India's electric vehicle EV market is expected to grow at a compounded annual growth rate of 90 per cent in the next decade to reach $150 billion by 2030, according to a report by consulting firm RBSA Advisors. The Indian EV market is currently in its infancy and is expected to grow at a CAGR of 90 per cent from 2021 to 2030. In terms of penetration, EV sales account for barely 1.3 per cent of total vehicle sales in India during the 20 -- 21 years. The market is growing rapidly and is expected to be worth more. India is poised to save nearly one giga-tonne of carbon dioxide emissions by 2030 due to India's shift to shared, electric and connected mobility.
The report states that India's EV technology evolution requires significant investment in R&D and product development, both on the automobile platforms and battery charging technology. The collective investment by 2 W, 3 W, 4 W, EV component makers and last mile delivery companies was recorded at Rs 25,000 crore during January 2021. The demand incentives provided under FAME II, the launch of state policies, rising fuel prices, tightening emissions laws and increasing awareness of the green environment are few factors that make the sector attractive to larger automobile players and financial investors, as per the report.
The rise in demand for EVs has attracted overseas investments into the sector, due to a conducive regulatory framework. In a new funding round, Ola electric raised $200 million from a clutch of investors, valuing the company at more than $5 billion. In early October this year, ADQ and TPG Rise Climate agreed to invest close to $1 billion in the EV subsidiary of Tata Motors. Electric scooter rental start-up Bounce is reportedly investing around $100 million around 742 crore over the next 12 months in the manufacturing of e-scooters and expanding the battery swapping infrastructure.
In the coming days,EV sales are likely to increase exponentially. With the only certainty over the future price of diesel petrol being that they are unlikely to reduce soon, more choices are made available to the consumer in terms of electric vehicles and initiatives by the Central and State governments, which is expected to attract huge investments as well. RBSA Advisors said that every of the last three years has seen double digit deals and we expect this trend to continue.
Many start-ups have raised an initial round of funding over the last three years, but they are likely to go in for stabilisation and need funding, hence they are likely to need funding. With the sector gaining critical mass and the traditional auto players looking at the sector with avid interest, we are likely to see many more deals in the sector over the next few years. A cumulative investment of nearly $200 billion will be needed if India is to meet its 2030 target as far as e mobility is concerned, according to Shah.
India needs around 400,000 charging stations to meet the requirement for two million EV that could potentially be on its roads by the year 2026, according to the report. An integrated work approach is required between the private sector and the public sector to cater to this huge demand. PSUs have been active in this regard in terms of providing the much-needed charging infrastructure.
Globally, despite the COVID 19 pandemic related worldwide downturn in car sales, wherein global car sales dropped by 16 per cent in 2020, strong demand and momentum was seen in the global EV market where around 3 million electric cars were sold. CYH 1 - 21 sales were dominated by Mainland China and Europe. China saw 1.1 million vehicles sold, while Europe was behind by just 10,000.
The research report concluded by saying that EVs are now the vehicles of the future and have the ability to power us ahead.