6.5% of total vehicles sold in India in 2023 were EVs

The Electric vehicle industry in India is witnessing rapid growth with a year-on-year (y-o-y) surge of ~50% in CY2023. EVs accounted for 6.5% of total vehicle sales during the last calendar year. The E2W segment has been the torchbearer with 56% of the total EV sales in CY2023. In terms of y-o-y sales growth, the Electric car segment saw the highest growth rate of 116% in 2023 followed by E3W cargo, and E3W passenger segments which rose by ~70% and ~65%, respectively in the same period.

As shown in the chart, in CY2023, the EV adoption rates increased gradually on a year-on-year basis across different segments.

  • As of CY2023, more than half of the three-wheeler passenger segment has been electrified. We don’t see a significant difference in adoption rates between CY2022 and CY2023 since both ICE and Electric 3W segments saw similar sales growth.
  • The three-wheeler cargo segment had ~41% contribution in the total sales from electric variants in CY2023. The segment has shown a promising ~10% increase in adoption rate each year. The booming logistics and e-commerce sector has played key role in the overall cargo segment (including both EV and ICE). The favourable cost economics has made top e-commerce brands like Flipkart and Amazon tie-up with OEMs like Magenta Mobility, Mahindra, and others for zero-emission last-mile deliveries.
  • The E2W adoption increased by only 0.9% in CY2023, even though the y-o-y sales rose by 35% in CY2023. The reason behind high sales but low penetration is that both the E2Ws and ICE two-wheeler segments’ sales grew in similar proportions in CY2023.
  • E-Bus sales grew by 38% in CY2023. The chart, however, shows a fall in the adoption ratio because of a significant rise in ICE bus sales by 90% during the year.
  • E-Cars stood last in the adoption rate across segments. Such low adoption could be because of lack of economic product models availability, higher upfront costs and no specific incentives or subsidies provided under FAME-II for personal cars.

As per Niti Aayog estimates, by 2030, EVs are likely to achieve about 80% penetration in 2W and 3W segments each, 30% in personal cars, 70% in commercial cars and 40% in bus segment. Current adoption rates signify that E2W and E3W segments can achieve their respective targets within the next 3-5 years. E-Cars can see a better adoption if fuelled with incentives as done for E2W and E3W segments in FAME II.  Government is pushing electrification of public transport which will result in promising E-Bus sales in the upcoming years. Moreover, with better infrastructure, right policy push, increased investments in the manufacturing, localization, R&D and collaborative efforts, we would be able to see more EVs on India roads by 2030.