2021 turned out to be a great year for the Electric Vehicle segment in India. The registrations of Electric Vehicles (EVs) in India more than double in 2021. Battery charging infrastructure has started to expand, although it is not pervasive. High fuel prices also influenced people to consider the switch to EVs. What’s in store for 2022? In this post, we will reveal what we think the Electric Vehicle segment is going to experience in 2022.
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The EV Data:
The year 2020, struck by pandemic, saw EV registrations go down by 26% to 119,656. After all, who thinks of owning a vehicle when the lockdown and restrictions are in force? The investments in Electric Vehicles also went down to Rs. 1,546 crore in 2020. One year on, these numbers more than doubled due to strong demand. The number of EV registrations for instance more than doubled to achieve figures of 260,436 (as of November 2021). The month of November 2021 recorded a whopping 42,067 registrations of Electric Vehicles. The investment in EVs also increased by more than 100% to Rs. 3,298 crore till Q3 of 2021. Who’s leading the charge? It’s all the startups and first-generation companies leading the bandwagon.
The EV Trigger?
Without any doubt, the announcement of the Ola electric scooter has brought much-needed momentum to the Electric Vehicle sector in India. Tata Motors is leading the four-wheeler EV segment in India. Nexon EV is still the top-selling electric car in Inda. Tata launched Tigor EV in 2021. Ola though, had a wonderful reception after the announcement, was marred by delivery delays owing to chip shortages. A total of 126,813 electric scooters were sold in India till November 2021. This is 4.6 times the number of electric scooters sold till the same period in 2020! A total of 10,0001 Four-wheelers were sold till November 2021 compared to 3,120 sold till November 2020.
Market Share of Electric Vehicles
Hero electric leads the market in two-wheeler electric vehicles with a share of 15.2%, followed by Okinawa and Ather. In 2022, Bajaj & TVS motors are likely to expand their EV portfolio. Tata motors lead the pack in the four-wheeler EV segment followed by Mahindra & Mahindra and MG Motor India.
Looking Forward – The Price Trend
The prices of EV batteries fell by 9% in 2021. If you consider the last decade, the fall in the prices of EV batteries is starker as they fell by more than 80%. As the prices of Li-Ion (lithium-ion) batteries make up 40% of the price of an electric vehicle, it is natural that the prices of EVs went down with the slump in the prices of batteries. However, the shortage of raw materials which include metals like lithium, nickel, and cobalt is pushing the prices of EV batteries. The year 2022, in all possibilities, may not see the prices of EVs coming down. We expect the demand for the EVs to spike up significantly with finally Ola bikes making it to the roads and other manufacturers embracing the technology.
Challenges
Charging infrastructure is still very little. As of now, only 452 charging stations are operating under the FAME scheme. This is soon going to change as the government and private players push for gaining the market share. The charging infrastructure provision in apartments will drive the urban sales of EVs in 2022.