As the global new energy vehicle industry booms, India, with its huge population and fast-growing economy, is working to make its mark. In recent years India's EV market has grown markedly, with progress in market size, policy support, investment by local companies and international cooperation. Like any emerging market, however, it faces many challenges.
The market is growing quickly. According to the Federation of Automobile Dealers Associations, India sold about 90,000 electric cars in FY2023-24, nearly double the previous year. Counterpoint Research says India's EV sales almost doubled in 2023 and are expected to grow 66% in 2024 to 4% of passenger car sales, with EVs projected to make up nearly a third of the market by 2030. S&P Global Mobility forecasts a 7.5% EV share in 2025, with 117% year-on-year growth. Although EVs still account for less than 3% of passenger vehicle sales, the trend shows growing interest.
The Indian government has played a key role with comprehensive, targeted policies. On production, the 2024 Scheme to Promote Manufacturing of Electric Passenger Cars requires investment of at least INR 41.5 billion and local value addition of 25% within three years, rising to 50% within five, to localize the EV supply chain. On subsidies, the second phase of FAME India, launched in 2019 with a budget of INR 115 billion, supports electric two-, three- and four-wheelers, e-buses and public charging stations. On infrastructure, the PM E-DRIVE scheme announced in 2024 with INR 109 billion supports electric two- and three-wheelers, trucks, buses and charging, and upgrades vehicle testing agencies; the PM e-Bus Sewa Payment Security Mechanism launched the same year with INR 34.33 billion supports deployment of more than 38,000 e-buses and secures operators' cash flow. The Production Linked Incentive scheme for Advanced Chemistry Cell batteries, launched in 2021 with INR 181 billion, targets 50 GWh of battery capacity. Together these policies support production, consumption, infrastructure and core battery manufacturing to cut emissions, reduce oil dependence and strengthen manufacturing.
Local companies play an important role, with Tata Motors standing out. Tata leads the electric passenger car market with a 62.01% share in 2024, and its Tiago.ev, Tigor.ev, Punch.ev, Nexon.ev and Curvv.ev are popular. Maruti Suzuki is building plants to launch EVs. India's strong software outsourcing industry also gives it an advantage in intelligent driving software: since 2014 or earlier, Bosch, Continental and other major suppliers have placed driver-assistance software development in India, and local firms such as Tata Elxsi, KPIT and Wipro take on outsourced work.
International cooperation and foreign investment are bringing new momentum. Vietnam's VinFast has broken ground on an integrated EV plant in Tamil Nadu, and Hyundai has announced INR 200 billion of investment in Tamil Nadu over ten years. Tesla has opened its first Indian showroom in Mumbai. Chinese companies are entering through partnerships with Indian firms: BYD planned a USD 1 billion vehicle plant with infrastructure group Megha Engineering, and Gotion has partnered with Tata.
India still faces many challenges. Battery manufacturing is a weak point: India relies heavily on imported battery materials, lacks large reserves of lithium, cobalt and nickel and the experience to mine them, so battery costs are high and supply cannot quickly meet the industry's needs. Power battery prices in India are about 30% higher than in China, about USD 120/kWh for NCM cells versus about USD 90 in China. India is searching for minerals worldwide, state-owned KABIL has mining rights to five blocks in Argentina and is seeking stakes in Australian lithium projects, but dependence on imported batteries will not change soon.
Infrastructure is another problem. By the end of 2024 India had 25,000 charging points, fewer of them suitable for cars. The Hindu reported 12,146 car charging points as of March 2024; with an estimated 230,000 battery electric cars on the road, that is about 20 cars per charger, far from enough for future growth and a deterrent to buyers. Grid instability in some regions also affects charging and EV use.
Market acceptance is a further challenge. Indian consumers are price-sensitive and combustion cars are usually cheaper, putting expensive EVs at a disadvantage, and limited public awareness means many potential buyers do not understand the benefits or how to use EVs. Despite rapid growth, becoming the world's largest EV producer will require major efforts in technology, infrastructure and market development.
As a potential consumer giant, India's EV market has great potential. INFOR is actively expanding in India and has established cooperation with several organizations. We will also exhibit at the 2025 India International Battery & Energy Storage Expo on 30 October, showing advanced bead mill technology to the Indian market. Interested friends are welcome to join us.