According to a survey by the India Energy Storage Alliance, the EV industry in India is expected to grow at a CAGR of 36% by 2026. Additionally, the EV battery market is expected to grow at a CAGR of 30% during the same time period.  The Indian electric commercial vehicles market is mainly driven by the increasing government initiatives to achieve zero carbon emissions. EV sales, excluding E-rickshaws, in India witnessed a growth of 20% and reached 1.56 lakh units in FY20 driven by two-wheelers. Governments of several nations are focusing on the development of infrastructure to roll out the EVs to curb the rising pollution level and progress along with sustainable development. For instance, in July 2019, the government of India reduced Goods and Service Tax (GST) on electric vehicles from 12% to 5%. In April 2019, the Indian government launched the second phase of the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme to boost the EVs sales in the country. The government has allocated around $1.4 billion to boost EVs sales in the country for over a period of three years from April 2019. This would lead to an expansion of the country’s EVs fleet size in the near future. According to the IEA, India reported around 100,000 two-wheeler EVs sales over 2018-19 which led the country’s two-wheeler EV fleet size to hit 600,000 in 2019. Moreover, electric three-wheeler sales in India reached over 630,000 units in 2018-19. Under the FAME program, purchase subsidies for eight electric three-wheeler models will be provided, hence further supporting the market growth.

Though the market is escalating, the lack of charging infrastructure remains the major challenge for industry growth. For instance, as per the data provided by the IEA, in 2018, India had only 352 publicly accessible chargers, and only 25 of them were fast chargers. However, the Indian government has taken certain initiatives to support the development of the charging infrastructure. For instance, under FAME phase II, the government has allocated around $145 million for EV charging infrastructure. The fund is allotted for the next three financial years from April 2019 to April 2022, with a ratio of 3:4:3.

FOREIGN DIRECT INVESTMENT (FDI)

In 2016, 100% FDI had been permitted under automatic route for the e-vehicle by the Government of India. 

• Category 1

100% FDI Permitted through Automatic Route

• Category 2

Upto 100% FDI Permitted through Government Route

• Category 3

Upto 100% FDI Permitted through Government Automatic Route

GOVERNMENT SCHEMES AND INITIATIVES

• The Automotive Mission Plan 2016-26 is a mutual initiative by the Indian Government and the Indian Automotive Industry to lay out a path for the industry's development. India's government aims to make it a worldwide manufacturing hub. The government established a voluntary automobile scrappage strategy in the Union Budget 2021-22 to phase out outdated and defective vehicles. 
• In August 2019, the government has approved 5,595 electric buses for intracity and intercity operations in 64 major communities under the second phase of the FAME India scheme to promote clean mobility in public transportation. The Ministry of Heavy Industries and Public Enterprises invited cities having a population of one million or more, smart cities, state or UT capitals, and special category states to submit an Expression of Interest (EoI) for a proposal to send electric buses on an operational cost basis. However, despite the fact that the FAME-II project also seeks to put 7000 electric buses on the road, battery technology is still not evolved enough to manage the loads that buses carry. Companies such as Tesla have been leading the drive for EV adoption in the United States and the West with their cars. Because of the way the products are developed, electric four-wheel (e4Ws) vehicles in India still face many challenges. Range decreases as passengers and weight increase, similar to buses. With bigger battery packs, charging times for e4Ws will become prohibitive. The limited range of these vehicles will make them impossible to utilise outside of municipal limits. 
• The 2019-20 budget announcement for tax subsidies for loans on EVs is aimed at proliferating new forms of automobiles.

KEY PLAYERS IN THE INDIAN ELECTRIC COMMERCIAL VEHICLES MARKET

The Indian electric commercial vehicles market has various players contributing majorly to the overall growth. Some of the key players operating in the Indian electric commercial vehicles market include Anhui Ankai Automobile Co. Ltd., Arrival Ltd., Ashok Leyland, Avast Group of Companies, BlueBird Corp., BYD Co. Ltd., Chanje Trucks, Daimler AG, Ebusco B.V., Ekova Electric A.S., among others. 

RECENT TRENDS AND STRATEGIES

• Ashok Leyland's sales in February 2021 stood at 13,703 units, compared with 11,475 units in February 2020, registering a growth of 19%.
• In June 2018, Tata Motors created a separate vertical for electrical vehicles to tap into the market potential.  
• In April 2018,  Mahindra presented its first electric bus, the e-COSMO, along with a variety of other electric vehicles at this year's Expo, as part of its 'Future of Mobility theme, spearheading the country's electro-mobility drive. The efficient state-of-the-art' direct drive motor developed in conjunction with TM4, one of the most famous participants in the global EV ecosystem.  (MTBL) e-COSMO. This zero-emission bus features a highly reliable electric power train system, battery packaging with a complex battery management system (BMS), regenerative braking system, and a variety of other custom-designed features.