In the future, depending on how the Indian market changes

In the future, depending on how the Indian market changes, it seems that who is the strongest in the electric vehicle market will be revealed. Currently, the Indian government is very serious about electric vehicles.
The future electric vehicle market has the best potency.

From Tesla’s perspective, India will inevitably become a very important market for Model 2 sales.

Eventually, there may be a competitive structure between Model 2 and Chinese low-cost vehicles, but fortunately, the conflict between India and China is beyond imagination, so the possibility of a local Chinese company entering India is very slim.

There are currently 70% tariffs in India on imported EVs under $40,000, and 100% tariffs on vehicles over $40,000. (Actually, the country’s automakers protection law…)

However, India is considering drastically lowering tariffs on imported electric vehicles to 15% over the next five years on condition that Tesla begins construction of the plant next year

According to Bloomberg sources, Tesla and the Indian government are currently on the verge of finalizing a deal, which will allow Tesla to export vehicles to India from next year and build a Tesla plant there within two years. At least $2 billion is expected to be invested in the early stages of the plant’s establishment, and it also has plans to purchase up to $15 billion in auto parts in India. We are also considering manufacturing some batteries in India to reduce battery costs.

■ Current Status of Electric Vehicles in India
According to The History of Road Transport & Highways, more than 1 million electric vehicles were sold in India in just nine months of 2023.

This represents 6.4% of India’s total car sales.

However, so far, two-wheeled vehicles account for 56% of total electric vehicle sales, followed by three-wheeled vehicles and passenger vehicles. (For reference, 236,000 electric vehicles were sold in 2021, and the proportion of two-wheeled vehicles was 60%)

Currently, India also feels sincere about electric vehicles, and the Indian government is implementing various policies to promote the purchase of electric vehicles, including FAME, which provides benefits such as various subsidies and taxes related to the purchase of electric vehicles, expansion of charging infrastructure, and reduction of road usage fees.

For example, in the case of FAME, the existing ICE acquisition tax is up to 30%, while an acquisition tax of 6-12.5% is applied to electric vehicles/hybrid vehicles. In addition, grants of US$165 to US$1065 will be provided for Hybrid, and grants of $900 to $2,010 will be provided for EVs

In fact, if you look at the contents of Indian policies, you can see that the focus is on BEV rather than HEV. India ranks third in the world’s most polluted air, according to the World Pollution Report, such as building an infrastructure expansion for electric vehicle charging stations and raising import tariffs on lithium-ion batteries. The Government of India will know better that the limits of carbon savings are clear with HEVs.

■ Indian EV Market Outlook (2023-2028, 5yrs)
In 2023, India’s electric vehicle market is estimated to be approximately $5.61 billion and is expected to increase to $37.7 billion by 2028, according to Mondor Intelligence, an Indian market research and consulting firm.
In terms of annual average growth (CGR or CAGR) over five years, it is quite steep at 46.38%.

In addition, the institution also analyzes that HEV is the largest in the Indian EV market so far, but it is only a process to BEV, and BEV is the fastest growing. (I did not mention it in this article, but other Indian institution reports I looked for seem to have many similar nuances.)