India: EV Market Poised for Strong Growth 

The Indian automotive market is poised for rapid electric vehicles (EV) growth, thanks to the convergence of factors including government incentives, improving cost competitiveness and original equipment manufacturer (OEM) investment in the industry. 

According to a recent report by Bain & Company, India’s EV value chain revenue is forecast to reach between US$76 billion and US$100 billion by 2030. Up to half (40%–50%) of revenue will come from auto OEMs. However, its composition will be significantly altered as new business opportunities emerge such as battery (13%), charging (8%), mobility (6%).  

The next big thing is unified platforms as many EV ecosystem players look for forwards or backwards integration to create a broader e-mobility ecosystem. 

Indian EV sector has already seen US$3.7 billion private equity and venture capital investments over the past three years. 

Findings from the report indicated that 35%–40% of all vehicles sold in India by 2030 will be EVs, up from 2% in 2022. This equates to approximately 14 million to 16 million new EVs sold each year. 

Emerging EV business models

The disruption of the automotive value chain in India will create several opportunities for investors and new participants. The report outlined six emerging business models: 

Battery cell manufacturing, packaging – India’s EV industry today largely relies on imported battery packs for their vehicles. However, there is a push to localize large parts of the battery value chain and increase domestic value add. This may open opportunities for new players to participate. 

EV components – Substantial demand for localized EV-specific components has created opportunities for component suppliers. Players choosing to make an EV component play will have opportunities to extend global markets and non-automotive consumer segments. 

Software and telematics – Asia-Pacific already has the fastest-growing automotive telematics market in the world, with a CAGR of approximately 31%. As the third-largest provider after China and Japan, India’s telematics market was approximately $4.5 billion in 2021 and is poised to grow at a CAGR of 30% over the next five years. There is significant room to grow, with multiple emerging applications across predictive and preventive maintenance, driver monitoring and other vehicle-tracking use cases. 

New-age OEMs – The emergence of new, EV-first OEMs has been playing out within the 2W (two-wheel) and 3W (three-wheel) space in India where multiple new players, such as Ampere, Ather, Okinawa and Ola have been early movers and are looking to challenge ICE incumbents. These new players have attracted and developed talent and capabilities in EV-critical areas that traditional OEMs are relatively weaker in, such as software and telematics. 

EV charging infrastructure – Still at its infancy, fragmentation and incentives for participation in India’s EV charging infrastructure market have created attractive opportunities for both disruptors and conglomerates. It is likely that a sustainable model will develop, allowing a portion of value accrued through the significant operating cost savings for consumers to go to charging infrastructure players over time to build a sustainable and scalable business. 

Mobility-as-a-service (MaaS) – The benefits of EVs combined with customers’ emerging preference for green and sustainable solutions will lead to the rise of electric mobility offerings in the Indian market. This will encompass B2C electric ride-hailing offerings, rental mobility offerings and business to B2B MaaS platforms seeking to provide an integrated solution for fleet operators to electrify their fleets.  

In another development, French automaker Renault is reportedly considering building a mass-market EV in India. This underscores the shifting perception of the auto market in India, which posted the fastest growth of any major market in 2022.  

EVs are forecast to be less than 1% of total car sales in 2022. However, the Indian government has set an ambitious target of 30% by 2030. The government has also succeeded in attracting suppliers for international automakers with a range of subsidies. 

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