Electric 2W Penetration Might Reach 35%, e-3W 75% by 2030: Report

A new report has predicted that electric 2W penetration in India is expected to reach 25-35 percent and that of e-3W at 65-75 percent by 2030.

A new report has predicted that electric two-wheeler (2W) penetration in India is expected to reach 25-35 percent and that of e-three-wheelers (3W) at 65-75 percent by 2030. The report highlights that the figures will be reached even though OEMs and both central and state governments still need to work on an integrated policy and creating a conducive ecosystem for EV adoption in the country.

According to the report, ‘Shifting Gears, the evolving electric vehicle landscapes in India’ prepared by KPMG in association with CII, currently, only a few state EV policies provide guidelines and incentives on battery recycling.

In its report, KPMG in India besides the 2W and 3W segment, expects the passenger vehicle (PV) electrification to follow with 10-15 percent penetration in the personal segment and 20-30 percent in the commercial segment by 2030.

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However, about 10-12 percent of the overall market for buses is expected to be electrified by 2030, it added. A substantially low prediction (if the prediction stands for both commercial and public segments), considering the claims that have been made by the governments both central and state in distribution and procurement of electric buses. And, the conducive policy schemes and incentives that provide the extra impetus for their adoption.

“EVs are on course to fulfil their promise as a game-changer for the automobile industry. Two-wheeler (2W) and Three-wheeler (3W) auto segments are likely to lead the adoption curve followed by e-buses and passenger taxis, ” said Rohan Rao, Partner – Industrials and Automotive, KPMG in India. Further adding that directionally several factors, including the availability of charging infrastructure, robust financing ecosystem, reduced battery prices and increased customer awareness, are paving the way for a new era of EV adoption.

The government is also pushing EV policy to address some of the adoption barriers, he said, adding that EVs are emerging as a disruptive force, with several players experimenting with and discovering new innovative business models and use cases. Stating that the ecosystem creation is the key, Rao said a widespread network of charging stations is vital for ensuring the fast adoption of EVs.

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Since the running cost of EVs is much lower than IC engine vehicles (one-tenth for 2W and 3W), a strong case emerges for a shift to EVs in the B2B segment, he added.

According to the report, innovative business models such as battery swapping have emerged and will become mainstream to enable widespread EV adoption. Further, in line with Make-in-India initiatives and global supply chain realignments, the government is strongly pushing the localisation of production to achieve the twin objectives of self-reliance and job creation, the report stated while emphasising on a coherent recycling policy.

Noting that the state EV policies could lay a greater focus on demand incentives that shall bring down the upfront cost differential, the authors believe, they could have certain targets for the conversion of EVs, at a segment level or for a particular industry/use case.

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“EVs are undoubtedly the way forward for sustainable mobility and are increasingly gaining traction across the world. In India, the charge is being led by 2W and 3W segments, followed by public transport and non-public passenger fleet. One of the biggest hurdles India currently faces is our limited ecosystem for EVs,” said Jeffry Jacob, Partner, Management Consulting – Industrials and Automotive, KPMG in India.

pc: Ather