EV Sales in India to Cross 9 Million Units by 2027: IVCA-EY-Induslaw Report

The report also says that $1.7 billion was invested in the EV industry in 2021 by PE/VC investors and as reached $666 million in 2022 so far

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According to a report on "Electrifying Indian Mobility" by The Indian Private Equity and Venture Capital Association (IVCA), EY and IndusLaw, electric vehicle (EV) sales in India will cross 9 million units by 2027. The report also highlights that the EV industry is likely to create more than 10 million direct jobs and 50 million indirect jobs by 2030.

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The government has also been positive about EV adoption. Recently, NITI Aayog and Technology Information, Forecasting and Assessment Council (TIFAC) also released a report which forecasts 100 per cent penetration of electric two-wheelers in the Indian market by FY2026-27. "India is at a crossroads and a shift to electric mobility, particularly, in the two-wheelers segment, may happen faster than anticipated. If there is sufficient installed capacity of electric two-wheelers and charging infrastructure, then the sale may even reach about 250 lakh units," said the public policy think tank's report.

Stakeholders in sync

The government, startups and the investor community have been coming together to work towards more sustainable solutions. That is why, despite the unfortunate fire accidents in the recent past, EV adoption seems to gathering momentum.

According to the IVCA-EY-Induslaw report, $1.7 billion was invested in the EV industry in 2021 by the PE/VC investors and $666 million in 2022 so far. It also says that with the growth in ESG and climate-specific funds, the investment momentum is expected to continue. In fact, IVCA has also observed many new and first time investors joining the bandwagon.

"While the Indian startup ecosystem is focused on technological adaptation and environment, social aspects have also topped their themes for innovation. This is likely to give further boost and momentum to the growth in ESG and Climate specific funds. Fast adoption of EVs across all the segments is truly the path to the green frontier," said Rajat Tandon, president, IVCA.

FAME or Faster Adoption and Manufacturing of Electric vehicles was introduced by the government of India in April 2019 to encourage the switch to electric mobility. The idea is to cut down on fuel usage and reduce carbon emissions as per the COP 21 agreement. An outlay of INR 10,000 crore for a period of three years was approved under FAME 2.

"While government support for the EV ecosystem in India has been steadily rising over the past ten years, private investors are now filling that void by providing relevant entrepreneurs with funding and mentoring. Startups and investors alike will have plenty of chances in the upcoming years to disrupt the mobility market with cutting-edge green technology," said Ankur Mittal, co-founder, Inflection Point Ventures, in an earlier interview.

India is also moving towards adopting battery swapping to promote faster adoption of EVs. During Budget 2022-2023, the government announced plans to introduce a Battery Swapping Policy and interoperability standards. The idea was to build and improve the efficiency of the battery swapping ecosystem and thereby drive EV adoption.

In April this year, NITI Aayog released a draft battery swapping policy for the EV industry and according to some latest news reports, the government is likely to notify EV Battery Swapping Policy in the next 15 to 30 days. Battery swapping offers three key advantages relative to charging: it is time, space, and cost-efficient, provided each swappable battery is actively used, the government think tank said in the draft.

"Battery swapping is still nascent in India but gaining ground, especially for commercial and fleet operations. There are currently a limited number of battery swapping service providers that have been engaging with original equipment manufacturers (OEMs), individual/commercial users, and other relevant stakeholders, to develop ecosystems of swapping services with compatible components (batteries, vehicles, chargers, etc.) within each ecosystem," said the draft.