Automaker Shock: 7 Hard Truths Behind India’s Sluggish EV Adoption and Global Bets
India is key to global automakers’ plans, but EV adoption remains low. Discover 7 shocking reasons behind this and what global giants are doing about it.
India has emerged as the third-largest automobile market in the world, overtaking Japan. As Moody’s Investors Service notes, this rapid ascent has drawn global automakers into the Indian electric vehicle (EV) arena. Yet, a paradox emerges—EV adoption remains slow, presenting challenges and opportunities alike.
India’s Strategic Importance for Global Automakers
India’s expanding urban landscape and growing middle class make it a strategic goldmine for vehicle manufacturers. Automakers like Hyundai, Maruti Suzuki, Tata Motors, and Mahindra & Mahindra are already investing billions in EV research and model launches.
According to Reuters, over a dozen new EVs are expected to hit the Indian market in 2025 alone.
7 Shocking Reasons Why India’s EV Adoption Is Still Lagging
Despite massive investments and innovation, EV penetration remains around just 2.5% of total passenger vehicle sales. Let’s uncover why.
1. High Purchase Costs
EVs remain 20–30% more expensive than ICE (Internal Combustion Engine) vehicles. Until battery costs fall, EVs will stay out of reach for average Indian consumers.
2. Inadequate Charging Infrastructure
According to the Bureau of Energy Efficiency (BEE), India has fewer than 10,000 public charging stations nationwide—a tiny fraction compared to what’s needed.
3. Low Awareness and Misinformation
A 2023 NITI Aayog study indicated that more than 40% of Indian consumers are still unaware of EV benefits, warranty coverages, and safety features.
4. Battery Safety Concerns
High-profile incidents of battery fires have led to safety concerns, especially in hot regions. India’s Ministry of Road Transport & Highways has since mandated stricter safety norms.
5. Financing and Insurance Gaps
EV buyers face limited loan options and higher insurance premiums, which further discourage adoption. Banks are still reluctant to consider EVs as viable long-term assets.
6. Poor Rural Penetration
As per The Times of India, Andhra Pradesh had just 1.85% EV adoption between 2019–2024, indicating weak uptake outside urban areas.
7. Range Anxiety
EV owners in India are still plagued by range anxiety, especially in tier-2 and tier-3 cities where charging stations are rare.
Government Action: The Push for EV Adoption
The Indian government is taking strong policy steps to close the EV adoption gap:
FAME II Scheme
Provides subsidies for electric two-wheelers, cars, and commercial vehicles.
Production-Linked Incentive (PLI) Scheme
Encourages domestic EV and battery manufacturing to cut import dependency.
Battery Swapping Policy Draft
Proposes infrastructure development for battery swap stations to address charging limitations.
Customs Duty Exemptions
Government has reduced duties on lithium-ion battery components to help lower overall EV costs.
Upcoming EV Launches in 2025
Here’s what to look forward to as automakers bet big on India:
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Tata Curvv EV – Stylish crossover with 400+ km range
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Mahindra XUV.e8 – Premium electric SUV with cutting-edge tech
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Hyundai Creta EV – Compact family SUV with fast-charging features
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Maruti Suzuki eVX – Maruti’s first global EV flagship
For more details on EV model pipelines, check out Autocar India.
India’s Role in the Global EV Landscape
Moody’s states that India will become critical to the global EV supply chain, serving as:
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A manufacturing hub for batteries and components
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A large-scale consumer market with immense growth potential
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A case study for EV adoption in other developing countries
What Can Accelerate EV Growth in India?
To hit the 30% EV target by 2030, India needs:
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Affordable EVs under ₹10 lakh
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Widespread fast-charging stations via PPP models
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Consumer education campaigns to debunk EV myths
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Better financing and resale ecosystem