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Key Points

India's electric vehicle market is experiencing rapid growth, with market share climbing to 4% in May 2024. Tata Motors continues to dominate the segment, selling 4,351 units and maintaining its leadership position. The government is actively promoting EV manufacturing through new investment guidelines and import incentives. Despite promising growth, potential supply chain challenges from rare earth material constraints could impact future expansion.

Key Points: India EV Sales Surge Past 4% with Tata Motors Leading Charge

  • Tata Motors leads EV market with 4,351 units sold
  • EV market share jumps from 2.6% to 4% year-on-year
  • Government introduces incentives for global EV manufacturers
  • Supply chain constraints may impact future growth
3 min read

Market share of electric cars in India accelerates past 4 pc in May

Electric vehicle market in India accelerates with 12,304 units sold in May, Tata Motors dominating the segment amid global supply challenges.

"This is an important milestone in our industry's journey towards electrification - Saharsh Damani, FADA CEO"

New Delhi, June 8

The market share of electric passenger vehicles (EVs) in India accelerated past the 4 per cent mark in May this year, from 2.6 per cent in the same month of the previous year, reflecting the increasing popularity of electric cars among Indian buyers as the country transitions to green mobility, data compiled by the Federation of Automobile Dealers Associations (FADA) shows.

The share of electric passenger sales in May is also 0.5 percentage points higher than the 3.5 per cent share in April as part of the rising trend.

The retail data shows 12,304 electric cars were sold during the month, compared to just 8,029 units in May 2024. The sales of electric cars in April this year stood at 12,233 units.

“This is an important milestone in our industry’s journey towards electrification. This growth has been driven by improvements in battery technology, better range, and lower costs compared to earlier electric PV models,” Fada CEO Saharsh Damani said.

Tata Motors maintained its market leadership in the electric car segment by selling 4,351 units during the month. Its closest competitor, JSW MG Motor, reported a strong year-on-year surge of 149 per cent, selling 3,765 electric cars in May, while Mahindra & Mahindra was ranked third with 2,632 units sold during the month. These top three electric car companies account for as much as over 87 per cent of total sales in the segment, according to FADA figures

However, FADA projects that global supply-chain headwinds (rare-earth constraints in EV components, geopolitical tensions) may limit urban consumer sentiment and exert cost pressure.

China, which is the dominant supplier of rare earth magnets, a critical component for the manufacture of electric vehicles, has started imposing restrictions on exports, which could pose supply chain problems.

“If the supply situation for rare earth materials doesn’t improve, we could see production slowdowns that may impact retail sales in the near future,” Damani said.

Meanwhile, the government notified guidelines on Monday for its forward-looking scheme to enable fresh investments from global manufacturers in the electric cars segment and promote India as a global manufacturing hub for e-vehicles.

To encourage global manufacturers such as US tech giant Tesla to invest under the scheme, the approved applicants will be allowed to import completely built-in units (CBUs) of electric four-wheelers with a minimum CIF (cost insurance and freight value) of $35,000 at reduced customs duty of 15 per cent for a period of five years from the date that the application is approved.

Approved applicants would be required to make a minimum investment of Rs 4,150 crore in line with the provisions of the scheme.

The maximum number of e-4Ws allowed to be imported at the reduced duty rate will be capped at 8,000 units per year. The carryover of unutilized annual import limits would be permitted.

- IANS

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Reader Comments

R
Rahul K.
Great to see EV adoption growing in India! 🚗⚡ But we need more charging infrastructure, especially in tier 2/3 cities. Range anxiety is still a big concern for many buyers. Hope the government speeds up charging station installations along highways.
P
Priya M.
The dependency on China for rare earth materials is worrying. We should focus on developing our own supply chains and recycling technologies. Atmanirbhar Bharat should include EV components too!
A
Arjun S.
Bought a Nexon EV last month and loving it! The running cost is just ₹1/km compared to ₹7-8 for petrol. More Indians should make the switch. Only suggestion - battery warranty should be longer than current 8 years.
S
Sunita R.
While the growth is impressive, 4% is still very small. EVs need to become more affordable for middle-class families. Current prices are too high even with subsidies. Also waiting for more compact EV options under ₹10 lakh.
V
Vikram J.
Good move to attract Tesla but ₹4150 crore minimum investment is too low. Chinese EV makers invest 10x more in their domestic market. We should set higher benchmarks to get serious players who will transfer real technology.
N
Neha P.
The 15% import duty concession is a smart policy. Will help bring global brands while ensuring they manufacture locally eventually. But we must monitor these companies to prevent them from just doing CKD assembly without real manufacturing.

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