India's EV ecosystem is growing, but remains too underdeveloped to cushion a major oil supply shock.
Key Points
- India's EV adoption rate is significantly lower than regional counterparts, with EVs making up only 4.1 per cent of passenger vehicle sales by 2025 end, compared to 50 per cent in China and 37.9 per cent in Vietnam.
- Charging infrastructure remains a major bottleneck in India, with approximately 84 EVs per public charger, a stark contrast to 10 in China and Vietnam, and 19.1 in Thailand.
- Despite strong policy support, including subsidies accounting for about 15 per cent of EV factory prices, India imposes high tariffs on EV imports at 103.8 per cent.
- Domestic production of electric passenger vehicles in India has seen sharp growth, increasing from 3,304 units in 2019-20 to 62,279 in 2022-23.
The ongoing conflict in West Asia has renewed concerns over oil supply disruptions, pushing countries to reassess how quickly they can rely on electric mobility.
For India, this raises a critical question: Is its electric vehicle (EV) ecosystem -- spanning adoption, infrastructure, and domestic capacity -- robust enough to withstand a prolonged energy shock, especially when compared with faster-moving Asian peers?
EV Adoption and Regional Comparison
India's EV adoption remains significantly behind regional counterparts. EVs accounted for just 4.1 per cent of total passenger vehicle sales by 2025 end, far below 50 per cent in China and 37.9 per cent in Vietnam.(Chart 1)
There has been strong growth in EV sales across Asian countries over the past few years, with most markets witnessing sharp expansions between 2021 and 2024. However, FY25 saw a slowdown, with India recording a contraction of 22.22 per cent.(Chart 2)
Infrastructure Challenges and Policy Support
Charging infrastructure remains a major constraint. India has around 84 EVs per public charger, compared to 10 in China and Vietnam, and 19.1 in Thailand. This sharp gap indicates that even if EV demand rises due to high fuel prices, the supporting infrastructure may not keep pace.(Chart 3)
Policy support, however, is relatively strong. Subsidies account for about 15 per cent of EV factory prices in India, slightly higher than China's 13 per cent.(Chart 4)
At the same time, India imposes a higher tariff on EV imports than peers — 103.8 per cent, compared to 65.8 per cent in Thailand and 51.9 per cent in Vietnam.(Chart 5)
Domestic Production Growth
On the supply side, domestic production has grown sharply. Electric passenger vehicle output increased from 3,304 units in 2019-20 to 62,279 in 2022-23, with consistently high year-on-year growth.(Chart 6)
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Feature Presentation: Rajesh Alva/Rediff
