NEW DELHI — In the polluted capital of New Delhi, more and more cars with green license plates are hitting the roads. They’re electric vehicles, and they’re becoming increasingly popular outside Delhi too.
While internal combustion engines are still the norm in the country, EVs are now a common sight in major cities, and ride-hailing services that use EVs, such as BluSmart, are becoming increasingly popular.
According to the Federation of Indian Automobile Dealers Associations (FADA), around 90,000 electric vehicles were sold in FY23. While this figure still represents just 2% of the total number of cars sold in that fiscal year, it is almost double the figure from the previous year.
The Indian government, which struggles with both air pollution and a trade deficit caused by crude oil imports, is encouraging the adoption of EVs through subsidies.
Maruti Suzuki India, the largest manufacturer with a 40% share of the Indian passenger vehicle market, is accelerating the construction of a factory in order to launch an EV during fiscal year 2024. Chinese manufacturers such as BYD are powerful in the global market, but their penetration in India remains low due to tensions between the two governments.
As a result, India’s largest conglomerate, Tata Motors, leads the electric passenger vehicle market with a 70% share, and in January opened a showroom dedicated to electric vehicles near New Delhi.
In June, customers at the store were considering buying an EV. “I’m thinking of buying a model for around 1.2 million rupees (about $14,000). It’s more expensive than a regular gasoline car, but the overall running costs will be lower,” one customer told Nikkei Asia.
Electric two-wheelers are also becoming more popular, with sales approaching 950,000 units in fiscal year 2023. Ola Electric Mobility, a startup backed by SoftBank Group and others, has secured the top spot with sales of over 300,000 units.
Ola is preparing to list on the Indian stock market and will use the funds raised to expand production. It will be able to produce 10 million vehicles per year in the future. The company is also focusing on hiring women, and at its factory in Tamil Nadu, the southernmost part of India, the majority of staff involved in parts assembly and other tasks are women.
The electrification trend is also evident in three-wheelers, including rickshaws, a popular mode of transport for locals, with several local manufacturers competing in the market: Japan’s Terra Motors makes and sells electric three-wheelers that are often used as taxis, while the same shareholder-backed company, Terra Charge, has launched an EV charging service in India.
Nakul Zaveri, partner and co-head of climate investment strategy at Leapfrog Investments, a UK- and India-based private equity firm, believes the EV market will continue to grow in India due to concerns about air pollution and climate change. Leapfrog recently invested in a startup focused on car battery swapping stations, along with Mitsubishi UFJ Bank and Panasonic.
Mitsui Global Strategic Studies Institute predicted last year that by 2030, the share of electric two-wheelers, three-wheelers and four-wheelers in India would be 60%, 90% and 20%, respectively.
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A Tata Motors electric vehicle was seen driving through the streets of Paharganj, a popular tourist destination near New Delhi railway station, in June.
In New Delhi in 2023, traffic moves at a snail’s pace amid haze and smog. (Photo courtesy of Getty Images)
BluSmart is a ride-hailing app whose vehicles are all EVs.
A car is seen outside the TATA.ev showroom in Gurgaon in June. TATA.ev specializes in electric vehicles.
Workers assemble electric scooters at an Ola factory in Tamil Nadu in May. (Photo: Shinya Sawai)
A driver peers out of a Terra Motors electric three-wheeler in Gurgaon in June.
