India Now The World’s 3rd Largest Auto Market — Will Electric Car Sales Start Taking off?
As the world accelerates the transition to electric vehicles, it is important for the world’s largest markets to lead the way in terms of adoption as this will have the most impact when it comes to reducing tailpipe emissions. We have countries such as Norway that lead the way in terms of EV share for new vehicle sales. For the full year 2022, market shares were 79.3% for BEVs, and 8.5% for PHEVs, combining to 87.8% in Norway. But in terms of overall volumes of vehicles sold per year for all powertrains, China has been the largest market for a while now, followed by the US and Japan. In 2021, 26.27 million vehicles were sold in China, 15.4 million vehicles in the US, and 4.44 million units in Japan. So EV adoption in these markets will be critical.
China is ahead of the pack again in terms of volumes of EVs sold, and is well on its way to transitioning to full EVs much faster than previously thought. In 2022, over 5 million plug-in vehicles were sold in China. In 2022 the battery-electric market share was close to 20%. The number was close to 30% for all plug-in vehicles. The US recently crossed an important mark of 5% EV share for new vehicle sales, a sign that EV sales are starting to come in decent numbers as well. The Japanese EV market has been very slow, but is starting to see some activity from foreign automakers such as BYD which are introducing the BYD Seal, Dolphin, and ATTO 3 vehicles to the Japanese market.
News from earlier in this month says India has now overtaken Japan to become the world’s thirds largest car market across all drivetrains. New vehicle sales were at least 4.25 million units in India last year, beating Japan that had 4.2 million.
To show just how slow the Indian electric car market has been, if you look back to January 2018, only 25 electric cars were sold in that month and just over a thousand EVs were sold that whole year. The first month to cross the 1,000 EV sales mark was in March 2021. Sales have been increasing steadily since then thanks companies like Tata introducing some new models and slowly ramping up production.
With models such as the Nexon and Tigor EV, Tata has about 90% of the electric car market in India. The recently introduced Tata Tiago EV, which is priced at parity with similar ICE vehicles, has landed with a bang. The Tata Tiago was launched on the 28th of September and registered 20,000 bookings in a short space of time. There is now a 4-month waiting list for the Tata Tiago. 20,000 bookings is very impressive in India. Mahindra is also stepping up its EV portfolio and recently launched the XUV400, its first electric SUV, which was first showcased on World EV Day in 2022. The company says, “the XUV400 is designed and engineered for car buyers looking to join the electric revolution. Set to take Mahindra’s electrification journey forward, the all-electric SUV will be priced from INR 15.99 lakh” (about $19,500).
So, the selection of battery-electric vehicles available for consumers in India is growing. The good thing is that we are not just seeing more of the expensive larger luxury EVs that start from well over $70,000 but we are also seeing more of the affordable EVs in the $10,000-$25,000 range. Another major incentive for India to accelerate the adoption of electric vehicles is its high oil import bill. India’s crude oil import bill nearly doubled to $119 billion in the fiscal year that ended on March 31, 2022. 40% of India’s fuel demand is for diesel, mostly used by trucks. 2- and 3-wheelers have been the rock stars of India’s EV revolution so far. Hopefully 2023 will be the breakout year for the electric car market in India.
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