A new report by the India Energy Storage Alliance predicts that demand for electric vehicles in India could grow by up to 49% per year between 2021 and 2030 in a business-as-usual (BAU) scenario. At this rate, annual EV sales would reach 17 million units by 2030, with almost 15 million (88%) of these vehicles projected to be electric two-wheelers (e-2Ws).
Battery demand is anticipated to increase by 41% annually between 2021 and 2030, reaching 142 GWh from 6.5 GWh in 2021, according to IESA. It said that lead-acid batteries still dominate the Indian EV ecosystem due to high demand for e-rickshaws. Lead-acid batteries accounted for 81% (5.3 GWh) of the 6.5 GWh market in 2021.
However, the market share of lithium-ion batteries has been steadily growing, said IESA. And in 2021, for the first time, sales of such batteries exceeded the 1 GWh threshold. Among lithium-ion chemistries, lithium iron phosphate (LFP) is the chosen option for electric three-wheelers (e-3Ws) and electric four-wheelers (e-4Ws). Nickel manganese cobalt (NMC) is the preferred option for e2W and e-buses, according to IESA.
The research report considers three different market scenarios to make projections for the current decade. IESA expects the Indian EV market to grow quickly after the 2024-25 period, as the initial EV costs become comparable with those of internal combustion engine vehicles due to falling battery prices, advancements in EV technology, higher domestic production, and economies of scale.
According to the report, the main factors driving the EV market’s expansion in the current decade will be rising consumer awareness, rising fuel prices, commitments from fleet aggregators and corporations, the emergence of new players, advancements in EV technology, ongoing subsidy support from both the central and state governments, and the anticipated implementation of strict emission standards (CAFÉ norms from 2022).
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