India could be the next major market for electric vehicles, in large part thanks to commercial EV adoption. In fact, the subcontinent’s demand for EVs for commercial use alone is expected to increase a stunning 15-fold in the next six months alone.
The sudden spike in uptake is being fuelled by the confluence of a number of factors including rising fuel prices, lower EV prices, government support and incentives, and the electrification of fleets for ecommerce delivery.
The Indian economy has seen record fuel prices this year, even as oil prices dipped. The rapid increase in fuel costs is almost entirely due to hikes in both state and federal taxes on both gasoline and diesel. This has hit the transportation and shipping sector especially hard.
It makes good financial sense, then, that Indian companies are seeking to wean themselves off of traditional fuels. Over the course of 2020, even as the world battled the first wave of the novel coronavirus pandemic, India increased its electric bus registrations by 34%, according to the International Energy Agency’s 2021 global EV outlook report.
At the same time, both state and central government entities are ramping up incentives to make EVs more accessible and affordable. The government is targeting EV sector growth as a means to lower dependence on foreign crude imports and to improve the country’s infamously poor air quality.
At present, the Indian EV sector is small, and the commercial EV sector is negligible. But all of that is set to change. Indeed, India counts itself among a handful of countries that have signed on for the global EV30@30 campaign, in which nations aim to make 3 out of every 20 new car sales an electric vehicle by 2030.
Just this year India’s cabinet approved an incentive scheme to the tune of approximately $ 3.5 billion over a five-year period, which will go toward the production of EVs (both battery and fuel cell vehicles) as well as domestic drone manufacturing. The Indian government is hoping that this will help India become competitive in the global automobile sector and attract new investment.