Author — Lokesh Dahiya (LinkedIn)
Yes, because it’s the present.
There are already more than 7 million electric vehicles on roads worldwide. Right now!
The market for electric vehicles, globally, has taken a huge leap forward in the past decade and the industry predictions suggest that we’ve only scratched the surface. Conservative predictions (link) forecast that the global electric vehicle stock (excluding two/three-wheelers) will reach 140 million by 2030, that would be 7% of the global fleet. However, a more ambitious scenario (link) predicts that the global annual sales will nearly reach 43 million of all vehicles (excluding two/three-wheelers), almost double the former prediction. In absolute terms, China remains the world’s largest EV market, with 2.3 million electric vehicles in active use. To put that into perspective, that’s nearly half of the global stock of EVs. Europe and the US are relatively far behind with 1.2 and 1.1 million EVs respectively. But when it comes to relative terms, the situation in Europe is far more positive. While in China, only 5.2% of China’s vehicles are electric, Norway had 56% of its vehicles running on electricity in 2019. The runners up Iceland and Netherlands had reached 25.5% and 15% EV penetration, respectively.
While passenger cars typically get all the credit for the EV revolution, there are other forms of transportation also that are gradually becoming greener. For instance, as of 2018, China has been the home to 5 million low-speed electric vehicles (LSEVs). Electric micro-mobility options in public transportation and sharing economy space have expanded rapidly since their emergence in 2017. Shared e-scooters, e-bikes and e-mopeds are now available in over 600 cities across more than 50 countries worldwide. An estimated 350 million electric two/three-wheelers make up 25% of all two/three-wheelers in circulation worldwide. In freight transportation, light-commercial EVs (LCEs) reached 3,80,000 units in 2019 and the global stock of electric buses in 2018 was 4,60,000.
Back home in India, the governments at both the central and state levels are eager to promote EVs. NITI Aayog proposed ambitious plan that only EVs should be sold in the nation by 2030. It had proposed all two-wheelers below the engine capacity of 150cc sold in country after March 31, 2025 and all three-wheelers sold after March, 2023 should be EVs. The GoI has a two-pronged strategy aimed at both buyers and manufacturers, in which it offers $1.4 billion in subsidies to buyers, while imposing a hike on import tariffs to increase domestic manufacturing. The GoI is mainly focusing to electrify public transportation as the subsidies are mainly available for two-wheelers, three-wheelers, and buses. In addition to the central government, about 15 states including Delhi, Haryana, U.P., Punjab, Andhra Pradesh, Orissa and Telangana have also released their EV policies to promote EV adoption. Investment sentiment has picked up for the sector with renewed interest by venture capitalists with over US $300 million reportedly invested in companies that deal with EVs and better battery technology this year. There are close to 10 four-wheeler and 20 two-wheeler models already on sale in the Indian market.
For now, and the foreseeable future though, the EV path India is on will most likely be paved by two and three-wheelers. KPMG in India expects 25–35% electric two-wheeler penetration, and 65% to 75% in electric three-wheelers by 2030 with passenger vehicle electrification following.
There’s a whole lot more to talk about — EV charging infrastructure, battery tech development, supply chain, and the environmental impact. Let’s take them up another week.