Electric vehicle market in India expected to hit 63 lakh units per annum mark by 2027: IESA

The electric vehicle (EV) market in India is expected to hit over 63 lakh unit mark per annum by 2027, according to a report by India Energy Storage Alliance (IESA).

As per the findings of the report, which covers the present scenario and forecast of the electric vehicle, EV batteries, and the public charging infrastructure market in the country, demand for the batteries is also going to rise substantially over the same period.

"In the base case scenario, the EV market is expected to grow at CAGR of 44 percent between 2020-2027, and is expected to hit 6.34 million unit annual sales by 2027," the IESA report said.

Similarly, the annual battery demand is forecasted to grow at 32 percent to hit 50GWh by 2027, of this 40-plus GWh will be on lithium-ion batteries, it added.

"The estimated battery market potential is $580 million in 2019, and is forecasted to grow to $14.9 billion by 2027," it noted.

The EV sales in India stood at 3.8 lakh units in 2019-20, and the EV battery market stood at 5.4GWh during the year. The electric two-wheelers were the highest selling in the entire segment last fiscal.

As per the report, low and medium-speed electric two-wheelers (up to 40 kmph) with conventional lead-acid batteries were dominating the market.

"With more companies getting FAME-II certification in 2020, sale of high-speed electric two-wheelers is expected to increase rapidly," it added.

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In terms of battery technology in the electric two-wheeler segment, lead-acid technology will be completely out of the market in the next five years, it said.

Elaborating on the electric bus market the report noted that the demand in the vertical is expected to be driven with subsidy support from the Central government due to high upfront cost.

Going forward, expansion is likely to be based on viability and access to financing, it added.

Besides, the e-rickshaw market is poised for growth in the upcoming years as many new markets such as Raipur, Indore, and Bhopal have opened last year.

Moreover, the South and Northeast markets are also expected to open in the upcoming years, the report said.

It noted that the high-speed electric three-wheeler market is presently at a very nascent stage, and has opened mainly at the B2B or in the cargo segment due to the requirement of performance vehicles.

Low-cost financing is a key constraint hindering the growth of this segment, the report said.

"Going forward, the industry believes that the market will grow very rapidly in the upcoming years as many state governments are planning to convert the existing fleet of autos into electric under their EV policies," it added.