The Role of private players and startups in the growth of the EV market in India

The air quality is getting worse in India. The country is the world’s second most-polluted region in the world. The situation is so worse that the average Indian life expectancy has been shortened by 6.3 years. When it comes to Delhi and the nearby areas, the average life expectancy of people has been shortened by more than 10 years. 

The Indian government realised the problem and when zeroed-in on the issue, it found that vehicles are one of the biggest sources of air pollution. According to studies, vehicles cause about 8% of greenhouse gas (GHG) emission and 20-30% of particulate matter 2.5 (PM). 

So, what’s the solution? It’s not possible to remove vehicles from the road or to cut down on vehicle sales, which is a big contributor to the country’s economy. The government found the alternative in electric vehicles (EV) and aims to achieve 30% electric vehicle penetration by 2030. 

But the fundamental question remains for the government how to implement the set goal. The private companies and startups can play a bigger role and help the government achieve the target. And this has already begun. 

According to Fortune Business Insights, the Indian electric vehicle is expected to grow from $3.21 billion in 2022 to $113.99 billion by 2029 at a CAGR of 66.52%. This growth will be fuelled by companies like Mahindra & Mahindra, Tata Motors, Hero Electric, Ather Energy and electric vehicle solution providers like telioEV. 

Giants Take the Lead 

Earlier this year in January, the vehicle manufacturer Mahindra & Mahindra made an announcement regarding their investment of Rs 10,000 crore for electric vehicles, which has been approved under the Maharashtra government’s industrial promotion scheme for electric vehicles. 

When it comes to EVs, Tata Motors is a leader in this space. According to media reports, Tata Motors is planning to invest Rs 15,000 crore in the EV segment in the next five years. The car maker is reportedly in talks with sovereign wealth funds and private equity investors to raise up to $1 billion via a stake sale in its electric vehicle (EV) business. While big companies are making some huge bets on EVs, startups are no less behind them. 

Ather Energy is a startup, which has been active in the EV space for the last 10 years. The Bangalore-based startup has launched the Ather 450X, an electric scooter that boasts impressive performance and a range of up to 85 km on just one charge. 

It’s important to understand that if we are talking about setting up a completely new industry, it requires a collective effort. While car manufacturers are playing a bigger role in developing EVs, others are involved in building infrastructures around it. 

Charging stations fueling power 

Early this year, Tata Motors announced to set up 25,000 EV charging points across the country that will supercharge the faster adoption of e-mobility over the next five years. So far, the company has about 3,600 public or semi-public chargers and more than 23,500 residential chargers. 

Not just car manufacturers, but efforts are continuing from startups in the EV charging segment which are offering supporting infrastructures for the growth of the EV ecosystem. For instance, Hyderabad-based software company “telioEV” is helping EV owners to locate nearest charging station through the app. Besides, the startup provides a charging management system on cloud that EV charging companies can use to monitor, measure, and regulate their charging stations.

Financial Benefits for EV Users 

The Indian government is also encouraging people to use electric vehicles. To widen EVs’ adaptability, it provides tax benefits to EV buyers. In March, this year, the government has introduced a new section “80EEB” to the Income Tax Act, 1961 that allows taxpayers to claim deductions on electric vehicles. The taxpayers can claim a deduction of Rs 1.5 lakh for each year until they repay on the loan of EV. 

India is sitting at the cusp of creating the biggest EV revolution in the world. Governments, companies, and startups are coming together to make this revolution successful and make the earth green again.