The electric vehicles market in India is currently small but expected to grow substantially over the next decade. Current market share is less than 0.1% but demand is estimated to increase 50 times by 2020 to 5 million units according to industry studies. The market is dominated by electric two-wheelers and led by Mahindra Reva in passenger electric cars. Growth will depend on continued government support through incentives coupled with advances in battery technology and industry investments. However, high prices, lack of charging infrastructure, and customer acceptance remain key challenges.

1. Electric Vehicles Market in India
Market Scenario and Opportunities
Electric Car Market In India

2. Executive Summary
 The Indian Electric Vehicles market is currently in a nascent stage, however there is optimism about its future
growth
 According to a study conducted by Booz Allen and Society of Indian Automobiles Manufacturers (SIAM),
demand for electric and hybrid vehicles is estimated to increase 50 times from 2010 to reach 5 million units by
2020
 The electric vehicles market is dominated by two-wheelers and in the passenger cars segment, there is
practically only one player in the market – Mahindra Reva
 In India, electric vehicles especially cars are primarily targeted at upper middle/rich class and it is expected to
continue in the future
 The Indian Government has introduced incentives and schemes to promote electric vehicles, however these
schemes seems to have failed
 Continuing Government support, advancements in technology and investments by industry would be the key
drivers for growth of the electric vehicles market in India
 Changing customer perception, pricing, improving fuel efficiency and competing with alternative fuels like
CNG, LPG and Hybrid vehicles are the key challenges facing the electric vehicles market
 Many traditional manufacturers are showing keen interest in electric vehicles market and are
introducing/planning new models in the market
 Affordable pricing, introducing new variants, technology advancements backed by smart marketing could be
key strategies for growth for manufacturers in the electric vehicles market.
Electric Car Market In India
2

3. Table of Content
 Market Overview
 Market Size and segments
 Target Customers
 Government Schemes and Incentives
 Key Players in the Electric Vehicles Market
 Drivers and Challenges for Growth
 Porters’ Five Forces Analysis
 Growth Strategy
Electric Car Market In India
3

4. The Electric Vehicles market in India is in a nascent stage; sales
accounted for less than 0.1% of overall automobiles market in 2010
• According to study conducted by SIAM and Booz Allen, the electric Electric and Hybrid Vehicles Market Size
vehicles market is estimated to grow 50 times from 1 Lac units sold in (in millions)
5.0
2009-10 to 5 million units by 2020
• With the growing interest in a cleaner lifestyle and a booming medium
to high income population, electric vehicles manufacturers can see
substantial sales figures if the market is properly monetized.
50x
• The growth of electric vehicles in India is driven by factors like rising
fuel costs and the ability to increase the availability of power through
the grid by multiple sources like coal, renewable sources, gas and 0.1
nuclear power
2009 - 10 2020E
Market Segments:
• The Indian electric vehicles market comprises of electric cars, three wheelers and two wheelers
• The two wheelers dominate with an overall market share of approx. 97% in the electric vehicles sector
− Considering that the motorcycles account for more than 80% of the two-wheelers in India, it can be expected that
Indian manufacturers could launch electric motorcycles.
− However, electric two-wheelers have seen a recent reversal of fortunes, with sales dipping from a high of more
than 26,000 vehicles in 2008-09 to around 3,000 in 2009-10, attributed by industry sources to the rush of cheap,
but low-quality vehicles which flooded the market in 2008-09 but then were subsequently rejected by consumers.
• In passenger cars segment, there is only one established domestic manufacturer, Reva
Source: EAI, SIAM, Deloitte, Livemint.com, Finpro Electric Car Market In India
4

5. The main target customers for buying electric vehicles in India are and
would continue to be rich or upper middle class customers
• According to the study conducted by Deloitte across US, Europe, China, Japan and India:
– Target consumers for electric vehicles in both “potential first movers” and “might be willing to consider “category are from
urban locations.
– An interesting difference between India and the other markets compared is the relative affluence of the group that considers
electric vehicles.
– This would imply that while electric vehicles are considered within the reach of the middle-class customer in most other
markets, the manufacturers selling electric vehicles n India would have to target the upper-middle or rich customers.
India: Potential first movers profile India: Might be willing to consider profile
Country Location Income Country Location Income
India (42%) Urban > INR 9,00,000 India (36%) Urban > INR 9,00,000
China (36%) Urban >RMB 400,000 China (22%) Urban/Sub Urban >RMB 400,000
US (57%) Urban/Sub Urban <USD 50,000 US (56%) Urban/Sub Urban <USD 50,000
Europe ( 42%) Urban <EUR 20,000 Europe (33%) Urban <EUR 20,000
Japan (51%) Urban/Sub Urban >JPY 5,80,00,000 Japan (56%) Urban/Sub Urban >JPY 5,80,00,000
Source: Deloitte Electric Car Market In India
5

6. The Indian Government has introduced various schemes and incentives
for promotion of electric vehicles in India
• Set up the Governing Council for Electric Vehicles
• Operate under the Ministry of Heavy Industries and Public Enterprises
• Develop infrastructure for electric mobility - charging stations
Governing Council • Council to have representatives from various Ministries – includes Road Transport
and Highways, New and Renewable Energy and Power and also industry
representatives
• Promote Joint Ventures, esp. in EV battery manufacturing & technology transfers
• In the Union Budget 2010-11, the Government of India reduced the excise duty on
Excise Duty electric vehicles from 8% to 4%.
• Components for Electric Vehicle is under 10%, which the manufacturers are
asking for a waiver
Concessional Duty • Import of electric vehicles attracts 14% and import of parts attract 4% duty
• Lithium ion batteries attracts 18%
• Delhi, Rajasthan, Uttarakhand and Lakshadweep don’t levy VAT;
• Chandigarh, Madhya Pradesh, Kerala, Gujarat & West Bengal offer partial
subsidy on VAT;
• Other states charge 4%-15% VAT
State Initiatives • Delhi Government provides the highest incentives for electric vehicles with tax
rebates amounting to 29.5% of the cost, (15% subsidy on the base price of the
Reva, along with 12.5% VAT exemption, and road tax and registration charge
refund)
Source: Finpro Electric Car Market In India
6

7. Table of Content
 Market Overview
 Key Players in the Electric Vehicles Market
 Drivers and Challenges for Growth
 Porters’ Five Forces Analysis
 Growth Strategy
Electric Car Market In India
7

8. The Indian Electric Vehicles market in currently dominated by Mahindra;
however competition is expected to increase with entry of new players
• The major players in the Indian Electric Vehicles sector are Mahindra
Reva, Hero Electric Limited, Electrotherm Motor Limited and BSA
Motors Limited.
• Most of these operate in the electric two wheeler segment which
dominates electric vehicles market in India.
• An increasing number of joint ventures and mergers are taking place
between Indian and international car manufacturers.
• Mahindra Reva is the only electric car manufacturer having any
significant presence in the Indian automotive indutry.
– Mahindra took over the Bangalore based Reva Electric Car Company which
manufactures India’s and the world’s first mass produced electric car, now
available in 24 countries.
– It is currently the world’s largest operational plant dedicated solely to battery
electric vehicles and has several initiatives lined up for the future.
• New players looking at entering the electric car market include:
Electric Car Market In India
8

9. Table of Content
 Market Overview
 Key Players in the Electric Vehicles Market
 Drivers and Challenges for Growth
 Porters’ Five Forces Analysis
 Growth Strategy
Electric Car Market In India
9

10. Drivers and Barriers for Growth - Summary
Electric Car Market In India
10

11. Government incentives coupled with technology advancements could propel
growth for the electric vehicles market
• Subsidies for adoption and manufacturing clean technology
Government Incentives and
Policies • Emission Standards
• Battery technologies
Technology advancements • Composite material technology
• Smart grid
• Energy prices
External factors • Quality and availability of grid power
• Initiatives towards energy independence
• New vehicles
Industry investment • Automotive R&D
• Electric technology R & D
• Charging infrastructure
Source: Deloitte Electric Car Market In India
11

12. Customer acceptance and better technology infrastructure are the main
barrier for the growth of electric vehicles in India
• Indian customers are price conscious – REVA (Mahindra’ electric car) starts from
INR 3.5 Lacs where there are other traditional cars available at a lower price
Pricing
• Customers consider vehicles as an utility and are not concerned about clean
technology. As a result, customer may not agree to pay a premium when there are
cheaper options available
• Though Indian government has introduced subsidies and incentives for electric
vehicles, it has still not been able to reduce price and increase the popularity of
Failure of Government
electric vehicles
Schemes and Incentives
• Currently, there are uniform tax rebates across the country with each state having
their own tax policies
• There are limited number of battery charging stations and is restricted to few
select areas
Lack of Technology • The battery technology needs to progress to meet the commuter expectations of
Infrastructure range, recharging and affordability, for them to switch over to Electric Vehicles
• In India most of the EVs run on Lead Acid batteries wherein Li-on batteries are
required to improve the EV’s efficiency
Source: Deloitte , KPMG Electric Car Market In India
12

13. Table of Content
 Market Overview
 Key Players in the Electric Vehicles Market
 Drivers and Challenges for Growth
 Porters’ Five Forces Analysis
 Growth Strategy
Electric Car Market In India
13

14. Porter’s Five Forces Analysis
Supplier Power Threat of Substitutes
• High technology costs • Hybrids might enter Indian
leading to higher pricing of market sooner and more
electric vehicle compared easily than electric vehicles
to traditional vehicles, because hybrids do not
especially cars require new refueling
• Lack of technology Buying Power infrastructure
infrastructure and support • Electric Vehicles are • CNG and LPG are already
from Government for considered as a rich man’s making inroads in the
promotion of clean toy automobile market
technology • Though scooters are
• Alternative fuels like CNG, available at cheaper price,
LPG cars are still expensive
compared to traditional cars
Threat of Rivalry • Customers are ready to buy Barriers to entry
• Electric Vehicles directly electric vehicles, however • Indian government has
compete with well after sales services, battery introduced many schemes
established business stations, fuel efficiency and and incentives to promote
model of traditional performance are some of the electric vehicles market
vehicles hindrances for buying an
• However, failure on the
electric vehicle
• With more players entering schemes and incentives,
the market, especially the lack of infrastructure and
traditional manufacturers, optimum business models
competition is expected to can deter entry of new
get intense players
Weak Fair Strong Very Strong
Electric Car Market In India
14

15. Table of Content
 Market Overview
 Key Players in the Electric Vehicles Market
 Drivers and Challenges for Growth
 Porters’ Five Forces Analysis
 Proposed Growth Strategy
Electric Car Market In India
15

16. Affordable pricing, after sales services, technological advancements
backed by smart marketing could help players to succeed
• Manufacturers need to price their product in lines with the traditional vehicles –
while electric scooters are available at cheaper price, cars also need to be
Affordable pricing and available at affordable price
introduce various variants
• This could be done by introducing variants to address the different sections of the
population
• Design of vehicles is also important area of focus – design needs to be more
appealing and acceptable by masses
• The Indian electric vehicle market lacks in technology infrastructure – hence it
becomes imperative that the players in the market should strengthen their R&D
teams
Technological advancements • Through technology, players should look at reducing manufacturing costs,
improving battery life, improve fuel efficiency, etc
• Set up more battery stations
• Electric vehicles, especially cars are considered to be a rich man’s hobby and not
as a necessity, therefore players in the electric vehicles market need to market the
product in a smart way in order to reach a larger mass
Smart Marketing • Players can lobby with the Government to market clean technology in order to
increase the popularity of electric vehicles
• Market products through multi channel promotional activities like industry
associations, Forums, social network, road shows, etc
Electric Car Market In India
16

17. Thank You
Electric Car Market In India