Is India's Plug-In Market Preparing to Take Off?

India’s growing light duty vehicle (LDV) market has largely missed the first generation of plug-in EVs (PEVs). As with plug-less hybrids, a major hurdle has been domestic automaker protections. These have made it difficult for the leading hybrid and PEV makers to supply offerings. Any real growth for PEV sales has depended on either a domestic automaker or significant investment in Indian manufacturing capacity from a foreign PEV maker. This has historically been difficult to justify given the attractive economics of diesel and a dearth of charging infrastructure. However, prompted largely by increased transportation policy focus, shifting market conditions are beginning to see promising developments from PEV market players.

Indian LDV Market Conditions

In 2018, the Indian LDV market grew over 8% to top 4 million. In volume, this now makes it larger than Germany. Considering its size, it lacks diversity—the major suppliers: Maruti Suzuki, Hyundai, Tata, and Mahindra account for over 80% of sales. Hybrids have continually failed to take off, with sales at just over 300 in 2018. PEV sales are similarly low, but deployment has only just begun with Mahindra’s e2o netting over 400 sales in its first year. Another offering from Mahindra, the eVerito is on the way, and so are other offerings from domestic automakers Maruti and Tata. Additionally, the global premium segment subsidiary of Tata, Jaguar Land Rover, recently saw its best year in India and is also planning to bring its first global PEV, the I-PACE, to the country in 2020.

What About Gas?

The growing availability of PEV deployments is prompted by the national government’s subsidy program known as FAME, and to a lesser extent an upcoming leap in vehicle emissions standards. The country’s current standard is operating around 5-10 years behind the European system. Updated regulations will likely see India catch up in 2020. The impact of this leap is primarily on diesel vehicles, which had near 60% market share just 5 years ago. Now diesel is at less than 40% and likely to fall fast as the LDV market leader, Maruti Suzuki, has pledged to abandon the fuel. Though gasoline will likely absorb most sales in the near-term, government PEV purchase contracts and industry partnerships, like that between Uber and Mahindra, will ensure promising PEVs prospects in the long-term.

Future of the Market

Buoying the Indian PEV promise is increased attention from major EV charging industry players ABB and Fortum. The former is manufacturing fast chargers in India, and the latter is expanding its small Indian network of 30 charging points to over 700 charging points by 2020. Not without innovation, a battery-swap network is also emerging in India under the moniker Sun Mobility. At this stage, the company’s offering is designed for electric rickshaws and buses—but may also prove a critical component for light duty mobility fleets. In 2017, India announced the ambitious intention that all vehicles sold be electrically powered by 2030 if vehicle costs have fallen far enough to make it economically plausible. The announcement seemed far-fetched then. It seems less so now.