Future of EV Prices in India ! Is EV Too Expensive for Indian Markets?
India is on track to meet its goal of having 30% electric vehicles (EVs) on the roads by 2030. While this objective may appear ambitious to some, it becomes feasible with the implementation of appropriate measures. A crucial initial step in reaching this target involves ensuring that electric vehicles are priced competitively, aligning with the costs of their internal combustion engine counterparts.
For a price-sensitive market like India, EVs need to be more attractive to the end user in every aspect. Feature-loaded, safe, easy to operate, high on mileage, and most importantly easier on the pockets of the Indian consumers. So, is that going to happen anytime soon? Are EVs going to achieve price parity with their fossil-fuel-based competitors? Let’s find out.
How Can the EV Prices Come Down?
Considering various factors, several reasonable assumptions can be drawn regarding the price trends of electric vehicles (EVs) in India in 2023.
Reduced Battery Costs: Over 50% of an EV’s components, including the battery and powertrain, contribute significantly to its cost. In contrast to conventional combustion engine vehicles (20%), the cost of EVs can be notably higher. However, the commercial viability of lithium-ion batteries has led to substantial price reductions. Ongoing research and advancements in battery technology are expected to further drive down overall EV battery costs.
Increased Demand: Anticipated growth in awareness among Indian consumers regarding the advantages of EVs is likely to boost demand. The concept of an ideal family car, offering practicality, affordability (eventually), and a compelling return on investment, may undergo a positive transformation.
Improved Charging Infrastructure: Addressing range anxiety, a common concern among Indian consumers, is a priority for the government. Plans are in place to establish a robust charging infrastructure nationwide, accelerating EV adoption and alleviating concerns about limited range.
Economies of Scale: With rising global sales of EVs, achieving economies of scale becomes feasible. As sales volumes increase, there is potential for a decrease in the per-unit price of EVs, benefiting manufacturers, suppliers, retailers, and consumers through reduced raw material costs.
Price Parity: Key figures in the automotive industry concur on the eventual price parity between traditional combustion-engine vehicles and EVs. Government subsidies and incentives further contribute to narrowing the projected timeline for achieving this parity.
Broader Markets: As more car manufacturers invest in the EV market, consumers will enjoy a wider array of options. The Indian EV market is forecasted to grow by 66.52% by 2029. Increased competition among major players is expected to result in a healthy pricing environment, ultimately benefiting consumers.
The electric vehicle (EV) market is poised for exciting developments in the next decade, with the Indian EV industry displaying resilience and experiencing steady growth each year. With a solid foundation already in place, attention is now turning towards how the Indian automotive market can effectively introduce its EV offerings to potential customers. Indian automakers are actively capitalizing on this opportunity, while policymakers and the government are deliberating on sustained measures to incentivize EV buyers. This encompasses initiatives such as establishing a widespread network of EV chargers and driving down battery costs. Consumers are becoming increasingly informed and discerning in their choices, further emphasizing the need for a well-thought-out strategy.
Therefore, a harmonious blend of government support and healthy competition among carmakers to deliver top-notch products to their customers appears to be the ideal formula for creating a sustainable EV market in the long run.
Source: Blusmart
