DELHI
RANGE ANXIETY IS a real thing. Electric vehicle drivers experience it even when they have enough charge to comfortably reach their destination.
Automakers, however, seem to have no such anxiety. They are pretty sure that they will culminate the journey they had embarked on a while ago—a shift from internal combustion engine vehicles to electric vehicles. “The question has evolved from ‘why electric?’ to ‘which electric?’, marking a fundamental transformation,” said Santosh Iyer, managing director and CEO of Mercedes-Benz India.
With very few exceptions (a Tata Sierra here and a Skoda Kodiaq there), all the major passenger vehicle launches at the recent Bharat Mobility Global Expo were electric. And two of them—the Maruti Suzuki eVitara and the Hyundai Creta Electric (it was revealed a few days earlier but the prices were announced at the Expo)—could be the change agents in the Indian automobile industry’s shift to an electric future.
The zeal is almost ironic, though, as EVs are few and far between on the Indian roads. The total sales of electric passenger vehicles in India in 2024 were a tad below one lakh units. That is just a fraction (about 2.3 per cent) of the 43 lakh passenger vehicles sold in the year.
Electric two-wheelers are marginally better off. Of the 1.8 crore two-wheelers sold in the year, about 11.8 lakh were electric (6.5 per cent). Electric two-wheeler sales are growing faster as well. Their sales jumped 33 per cent in 2024 from the previous year, while electric car sales grew just about 20 per cent.
The other large car markets—China and the US—have been doing much better. China sold 1.1 crore electric cars in 2024, nearly half of all cars sold. The US sold 19 lakh hybrid vehicles and 13 lakh all-electric vehicles in the year—put together about 20 per cent of the total sales in the year.
So, why are they struggling in India?
The ecosystem for EVs is a work in progress in India. In fact, it is still in the early stages. There are fewer than 20,000 public charging stations in the country, and most of them are slow chargers. On the other hand, China has some 35 lakh public chargers, which is the largest public charging infrastructure in the world. The US has around two lakh publicly available charging points and some thousand chargers are being added every week.
The charging infrastructure is a big factor that influences people’s buying decisions. “A critical barrier to the adoption of EVs is the lack of accessible charging,” said Partho Banerjee, senior executive officer (marketing and sales) at Maruti Suzuki India. That is exactly why India’s largest carmaker announced that it would set up around 25,000 EV charging stations even before launching its first electric vehicle.
Smooth change: Gopalakrishnan C.S., chief manufacturing officer, Hyundai, with the Creta electric | Sanjay Ahlawat
Maruti Suzuki gave a glimpse of its big plans at the launch of the eVitara. “We will leverage our vast network to provide fast-charging support to our customers in the top 100 cities in the first phase,” said Hisashi Takeuchi, managing director and CEO of the company, at the launch.
Tata Motors, India’s largest EV maker, aims to grow the charging network to one lakh points by 2030 and has been collaborating with charging ecosystem partners such as ChargeZone, Statiq, Glida, Hindustan Petroleum, Bharat Petroleum and Shell. Hyundai plans to set up 600 public EV fast-charging stations across India over the next seven years.
Carmakers are taking the initiative to invest in charging infrastructure with the intention of creating a virtuous cycle—more charging points will encourage people to buy EVs, and more EVs will encourage charging service providers to build more charging points.
They are also trying to get their products and pricing right. One right product can make a lot of difference, as the Windsor EV did for the JSW MG Motor India. The company sold around 11,000 EVs in the first nine months of 2024 (around 1,200 a month, on average), and it sold around 9,600 in the last three months (3,200 a month, on average). The Windsor, which was launched in September, made the difference. It was as if customers were waiting for the right product.
The Creta Electric could be that product for Hyundai. The popular SUV’s ICE version has regularly been a sales chart-topper. The electric model is equally well-packaged and, more importantly, well-priced. At a starting price of Rs18 lakh, it is not much more expensive than the ICE model. And it could also be the bedrock of the company’s future electric products. “Three more models will come in and that will drive up the volumes,” said Tarun Garg, chief operating officer of Hyundai Motor India.
Hyundai plans a mix of base-up (designed and made as EVs) and derived (from an existing platform, like the Creta) models. “Our production lines are capable of catering to any platform,” said Gopalakrishnan C.S., chief manufacturing officer of Hyundai. And the company is likely to go ahead with the aggressive pricing strategy aided by localisation. “We have an agreement with a local supplier for batteries and the factory in Tamil Nadu will meet the requirements,” said Gopalakrishnan.
The budget announcement to fully exempt the basic customs duty on the 35 types of capital goods for producing lithium-ion batteries will further bring down EV prices. Earlier, import of these materials attracted a basic customs duty of 2.5 per cent to 10 per cent.
Pricing will play a key role in accelerating the adoption of EVs. Also, EVs have narrowed the price gap with ICE vehicles, making themselves a stronger case. The BMW X1 electric launched at the Auto Expo was priced almost the same as the X1 with a petrol engine. Again, it was made possible by localisation—the X1 is BMW’s first electric vehicle made in India.
Importantly, carmakers are no longer dependent on subsidies to keep EV prices competitive. “With the declining costs of batteries and the benefits of EV ownership, the sector can sustain itself without further subsidies,” said Union Minister for Commerce and Industry Piyush Goyal.
Currently, the government offers subsidies for various electric vehicles under the E-Drive initiative, which mostly focuses on demand incentives for two-wheelers, three-wheelers and trucks. “India’s electric mobility segment is ready and set to fly,” said Goyal “There is no need for new incentives as the existing ones are sufficient to kick-start the ecosystem.”
For the first time, EV launches are set to surpass petrol and diesel cars this year. Eighteen of 28 vehicle launches planned for the year are electric. That is quite a leap—in the past two years, only 10 EVs hit the market. Analysts expect electric passenger vehicle sales to cross 2,00,000 units this year. That is twice as many as last year and about 4 per cent of the total passenger vehicle sales.
That kind of growth, however, comes with many concerns, like India’s power grid’s capability to cater to the growing demand.
As of March 2024, the installed generation capacity of the national electric grid was 441.97 GW. The average annual growth of India’s electricity production is around 7 per cent. It will soon be overtaken by the EV charging requirements. India has to ramp up its power production to meet this demand, and a lot needs to be done to distribute power as well.
Is it the end of the road for the internal combustion engine vehicle? Gopalakrishnan said Hyundai will keep making ICE cars as long as there is demand. Most carmakers in India still have their portfolio heavily tilted towards ICE vehicles. “We need many more cars across segments for electrification to go further,” said Iyer. But one thing is clear—the electric revolution is already on the road, and there’s no turning back.