India’s EV Industry Fails to Kickstart and Stalls In 2020

The Indian EV industry took a hard knock in 2020 as the pandemic affected the sector just like other industrial segments. The two-wheeler and three-wheeler category which accounts for a majority of the EV sales were the worst hit and led to an overall 20% decline in the EV market in India with sales of just around 236,000 vehicles. The Indian automobile market especially the three-wheelers market has seen sharp degrowth in 2020 as people preferred to avoid public transport due to the COVID pandemic. The shutdowns in the earlier part of the year also sharply reduced three-wheeler public transport rides as many of the drivers went back to their hometowns. The only bright spot was an almost 50% year-on-year increase in the sales of electric four-wheelers though in a very low base of just 3000 vehicles which does not comprise even 1% of the overall four-wheeler market in India.

The industry is expecting 2021 to be better but it could face additional difficulties as the second wave is expected to hurt the disposable income of the consumers as well as sentiment to make big purchases. Though 2020 is a setback, the secular trend should not be affected given the better economics of the EV market as compared to the ICE market as well as the renewed focus on climate change and global warming issues. Many large players are making huge investments in creating both the demand and supply infrastructure. Ola Electric has not only committed to making a massive new electric two-wheeler supply chain but also a gargantuan EV charging network across the country to power its vehicles, given that the county does not have a charging infrastructure. All major auto players are also firming up their plans with some of them already introducing products for the EV market in India.