ELECTRIC VEHICLE INDUSTRY AND OPPORTUNIES FOR INVESTORS

Abstract

The Indian automobile industry is one of the largest growing markets of the world and contributes highly in the country’s manufacturing facilities. Not only this, the automotive industry in India is further expected to pull up the share of manufacturing in India’s GDP to 25% by 2022 from 15% currently, with production of Electric Vehicles being new talk of the town. However, India’s electric vehicle industry is a newly born baby when compared with the other international markets such as US, China & Europe etc. But, a face change is definitely anticipated for India’s EV industry with major thrust given by the government.India is the second most populous country in the world with a population of 1.33 billion, and is growing at the rate of 1.1% year on year5. At this rate, it is expected to become the country with the largest population in the world in the next 20 years. Furthermore, the advent of industrialisation and commercialisation has spurred employment opportunities and resulted in spreading urbanisation. With this rapid urbanisation, India is expected to see 500 million people living in its cities by 20306. This, coupled with current and projected economic trends, is likely to lead to rising incomes in Indian households, thereby increase the demand for mobility. The automobile industry in India is the world’s fourth largest and is expected to become the third largest by 2021.

The industry accounts for 7.1% of India’s Gross Domestic Product (GDP) and the Automotive Mission Plan 2016-2026 of the Government of India aims to raise this to 12% The Indian automotive industry (including component manufacturing) is expected to grow at a compounded annual growth rate of 5.9% and reach INR16.16-18.18 trillion (US$251.4-282.8 billion) by 2026, thereby becoming the fastest growing industry in the country.