For the longest time, the electric vehicle (EV) industry in India was considered a sunrise sector – its potential is yet to be fully tapped. In 2024, EVs enter the mainstream.
This year, Ola Electric went public and held its dominant position in the two-wheeler EV segment, albeit without a hiccup; MG launched the Windsor EV with a first-of-its-kind battery-as-a-service offering to ease the burden of the high cost of EV batteries on consumers; And companies across the spectrum, including ecommerce giants like Flipkart and mobility startups like Rapido, have expanded the use of EVs in their operations.
More EVs than ever are zooming on Indian roads. According to the National Vehicle Registry, 1.8 million EVs have been sold by November this year. However, the year has also been a test drive for many EV companies, with the government withdrawing subsidies that made these vehicles a cost-efficient alternative to ICE (Internal Combustion Engine) vehicles.
The third phase of FAME (Accelerated Adoption and Manufacturing of Electric Vehicles) plan is nowhere to be seen. Instead, the government introduced the PM E-DRIVE (PM Electric Drive Revolution in Innovative Vehicle Enhancement) scheme this year, but it focused more on commercial vehicles such as electric buses, electric ambulances and trucks rather than personal commuter vehicles.
E-bikes also ran into regulatory trouble in Karnataka. The state government withdrew the Karnataka electric bike taxi scheme in March due to lack of enthusiastic response from ride-hailing services and misuse of the policy by certain app-based aggregators. But, with bike taxi aggregators like Rapido offering bike taxis, not electric bikes, most aggregators were able to slip away.
India has set an ambitious target of 30% EV penetration by 2030 as part of the EV30@30 campaign. This year, we took an important step towards achieving that.
EV mobility accelerates
In August, Bhavish Aggarwal-led Ola Electric was listed on public shares. At the time of listing, one of the sticking points was profitability. The company’s bottom line continues to be in the red.
For the July-September quarter, it reported a net loss of Rs 495 crore as against Rs 524 crore in the year-ago period. However, its losses widened quarter-on-quarter to Rs 324 crore in Q1 FY25.
While plagued by consumer complaints, show-cause notices from regulators, and social media controversies, the company’s listing was seen as a positive step in the ecosystem, marking the listing of the first fully electric automobile startup. Next year, its competitor, Aether Energy, will also go public and has submitted its draft documents to the Securities and Exchange Board of India.
In 2025, both are expected to expand beyond electric scooters and roll out their electric motorcycles, targeting a new set of customers. There are a few players in the motorcycle ecosystem, including UltraViolet and relatively new startup Oben Electric. However, TVS and Bajaj, two-wheeler industry veterans, have already captured a large share of the market, giving both Ola Electric and Aether a run for their money. Interestingly, Bajaj is also an investor in Aether Electric.
Market share of EV companies by November, 2024
While Ola Electric created waves on the public stock exchange, Ola Group’s ride-hailing arm Ola Consumer tried to regain some lost ground in the cab aggregation segment as relatively new players like Rapido and Namma Yatri expanded beyond their comfort zone. Made significant progress in cab-hailing.
Ola Consumer rolled out its customer loyalty program called Ola Coin and reintroduced the ride-sharing service to its platform after it was shut down during COVID-19.
At the same time, EV cab aggregator BluSmart is doubling down on its premium offerings with plans to expand its fleet. The company’s asset leasing initiative, which allows partners to buy electric cars and lease them to the company, has crossed Rs 100 crore in book value. The company also reported a 77% year-on-year growth in its gross merchandise value in the first half of FY25, driven by increased demand for its EV cabs.
Challenges plaguing the EV ecosystem
High costs of vehicle manufacturing, low profit margins, and installation of charging infrastructure are key points for EV adoption.
Although the ecosystem has spawned more startups to fill the gap in India’s EV charging infrastructure, and the government has introduced policies such as PM E-DRIVE and expansion of the Electric Mobility Promotion Scheme (EMPS), the EV infrastructure landscape is far from over. And range concerns have yet to be convincingly addressed.
According to a report by KPMG and CIIs, one of the major reasons restraining the growth of charging stations is unfavorable unit economics. “Charging stations require huge investment. It is estimated to cost Rs 15 to 20 lakh to install a 60 kW charging station with two charging guns,” the report said.
At the same time, operators are also discouraged by average utilization in the low single digits, which has curbed revenue generation.
In addition, EV chargers do not follow a uniform standard, which comes with its own set of problems as OEMs continue to produce models with different standards, resulting in inconsistent hardware.
One way to address range concerns is to extend battery life. This year Ola Electric has also developed battery infrastructure with assembling homegrown 4860 lithium-ion battery cells and extensive use of battery swapping technology.
The government has also made efforts to ensure easy procurement of critical metals for EV battery development. In Budget 2024-25, Finance Minister Nirmala Sitharaman proposed to waive import duties on lithium and other critical metals.
Driving into 2025
According to the FICCI EV Public Charging Infrastructure Roadmap 2030 report, to achieve the target of 30% electrification of vehicles by 2030, India will need to spend Rs 16,000 crore in capital expenditure to meet public hanging demands.
The report also notes that financial viability for public charging stations in India remains low at less than 2% utilization, and to achieve profitability and scalability, the country should target 8-10% utilization by 2030.
However, companies are gearing up to solve the problem at hand. CHARGE ZONE, a Vadodara-based charging startup, plans to invest $360 million to set up 25 new supercharging stations and aims to reach 500 stations nationwide.
“This year has seen transformative changes in the EV ecosystem, driven by rapid advances in charging infrastructure, innovative energy solutions, and a focus on reducing range anxiety. The integration of smart charging technologies with vehicle-to-grid capabilities and energy management systems will change how EV owners interact with the grid. It’s not just about more charging points; it’s about making them efficient, accessible, and powered by solar energy, too are playing a role, especially in Tier II and III cities where adoption is on the rise,” said Akshay Shekhar, CEO and Co-Founder, Kazam. The startup operates a network of charging stations across the country.
Looking ahead, 2025 is expected to be a critical year for EVs. In the passenger vehicle category, companies like Mahindra & Mahindra, Tata Motors, Hyundai and Maruthi Suzuki are expected to launch new models. Meanwhile, Ola Electric and Ather have also planned their motorcycle lines. Yulu also plans to launch a new electric scooter targeting the ecommerce segment.