehicle.
➢ 2 people expect to drive 200 kms on a fully charged electric vehicle.
➢ 2 people expect to drive 100-200 kms on a fully charged electric vehicle.

The Ola scooter is the highest mileage giving electric scooter. It gives a Distance per Charge
of 181km/full charge and Hyundai Kona Electric gives a distance per charge of 452km/full
charge.

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➢ 14 people say that on most days they drive to short distances near to where they live.
➢ 7 people say that they cover medium distances upto 100 kms trips once in a week.
➢ 6 people say that they cover long distances over 100 kms trips less often than every 6
months.

Conclusions

From this questionnaire it seems like people are well aware about the EVs. People have the
basic idea about EVs. They know the benefits and the disadvatages they are going to get if
they consider an Electric Vehicle in the future.

It seemed like the transition from Internal Combustion Engine vehicles to Electric Vehicles will
be very tough because to adapt to something that is fairly new from a thing that you have
seen and driven your whole life is difficult. But from this short survey it seems like people are
eager to consider Electric Vehicles but they are waiting for the right time, the time when the
infrastructure for Electric Vehicles in India becomes excellent, the time when the market will
be flooded with diferent options to chose from, the time when the vehicles will be affordable
and the after sales for electric vehicles will be excellent.

The conclusion from this survey and report is India is doing great each year when it comes to
Electric Vehicles. Government and Private sectors are investing properly in devoloping EVs.
The sales are increasing each and every year. People are considering electric scooters and the
sales are up. In the coming years this could be said for electric cars too.

When it comes to the general public they have set their priorities right and are waiting for the
right time to grab hold of Electric Vehicles.

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References

1. https://www.business-standard.com/about/what-is-electric-vehicle

2. https://www.virta.global/global-electric-vehicle-market

3. https://www.iea.org/reports/global-ev-outlook-2021/trends-and-developments-in-
electric-vehicle-markets

4. https://www.india-briefing.com/news/electric-vehicle-industry-in-india-why-foreign-
investors-should-pay-attention-21872.html/

5. https://e-amrit.niti.gov.in/benefits-of-electric-vehicles

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