Electric Vehicles Market Likely To Grow at 36% CAGR in India

Last Updated on Aug 29, 2022 by Aradhana Gotur

Globally, countries have set high targets to shift to electric vehicles. India is in the early days of shifting focus to electric cars to reduce emissions. In Q3 FY 2022, sales reached a high of 5,592 units. The growth in the EV market is predicted to be over 30% CAGR until 2026. We take a look at the Indian and global state of play in the automotive sector.

Table of Contents

India’s EV story

In 2021, 3,29,190 electric vehicles were sold in India, indicating a 168% y-o-y growth over last year’s sales of 1,22,607 units.
Market share leader Maruti Suzuki plans to launch its first EV in 2025 as Internal Combustion Engine (ICE) cars remain price competitive in the interim period for cost-conscious consumers.
A report by India Energy Storage Alliance estimated that the EV market in India is likely to increase at a CAGR of 36% until 2026. Additionally, the EV battery market is forecasted to grow at a 30% CAGR during the same period.

Ford’s EV story

Ford is making a massive shift in strategy. It is getting ready to eliminate up to 8,000 jobs in the coming weeks to help fund its push into the Electric Vehicles (EV) segment.
Media reports say the job cuts will come largely in the newly created Ford Blue unit that produces gasoline-powered vehicles, as well as other salaried operations throughout the company. The plan is said to be in a fluid state still, so details may change.
The news comes on the heels of Michigan giving the automaker a $100 mn tax-funded incentive package in June as part of a plan to create new jobs in the state.
In March, Ford CEO Jim Farley boosted Ford’s spending on EVs to $50 bn through 2026, up from $30 bn. He set a plan to build 2 mn EVs a year by 2026. Last year, Ford sold 27,140 EVs.
In India, Ford plans to curtail manufacturing operations, with the option to retain the engine plant in Sanand to service its products in the country for the next 5 yrs.

Government-led push globally

The European Union (EU) has proposed a 55% reduction in carbon dioxide emissions from new vehicles by 2030 and a 100% reduction by 2035.
In China, Hainan Island in the South China Sea says it will become China’s first region to ban sales of gasoline and diesel-powered cars to curb climate-changing carbon emissions. In its Carbon Peak Implementation Plan, the Hainan provincial government stated that the sales of fossil fuel-powered cars will be banned by 2030. It also stated that electric vehicles will be promoted with tax breaks and by expanding a charging network.
California requires all new passenger vehicles to be zero-emission by 2035. They require automakers to have 35% of new cars and trucks sold in 2026 to be electric or emission-free models to be allowed to sell in the state.
80% of new car sales in Norway are electric as the country uses financial incentives and taxes to influence car buyers.

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