Electrifying Indian Mobility Report July 2022

• Published date: 10 August 2022
• Subject Matter: Environment, Energy and Natural Resources, Energy Law, Environmental Law, Renewables, Climate Change, Clean Air / Pollution
• Law Firm: IndusLaw
• Author: IndusLaw &nbsp

FOREWORD

2022 is proving to be a record year for EV sales giving a much-needed validation and confidence for consumers weighing their options between ICE vs EV.

Indian Startups are keeping up with the times to have the technological edge and the traditional companies too have quickly adapted to the change in consumer preferences. The government has been very proactive and supportive with EV policies and incentives. At the same time, it's great to see many states coming up with state level policies to support the EV industry.

The total cost of ownership is likely to reduce going forward with the growing demand and strong government resolve to bring parity between ICE and EVs. Hon'ble Road Transport and Highways Minister Nitin Gadkari, recently said 'The prices of all electric vehicles (EVs) will be equal to the cost of petrol vehicles in the country within one year'.

Overall EV financing remains a concern for the industry, and there is a need for government and the larger investor community to come together and come up with solutions.

PE/VC investors poured in around $1.7 billion in EV industry in 2021 while the number has touched approx. $666 million in 2022. With the growth in ESG and Climate specific funds, the investment momentum is expected to continue. As the startups and companies grow, we are seeing many new and 1st time investors join the bandwagon.

Fast adoption of EV across all the segments is truly the path to the green frontier.

I thank all of you for your support and look forward to your continued participation in IVCA initiatives which is working tirelessly to strengthen the Indian private equity and venture capital ecosystem.

I thank the EY and IndusLaw teams for putting together this report and for their detailed work.

EXECUTIVE SUMMARY

The Indian Electric Vehicle ecosystem is currently in the initial stages of development but has been gaining traction. In 2021, EV registrations amounted to ~330k units, a jump of 168% from 2020. The sales were led by 2- and 3-wheelers - ~48% and ~47%, respectively - followed by passenger vehicles at ~4%. E-rickshaw/e-kart category (top speed less than 25km/ hr) takes the major share among three wheelers with ~45%. E-buses are included in others with a share of 0.36%.

The spike can be attributed to the need for personal mobility, increased awareness of the environment and rise in prices of gasoline (which have increased by INR 43 in the three years from 2019 to 2022). The second phase of Faster Adoption and...