India's EV Adoption in Reverse?

Indian Heavy Industries Minister H.D. Kumaraswamy said Monday that he was not expecting interest from American EV maker Tesla to start producing cars in the country. Government officials were outlining guidelines promoting EV manufacturing in India earlier this week when the comment was made. Kumaraswamy said that Mercedes Benz, Skoda-Volkswagen, Hyundai and Kia had shown interest in building cars in India and that Tesla would be opening two showrooms to sell imported cars in the country.

Accoding to BBC reporting, analysts believe the Indian EV market may not be mature enough for a large Tesla presence due to low sales of electric vehicles and very cheap local alternatives. Government data from the Vahan Dashboard aggregated by Clean Mobility Shift shows that few four-wheeled electric vehicles were newly registered in India in 2024. While the number of new registrations almost doubled since 2022, the South Asian nation's shift to e-mobility is still mainly focused on two-wheelers like mopeds as well as e-rickshaws and other three-wheelers, which comprised 50 and 45 percent, respectively, of the total EV sales in the country this past year. While e-mobility penetration was at 5.6 percent last year, it was at just around 1.8 percent for cars.

In 2024, electric vehicle registrations sunk slightly, from a market share of 6.3 percent in 2023. At the same time, government subsidies for EVs decreased, according to Business Standard. From a global perspective, China is still the standard bearer of the ongoing push for fleet electrification. IEA data shows that 50 percent of all new cars sold in the East Asian country in 2024 were electric. In Europe, electric vehicles had a market share of around 20 percent of all newly registered vehicles, as governmental support also waned in the region.