Moody's suggests govt incentives & charging infrastructure key to driving EV penetration in India, currently at 1%

Moody's Investors Service has stated that India, the fourth-largest car market globally, only has a 1% EV penetration. To drive EV growth, Moody's recommends that the Indian government implement incentives, such as local battery manufacturing, state-level subsidies, and a cut in GST rates. However, the country's ability to meet its target of 30% EV sales by 2030 will depend on consumer readiness to switch from traditional ICE vehicles and the availability of charging infrastructure.

Tata Motors leading the Indian EV market

Tata Motors has an early mover advantage in the Indian battery EV market, according to Moody's, with an 85% market share (April-December 2022). The company plans to expand its EV lineup from four models to ten by March 2026 and has already raised $1 billion from private-equity investor TPG. Tata Motors has close to 4,300 charging points and a presence through 250 dealers across 165 cities.

Global EV market expected to see regional variations by 2035

Moody's predicts that by 2035, the global BEV market share will be more balanced, with China's share coming down to a third, Europe's share increasing to nearly 30%, and the US climbing toward 60% BEV penetration, raising the country's global BEV market share to around 25%. Emerging markets will remain underrepresented, but stricter regulation could accelerate the transition.

India's electric vehicle market on track for significant growth

According to the Economic Survey 2023, India's domestic electric vehicle market is expected to see a 49% compound annual growth rate between 2022 and 2030, with 10 million annual sales by 2030. Last year, EV sales in India reached a million units, accounting for 4.7% of overall automobile sales of nearly 3.7 million passenger vehicles in 2022. The electric vehicle industry is projected to create around 50 million direct and indirect jobs in the next seven years.