India Is One of the World's Fastest-Growing EV Markets.

Global EV market Dynamic

Car brands from all over the world are trying to enter the EV market as it continues to grow and trending to overtake traditional markets.

Continuous Electric car growth in Major Markets

According to an IEA Report released in April 2024, global electric car markets continued to soar, from comprising 5% of all new car sales in 2020, almost doubling to 9% in 2021, and reaching 14% in 2022, for a total of over 10 million sales worldwide. However, most of the sales took place in major markets like China, Europe, and America, with China accounting for about 60% of the overall sales. Electric vehicles, being a part of the broader sustainability movement, are heavily reliant on a well-developed infrastructure system that is essential for both the production and maintenance of EVs.

India's EV market approach

India has taken a slightly unconventional approach to growing its electric vehicle market, with about 90% of the EV sales being 2- or 3-wheeled vehicles. Under a $1.5 billion incentive plan that heavily subsidizes purchases of EVs, particularly favoring two- and three-wheelers, many consumers opted for EVs due to their lower operating costs compared to traditional fossil-fuel-powered cars.

Two wheels versus Four wheels

India is the largest two- and three-wheeler market in the world. An article by MIT Technology Review explained why two wheels are better than four in India’s electric vehicle push. The Indian market for vehicles is quite sensitive to the price, and the high price for electric cars with costly premium batteries is not a good fit for the market. As a result, two- and three-wheelers became the better solution with a more flexible price that is more reasonable to build up the EV market in India.

Will Electric Vehicles achieve sustainability for India

Electric vehicles have been promoted as the prime environmentally friendly solution to diminish the adverse environmental effects associated with traditional modes of travel.

Source of Electricity: the usage of coal

However, there are critical challenges lurking behind this impressive growth. An article by AP underscores the energy source issue, stating that "Nationwide fossil fuels generate more than 70% of India’s electricity and have been doing so for decades, with coal being the dominant contributor." Renewable energy currently accounts for only about 10% of India's electricity generation. Without a substantial shift toward sustainable energy solutions, one of the primary motivations for adopting electric vehicles—reducing emissions—might be compromised.

Basis of EV production: the impact of mineral mining

In addition to concerns about electricity sources, EV production hinges on the extraction of minerals like lithium, which requires strict regulation to ensure both safety and sustainability. These challenges highlight some of the major hurdles India must overcome to promote EVs successfully and further its journey toward becoming a more sustainable country. Balancing the rapid growth of the EV market with sustainable energy sources and responsible mineral mining practices will be key in achieving long-term sustainability goals.