Ahead of Tesla’s entry, India’s EV makers slash prices to boost demand in world’s third-largest automobiles market

EVs currently account for around 5 per cent of India’s automobile market, but that figure is projected to grow to 40 per cent by 2030, at which point EV revenues will reach US$100 billion annually, according to a report by US consultancy giant Bain & Co published in December.

Electric car penetration, which trails two- and three-wheelers, is likely to hit about 15-20 per cent, says Mihir Pant, a Mumbai-based partner at Bain & Co.

Unlike other markets where EV sales have slowed, India’s appears poised to take off.

“India is late in terms of penetration levels [of EVs], but now we can say that the ball has started rolling,” said Puneet Gupta, director of mobility at S&P Global.

India has expanded a production-linked incentive (PLI) programme for the manufacture of EVs, which includes tax breaks, cheaper rentals and discounted electricity charges that are tied to production volume and greater localisation.

Nearly all Indian carmakers import solar cells, a key component in batteries, which account for most of an EV’s cost.

Besides a plunge in battery prices and sluggish global sales, Gupta said Indian manufacturers were rolling out discounts in anticipation of PLIs and more local manufacturing, providing ammunition for EVs to start to challenge traditional cars with internal combustion engines.

Ola Electric last month became India’s first e-scooter company to qualify for the government’s PLIs. The Tata group and Mahindra have also secured PLI approval for one EV model each.

Tata Motors, which accounts for around 70 per cent of EVs in India, cut the prices of its electric vehicles by 1-8 per cent on February 13, offering discounts of up to US$1,450 in what was a first for an Indian carmaker.

Other EV makers are likely to follow Tata’s