Electric passenger vehicle penetration in India will be 15 per cent by 2030. 

According to a BNP Paribas India EV Report, the entry of key Original Equipment Manufacturers (OEM) in the electric vehicle space that presently plays in ICE will significantly change penetration.

“We see inflexion in electrification to be at least a year away. FY25 will be a critical year for the industry, in our view, given multiple EV model launches (some of which could be at lower price points) from market leaders, TTMT, Hyundai, and MM and most importantly the potential entry of MSIL, the market leader in the ICE segment. However, any negative development in incentives could pose an additional headwind to our assumption,” mentions the India electric vehicle report.

Further, the report states that India could be Asia’s next electric vehicle powerhouse with a comprehensive battery cell manufacturing plant announced.

“The availability of electric vehicles will become wide as customers do not see electric vehicles as a completely different product but as a different power train and a passenger vehicle,” said Kumar Rakesh, IT & Auto Analyst, BNP Paribas. 

Tesla’s entry into India is expected to drive localisation and accelerate the electric vehicle manufacturing capabilities. 

“We see this as a positive for the entire industry as it could bring down the cost of manufacturing EVs, which is already attractive relative to peers. While disruption risk to incumbents remains from Tesla’s entry, given the low penetration of passenger vehicles in the country, we see the entry of a global player as positive for driving motorisation rate, and overall industry demand. We have seen a similar trend in the SUV (sport utility vehicle) segment, which saw the highest number of model launches and competition recently. Entry of new models or new players has helped in driving the segment’s volume higher, not necessarily at the expense of incumbents,” mentions the EV report. 

India will produce 20 per cent of global passenger vehicles by FY27.

A large part of electric vehicles and Internal Combustion Engine (ICE) passenger vehicles will be produced by India, according to BNP Paribas. 

“The incremental production of passenger vehicles we are expecting India to be the fastest market and will add 7 per cent of the global market. By FY26, we are anticipating electric vehicle production as well but a large production will continue to be ICE,” added Kumar Rakesh.