The Indian EV industry witnessed a dip in funding in 2024, dropping to $586 million from $808 million in 2023. However, the number of deals closed remained steady at 44. Subsidies also saw changes with the introduction of the PM E-Drive Scheme, which gradually replaces the FAME-II program. Under this scheme, subsidies for electric two-wheelers are now based on battery power, with a fixed rate of? 5,000 per kilowatt-hour (kWh) in the rst year, capped at Rs 10,000. There was a dip in overall sales growth as well in terms of percentage. EV sales in 2024 grew to over 1.9 million units—a 24.5% increase from 1.5 million units in 2023. However, this growth slowed compared to the 50% increase between 2022 and 2023, according to government data from the Vahan portal. However, the industry seems quite positive for the year ahead. Here’s what the industry players told ET.
Industry Insights: Expectations for 2025
Vaibhav Pratap Singh, Executive Director, Climate & Sustainability Initiative (CSI)
On EV sector:
“EVs in India, across various categories – especially within the 2Ws and 3Ws, have become increasingly affordable for consumers due to government support. This support includes a reduced GST of 5% compared to 28% or more for internal combustion engine (ICE) vehicles, lower RTO charges, and subsidies such as the PM-EDRIVE scheme, all driving up their adoption in the last 2 to 3 years.
The trend of rising EV adoption is expected to continue into 2025, especially as OEMs expand their product offerings in the four-wheeler segment. This expansion is anticipated to lead to greater market penetration for EVs in this category. Furthermore, with the decline in battery costs, EVs are likely to become more competitively priced across all categories on an ex-factory basis, facilitating deeper market penetration in the coming years.”
On Renewable Energy sector:
“In the RE segment, beyond the ongoing focus on meeting the unspoken target of meeting 50 GW in auctions, the PM Surya Ghar Yojana is expected to continue its push into the distributed rooftop solar segment, with potentially higher deployments than in 2024. One of the most significant drivers for RE growth in the country in the coming years is likely to be the declining cost of battery storage which was the poster of performance with ever-lower bids during 2024. This will make hybrid and rm RE capacities more attractive and competitive with former capacities like coal in most technical and economic aspects in the coming years and decades.”
Originally Published in The Economic Times (Online)
