India’s EV Market to Grow at 44 percent CAGR Until 2027: IESA

India’s EV Market to Grow at 44 percent CAGR Until 2027: IESA

In its latest report, IESA has forecasted that India’s EV market is expected to grow at a CAGR of 44 percent between 2020-2027.

In its latest report, India Energy Storage Alliance (IESA) has forecasted that in its base case scenario – India’s EV market is expected to grow at a CAGR of 44 percent between 2020-2027, and is expected to hit 6.34-million-unit annual sales by 2027.

EV Market:

The “India Electric Vehicle Market Overview 2020-2027” report details that EV sales in India stood at 3,80,000 in 2019-20, and the EV battery market stood at 5.4 GWh during the year. Thus, in the base case scenario, the EV market is expected to grow at a CAGR of 44 percent between 2020-2027 and expected to hit 6.34-million-unit annual sales by 2027. Furthermore, the annual battery demand is forecasted to grow at 32 percent to hit 50 GWh by 2027, of this, 40+ GWh will be on lithium-ion batteries. The estimated battery market potential is USD 580 million in 2019 and is forecasted to grow to USD 14.9 billion by 2027.

Electric 2W:

The report then goes on to highlight that the electric two-wheeler (e-2W) market took up the highest share in 2019-20. Currently, low- and medium-speed e-2W (up to 40 kph) with conventional lead-acid batteries are dominating the market as they are already at par in terms of upfront cost with Internal Combustion Engine (ICE) vehicles. Secondly, high-speed segment with Li-ion batteries is also gaining momentum slowly. With more companies getting FAME-II certification in 2020, the sale of high-speed e2Ws is also expected to increase rapidly in the next two years.

It then adds that going forward, for the exponential growth of this segment, the market is demanding quality two-wheelers, which can compete with ICE vehicles in terms of both cost and performance. Further, with the continuous drop in the price of Li-ion batteries, power electronics, and advancement in EV technologies, the high-speed segment is also expected to hit the parity by 2024-25 without the subsidy support from the government and that could be considered as a tipping point for the exponential growth of this segment in the country. In terms of battery technology for E-2Ws, then as per industry inputs, lead-acid technology will be completely out of the market in the next five years.


In the Electric Bus segment, the report found that India is expected to be driven with subsidy support from the Central Government in phase-1 (2023-24) due to high upfront cost. Going forward, expansion is likely based on viability and access to financing. So far, FAME-I and FAME-II schemes have been the key drivers of the e-bus market in India. In 2019, the Department of Heavy Industry (DHI) sanctioned 5595 e-buses to various STU’s under the FAME-II scheme. Out of which, the procurement process of 2500 buses have already been completed and approved for subsidy by DHI, and further contracting is underway.

Electric 3W:

The low-speed electric three-wheeler (e-3W) market in India has grown very rapidly in different parts of the country since 2013. As per the International Centre for Automotive Technology (ICAT), there are 600+ registered players available in the segment. Apart from the registered OEMs, the grey e-rickshaw market has also evolved rapidly in different parts of the country particularly in West Bengal, Bihar, & Delhi NCR. As per industry estimation, 60 percent of the e-rickshaws today on road come from unorganised suppliers. The growth of the grey e-rickshaw market has slowed down due to the government’s push for ICAT certified models from late 2018 and the share of organised players is increasing slowly.

Going forward, the industry believes that there is a huge potential for the growth of the e-rickshaw market in the upcoming years as many new markets such as Raipur, Indore, Bhopal, Orissa, etc. have opened last year. Moreover, the South and North East markets are also expected to open in the upcoming years. In terms of battery technology, lead-acid continues to dominate the market due to strong after-sales service. However, OEMs have started shifting towards Li-ion batteries. As per ICAT, 80 percent -90 percent of the newer models tested and certified are based on Li-ion batteries.

The high-speed e-3W (L5) market is currently at a very nascent stage and has opened mainly at the B2B or in the cargo segment due to the requirement of performance vehicles. Low-cost financing is a key constraint hindering the growth of this segment. Going forward, the industry believes that the market will grow very rapidly in the upcoming years as many state governments are planning to convert the existing fleet of autos into electric under their EV policies. Apart from state governments, e-commerce companies are looking to increase their fleet size and have already announced their targets. Secondly, as per industry, the battery swapping option could be a game-changer for this segment and has the potential to disrupt the market.

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Ayush Verma

Ayush is a staff writer at and writes on renewable energy with a special focus on solar and wind. Prior to this, as an engineering graduate trying to find his niche in the energy journalism segment, he worked as a correspondent for