Examining the trends shaping India’s electric vehicle (EV) transition

Examining the trends shaping India’s electric vehicle (EV) transition

A successful transition to electric vehicles will have profound implications for India and its 1.39 billion citizens – from improved living standards to better health and more affordable transportation.

More information

Our team will be happy to answer
any question about Pictet’s services
offering for private clients.


Imagine a cloud of pollution so dense and covering such a vast geographic area that it can be seen from space. Underneath that cloud, you’ll find the Indian capital of New Delhi with its low air quality.

Air pollution, responsible for the deaths of more than 2 million people each year in India, is one of the key drivers behind the growth of the country’s electric vehicle (EV) sector. The Indian government has identified the replacement of internal combustion engine (ICE) vehicles with EVs as the key to combatting this pollution.

The authorities have set a target that will see EVs account for 30% of all sales of private cars, 40% of buses, and 80% of two- and three-wheelers by 2030. Moreover, at the COP26 summit in November 2021, India signed a pledge to work towards selling only emission-free vehicles by 2040.1

India’s EV journey at an inflection point

The backdrop to these ambitious targets is complex, with numerous factors fuelling demand. As of March 2022, the total number of EVs on India’s roads exceeded 1 million, according to a report by KPMG, which expects that number to grow to 45–50 million by 2050. KPMG’s optimism is based on “favourable factors on the demand, supply and regulatory front”. The report adds that while “the EV growth story is currently led by two-wheelers (2W) and three-wheelers (3W) segments, the four-wheeler (4W) segment is showing enormous promise, with several new model launches expected over the next two years”.2

play video

According to Sam Chan, Equity Research Analyst at Pictet Wealth Management, the starting point is the bevy of incentives and schemes the government is promoting to aid and accelerate the transition. “Right now, government incentives are very encouraging, and that is helping to drive the electrification story”, Chan says.

The government’s flagship Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, launched in 2015, is driving the expansion of EVs in India. FAME II, for example, launched in 2019, offers subsidies to buyers and is financing the development of charging infrastructure.3

Local-authority initiatives include the Delhi Electric Vehicle Policy, launched in August 2020. Vehicle emissions are the leading cause of the smog that envelops the nation’s capital each winter as heavy air traps smoke from burning crop residues in neighbouring states, along with vehicle emissions and construction dust.

The new measures aim to make New Delhi “one of the world’s top cities in terms of EV adoption”, with 25% of all new vehicles on the city’s roads to be EVs by 2024.4 The policy includes incentives for e-bikes and e-rickshaws, not just 4W vehicles. The government has announced that charging stations will offer low-cost charging for these smaller EVs.5

Unique demands on infrastructure and cost

The relatively high cost of EVs is a key barrier to the development of the market. The average price of an EV in New Delhi is roughly $20,000. In contrast, an entry-level fossil-fuel car can be bought for less than $5,000, just above the capital’s average per capita income of $4,800, says Time magazine.6

The national government and individual states offer various incentives for purchasing EVs – and, once bought, the vehicles offer considerable savings in running costs compared with an ICE vehicle. The cost of charging a 2W EV is about 15–20% of the cost of fuel for an ICE vehicle, Anubhav Kapoor, the director of legal affairs at Ford India, was recently quoted as saying in the India Business Law Journal.7

Chan adds, “If you think about the total cost of ownership, given the national and state government subsidies, it is certainly much more attractive right now for a consumer to buy an electric two-wheeler.”

However, various other barriers – including a lack of charging stations – need to be overcome if EV ownership is to take off. By the end of October 2022, there were just 1,700 public charging stations in operation across the country – or one public charging station for every 135 EVs. In neighbouring China – arguably further along in its EV transition – the number jumps to one for every six.8

Chan points out that a well-developed – and versatile – charging infrastructure is critical to enable widespread EV adoption, given India’s tendency towards 2W and 3W vehicles.

Fortunately, there has been “a strong government push to improve penetration of the charging network and increasing interest from public and private players, which is likely to bring in the much-required investments in this space”, according to The Economic Times of India.10

Other barriers to the development of the EV market – identified in a report by the International Institute for Sustainable Development11 – include “supply chain shortages, lack of complementarity between state and federal policies, and skill gaps in the labor force”.

Foreign investment required

The report – a joint effort by Columbia University’s Center on Global Energy Policy, the International Institute for Sustainable Development, the Indian Council for Research on International Economic Relations, and Invest India – adds that:

“For India to keep pace with its [EV] ambitions, however, it will need substantially more foreign direct investment. Presently, there is a major gap between the investment levels in EVs and batteries required to remain aligned with net-zeroscenarios and existing investment levels. But there is also strong optimism, including among investors, around India’s EVs sector and its growth potential.”

Mass adoption and the consumer experience

While the benefits of an EV transport future – from cleaner air to cheaper and more efficient forms of travel – may seem like an easy sell to consumers, crafting the tangible, day-to-day experience of owning an EV will fall to those original equipment manufacturers (OEMs) that see the benefit of electrifying their products for the market.

As these OEMs take a once-in-multiple-generations leap forward in how their vehicles are powered, and as the 4W EV market develops, Chan says that – as in China – manufacturers will focus on offering the most advanced technology in their products to attract buyers.

“The newest EVs”, he says, “offer a completely different experience from traditional cars, packed with connected systems offering infotainment, touchscreen panels, in-car sensors and the latest safety features.”

While there will undoubtedly be winners if the EV market develops as expected in India, identifying the sectors that are most likely to benefit from the next few decades of growth will prove a challenge.



[1] https://www.gov.uk/government/publications/cop26-declaration-zero-emission-cars-and-vans/cop26-declaration-on-accelerating-the-transition-to-100-zero-emission-cars-and-vans
[2] https://assets.kpmg/content/dam/kpmg/in/pdf/2022/08/electric-vehicle-charging-next-big-opportunity-infrastructure.pdf
[3] https://www.iea.org/policies/12517-faster-adoption-and-manufacturing-of-hybrid-and-electric-vehicles-fame-scheme-phase-i-ii
[4] https://ev.delhi.gov.in/vision-mission#:~:text=The%20Delhi%20EV%20Policy%20aims,battery%2Doperated%20vehicles%20by%202024.
[5] http://timesofindia.indiatimes.com/articleshow/93243709.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppsthttp://timesofindia.indiatimes.com/articleshow/93243709.cms
[6] https://time.com/6225935/india-pollution-electric-vehicles/
[7] https://law.asia/indian-ev-regulations/
[8] https://www.financialexpress.com/express-mobility/indian-electric-vehicle-charging-stations-and-the-path-ahead/2759040/
[9] https://assets.kpmg/content/dam/kpmg/in/pdf/2022/08/electric-vehicle-charging-next-big-opportunity-infrastructure.pdf
[10] https://economictimes.indiatimes.com/industry/renewables/electric-vehicles-on-indian-roads-to-touch-5cr-by-2030-big-opportunity-for-ev-charging-playerskpmg/articleshow/93879916.cms
[11] https://www.iisd.org/system/files/2022-08/investor-perspectives-growth-indian-electric-vehicle-ecosystem.pdf

More information

Contact for Singapore

Sharon Shou is CEO and Head of South Asia at Pictet Wealth Management. Sharon and her team will be happy to answer any questions about Pictet’s service offering for private clients.

Sharon Chou, Chief Executive Officer of Banque Pictet & Cie (Asia) Ltd and Pictet Wealth Management South Asia.


This document is not directed to, or intended for distribution, publication to or use by, persons who are not accredited investors, expert investors or institutional investors as defined in section 4A of the Securities and Futures Act. 2001 (“SFA”) or any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or would subject BPCAL and any of its affiliates or related corporations to any prospectus or registration requirements.
BPCAL is a full licenced bank regulated by the Monetary Authority of Singapore (“MAS”) under the Banking Act Cap. 50 of Singapore, an exempt financial adviser under the Financial Advisers Act Cap. 110 of Singapore (“FAA”) and an exempt capital markets licence holder under the SFA.
Please contact BPCAL in Singapore in respect of any matters arising from, or in connection with this document.
The value of an investment can go down as well as up, and investors may not get back the full amount invested. Nothing in this document shall constitute financial, investment or legal advice. The information, tools and material presented in this document are provided for reference only and are not to be used or considered as an offer, an invitation to offer or solicitation to buy, sell or subscribe for nor as advice or recommendation with respect to any investment or financial instruments. This document is intended for general circulation and it is not directed at any particular person. This document doesnot have regard to the specific investment objectives, financial situation and/or the particular needs of any recipient of this document.
All rights reserved. Copyright 2022
Please confirm your profile
Please confirm your profile to continue
Confirm your selection
By clicking on “Continue”, you acknowledge that you will be redirected to the local website you selected for services available in your region. Please consult the legal notice for detailed local legal requirements applicable to your country. Or you may pursue your current visit by clicking on the “Cancel” button.

Welcome to Pictet

Looks like you are here: {{CountryName}}. Would you like to change your location?