INDIA SLOWS DOWN IN EV LANE AS OTHERS SPEED AWAY LACK OF DEMAND, INFRASTRUCTURE GAPS STALL ENGINE

While the world is moving at a fast pace to embrace electric vehicles, India seems to have lowered a gear or two down, with the result that the country does not even figure in the growth estimates of major EV markets around the world.

Even an optimistic report by India Energy Storage Alliance estimates the size of the (EV) market in India at 63 lakh unit mark per annum by 2027. Significantly, a majority of these vehicles will be two-wheelers, where the adoption rate is much better. But the overall Indian adoption rate is muchless compared to estimated 72 percent globally
within the next ten years and close to 100 percent in another decade.

The roadmap for EV cars became somewhat clear when Maruti chairman RC Bhargava recently indicated that his company was in no hurry to join the electric vehicle race due to lack of demand. Although the
government is pushing for EVs, the company says it will enter the segment only when it becomes feasible for customers in terms of affordability as well as the infrastructure for charging is developed to a satisfactory level.

While other manufacturers, such as Mahindra, Tatas etc are preparing for a transition, the movement is yet to get traction as a lot of catching up in required in terms of fulfilling the conditions for the switch.
The government has extended the second phase ofthe FasterAdoption and Manufacturing of Hybrid and Electric vehicle (FAME) scheme by two years to March 31, 2024, to push sales of electric vehicles. But the results have not matched expectations.

Globally, EV sales are projected to surpass 7 million cars this year, more than doubling 2020 sales of 3.2 million. Leading energy consultants Rystad Energy estimates that EVs, including plug- in hybrid electric vehicles (PHEV) and battery electric vehicles (BEV), will account for around one in every 10 new cars purchased, with a global market share of 10.3 percent, up from 5.3 percent last year. This market share will be anew global record, marking the first time EV sales have accounted for a double-digit share of total vehicle sales, which are projected to be around 69 million in 202.

Sales of EVscontinued their upward trajectory in September, with nearly
700,000 units sold. The top 10 countries in terms of EV sales accounted for a dominant 83 percent of global volumes. September marked the second consecutive month in which the market share of EVs among vehicle sales crossed 10%. With this, total EV sales have reached around 4.72 million vehicles through the first three quarters of 2021.

The rapid rate of EV sales growth worldwide is in large part due to widespread adoption in China, according to Abhishek Murali, energy transition analyst at Rystad Energy. More than 340,000 new EVs were sold inChina inSeptember 2021 alone, accounting for around half of global sales. The EV market share in China reached 19.5% in September. Last year, authorities in Beijing announced an action plan targeting a 40% EV share of all vehicle sales, doubling an earlier announced target of 20 percent by 2025.

Although China is driving the global numbers, several other countries are seeing high EV adoption rates. Norway, for example, continued to push towards its 100 percent zero- emission vehicle target, with the EV market share crossing 90 percent of
all vehicles sold during September. In addition, while Tesla remains the highest-selling manufacturer, Chinese automotive companies are moving boldly into the market.

Germany sold the most EVs in Europe in September, registering 56,000 sales. EVs also accounted for 30 percent ofthe German market share, while the percentage of petrol- powered vehicle sales remained flat at 38 percent. France took the number two spot in Europe, with close to 29,000 EVs sold as the country moves closer to achieving its 2022 target of 1 million total EV sales. The French government delayed its plan to reduce subsidies on BEVs and PHEVs from January next year, extendingthem by six months to July 2022. The UK, which has suffered a petrol shortage in recent months, saw growth in the EV market share, touching 22 percent of vehicle sales. Ahead of its move to ban non- electric, non-hybrid vehicles in 2030, the government also announced a requirement for local automakers to sellan increasing percentage of zero- emission vehicles every year.