India's Electric Vehicle Value Chain Likely to Generate Between $76 and $100 Billion by 2030

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by KnowESG
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The revenue pool for India's electric vehicle (EV) value chain is estimated to reach USD 76–100 billion by 2030. According to an analysis by Bain & Company, private equity and venture capital firms have already invested USD 3.7 billion in the domestic EV market over the last three years. This number is expected to increase significantly as the industry grows.

According to the report, the domestic automotive market is prepared for rapid EV growth due to factors such as government incentives, improved cost competitiveness, OEM investment in the industry, and enhanced customer readiness and awareness.

According to the estimate, EVs would account for 35–40% of all vehicles sold in India by 2030, up from 2% in 2022. This amounts to 14 million to 16 million new EVs sold each year.

It also stated that, due to a variety of factors, the electric two- and three-wheeler segments will be the forerunners in the adoption of these vehicles, with 40–45 per cent penetration by 2030.

The 4W electric passenger vehicle (PV) market, which comprises passenger cars, utility vehicles, and multipurpose vans, is likely to lag behind the adoption curve. This segment is still predicted to account for 15-20% of total 4W PV sales by the end of this decade, according to the report.

"Contributors to the auto revenue and profit pools in 2030 will be significantly different from those in today's automotive industry. While 40–50 per cent of this revenue pool will come from the auto OEMs, it will be significantly altered in nature and composition.

"New business opportunities such as battery (13 per cent), charging (8 per cent) and mobility (6 per cent) will emerge and scale," said Deepak Jain, a partner at Bain & Company.

Interestingly, despite relatively lower penetration and volumes, four-wheeler electric PVs will account for around 41% of the income pool, followed closely by two-wheelers at 33%.

Electric buses will likewise have a similar penetration curve to PVs by 2030, driven in large part by state transport initiatives focused on fleet electrification for intra-city transport, it noted.

"While we believe that deep EV penetration in India by 2030 is a realistic scenario, five key areas need to align to make it a reality. First, global battery prices need to fall 20-30 per cent over the long term to drive competitiveness; second, OEMs need to build a sustainable EV-specific business model for the Indian market.

"Third, a continued focus on safety, especially for batteries; fourth, continued regulatory and incentive support from the government; and fifth, a significant expansion of India's charging infrastructure," said Mihir Sampat, a partner at Bain & Company.

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