Over the past 200 years, the world has witnessed some amazing transformations. And talking about transformation, one industry that has revolutionized the modern world is Automobile.
It all started in the year 1901 when Mercedes received the credit of being the 1st modern motorcar. Before that, the major form of transportation was horse. Later, Mr Henry Ford innovated the mass production technique for car manufacturing. Since then, the US, Germany and Japan have been the biggest players in Automobile industry. In just 100 years, the car industry has innovated leaps and bounds. But, that was not the end!
The 19th century cars used an “Internal Combustion Engine” or ICT that required petrol or diesel. But there was an alternate technology which used “electricity” powered by a battery. Although, due to many reasons, electric cars never became mainstream in the 19th century. Until, Tesla introduced its car “Roadster” in 2008.
With that, Tesla began a new revolution in Automobile industry. This could also be called as one of the biggest revolutions of the 21st century. I am talking about the rise of the Electric Vehicle industry.
This is the 1st part of the article where I have explored the global EV industry - current state of EV market, future growth prospects and key players in global EV industry.
Then I have analyzed the Indian EV market - The current state of EV market in India, major challenges, key initiatives to overcome the challenges and the future growth prospects.
In the 2nd part of the article, I have analyzed the Key players in Indian EV market and their growth prospects. So lets get started!
Global EV marketAfter the US, Japan and Germany dominated the petrol/diesel car market all over the world, everyone is in a race to capture the Electric vehicle market to rule the 21st century automobile industry.
In Spite of such huge growth, only 2.5% of the world’s passenger vehicles run on electricity. So you can imagine the kind of growth prospects all over the world.
Major Global Markets
There are 3 major global markets that represent 94% of total EV sales: It is US, Europe and China.
If I ask you, which is the biggest global market of EV, you would probably answer US, right?
Well, you would be surprised to know that China is the biggest global market of EV all over the world with around 1.2 Million units of EV sold in FY19 which is almost half of total EV sales all over the world. It is followed with Europe with 0.6 million EV sales and the US is at 3rd position with 0.3 million EV sales.
In terms of market share, EV in China accounts for just 5% of total vehicles in FY19, EV in Europe has 3% of total market share and the US EV market contributes 2% in total market share. In other words, we can say that it is just the beginning of the EV market.
Future Growth Prospects:
As per report from McKinsey, the EV market is going to explode in the next 10 years.
EV market in China is expected to rise from 7% in 2020 to 37%-52% by 2030. European market is expected to increase from 7% in 2020 to 33%-44% by 2030 and the US market is expected to increase from 3% in 2020 to 17%-36% by 2030.
It means, in the next 10 years, China market is expected to grow around 5-7 times, European market is expected to grow 5-6 times and US market is expected to grow 6-12 times.
That is just crazy growth numbers!
Now let us understand the key growth drivers in global market:
EV Market in IndiaEV represent less than 1% of the total automobile market in India. India is predominantly a 2-wheeler market with more than 80 per cent of ICE sales coming from 2 wheelers. The penetration of EVs in the four-wheelers (4W) segment has remained extremely low at ~0.1 per cent.
Major Challenges and Key Initiatives:
Policymakers in India have been actively pushing. EV adoption in recent years. Government think-tank NITI Aayog has specified that Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAMEII) and other policies supporting electric mobility are expected to push EV sales penetration to 30 per cent for private cars, 70 per cent for commercial cars, 40 per cent for buses and 80 per cent for two wheelers (2Ws) and three wheelers (3Ws) by 2030.
Based on an analysis of key enablers for EVs, KPMG in India expects 25 to 35 per cent 2W penetration, and 65 to 75 per cent in 3Ws by 2030. However, 4W passenger vehicle (PV) electrification is expected to lag, with 10 to 15 per cent penetration in the personal segment and 20 to 30 per cent in the commercial one by 2030. About 10 to 12 per cent of the overall market for buses is expected to be electrified by 2030.
With this, we have come to the end of part 1 of the article.
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