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Electric Scooters in India: What’s the Future Look Like?

( 06/26/2019 ) Written by: Sujeesh Nair

There’s been rapid growth of electric vehicles (EVs) in the past few years from nearly 740,000 in 2016 to upwards of 5.6 million today, so it’s no question that automakers are making advancements towards mass market adoption. It’s estimated by 2030, ownership of electric vehicles will skyrocket to about 125 million. China is leading the globe for the most EVs on the road at 2.6 million at the end of 2018.

Automakers around the world are eager to get in on this drastically growing market. Most OEM’s have launched or are planning on launching electric vehicle platforms to get their piece of the pie. With all this, India is a country that is starting to make progress towards electrification.

The government of India has set a target of EVs making up 30% of new car sales by 2030. While this is ambitious, this shows the intent and direction the country wants to move. This goal is driven by two main factors – the reduction and dependence on fossil fuels and cleaning up hazardous levels of air pollution in congested cities.

India’s proposal to end sales of ICE vehicles presents unique challenges. Electric vehicles are still fairly expensive, considering the per capita income in India is $1,670 per year (112th out of 164 countries). The other challenge is charging infrastructure. The government has issued guidelines to set up charging stations for EVs across the country, outlining ways to build such fueling points on roadsides every 25 km. The Ministry of Housing and Urban Affairs has directed residential and commercial buildings to allot 20% of their parking space for EV charging stations.

A realistic next step is to electrify smaller modes of transportation, including 2 and 3 wheelers. Currently, there are more than 20 million two wheelers alone on the roads that could become electric. Recently a NITI Aayog panel proposed full electrification of all two-wheelers below 150cc by 2025. However, challenges remain. The biggest challenge is the lack of local battery manufacturing. Unless a large Asian battery manufacturer can start manufacturing in India, OEMs will find it difficult to control costs due to import duties and lack of subsidies.

Even with an ambiguous climate for growth, there is no doubt that there is a large market potential. Given the right policies and government support, India could be a market that gains steam in the next 5 years. We are driving innovative solutions for electric transportation around the world. To see more of our solutions for electrification, visit our webpage.

Sujeesh Nair

Sr. Market Analyst at LORD Corporation and works with the India sales & marketing function to explore new business opportunities.

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