Kotak: Merely 5% of Indian cars will be electric by 2030

Earlier this month, the Niti Aayog put forth a proposal stating that only electric vehicles (EVs) should be sold in India after 2030. Mandating the sale of only electric 2-wheelers by 2025 and banning the sales of conventional motorcycles up to 150cc has also been proposed. According to Kotak, inspite of the government's push to promote electric mobility, only 5% of passenger vehicles are likely to be electric by 2030.

EV adoption among the taxi segment is expected to be higher compared to passenger cars. It is said that due to the higher usage of cars, EVs would be more feasible for taxi operators. The taxi operator could break even his upfront capital cost after 55,000 km in 1.8 years, considering he drives 30,000 km per year.

With prices of cars expected to increase post BS-VI, the breakeven for EVs versus petrol cars is expected to reduce to 22 years with government incentives and 26.5 years without government incentives. Assuming that the cost of lithium-ion batteries reduces to US$ 100 per kWh by 2030 and also assuming the price of petrol cars increases by 20% by that time, the breakeven for EVs versus petrol cars will only reduce to 5 years.

Another factor that's hampering the growth of EVs is the lack of charging infrastructure. Also, the time required to charge an 11 kWh battery is claimed to be around 8-10 hours, which isn't practical. The government would need to install fast chargers to improve the charging infrastructure.