For the longest time, the electric vehicle (EV) industry in India was considered a sunrise sector—its potential yet to be fully harnessed. In 2024, EVs entered the mainstream.
This year, Ola Electric went public and held its dominant position in the two-wheeler EV segment, albeit not without hiccups; MG launched 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 from across the spectrum, including ecommerce giants like Flipkart and mobility startups like Rapido, expanded the use of EVs in their operations.
More EVs are zooming on Indian roads than ever before. According to the national vehicle registry Vahan, 1.8 million EVs were sold this year till November. However, the year has also been a test drive for many EV companies, with the government rolling back subsidies that had made these vehicles a cost-efficient alternative to ICE (internal combustion engine) vehicles.
The third phase of FAME (Faster Adoption and Manufacturing of Electric Vehicles) Scheme seems to be nowhere in sight. Instead, the government this year rolled out the PM E-DRIVE (PM Electric Drive Revolution in Innovative Vehicle Enhancement) scheme but it focuses more on commercial vehicles like electric buses, electric ambulances and trucks instead of personal commute vehicles.
E-bikes also ran into regulatory trouble in Karnataka. The state government withdrew the Karnataka Electric Bike Taxi Scheme in March citing a lack of encouraging response from ride-hailing services and misuse of the policy by certain app-based aggregators. But, with bike taxi aggregators such as Rapido offering bike taxis and not electric bikes, the majority of the aggregators were able to slip through.
India has set the ambitious target of 30% EV penetration by 2030 as part of the EV30@30 campaign. This year, we took significant steps to achieve that.
EV mobility speeds up
In August, Bhavish Aggarwal-led Ola Electric was listed on the public bourses. At the time of listing, one of the sticky points was profitability. The company’s bottom line continues to be in red.
For the July-September quarter, it reported a net loss of Rs 495 crore down from Rs 524 crore in the year-ago period. However, its loss widened quarter-on-quarter from Rs 324 crore in Q1 FY25.
While plagued with consumer complaints, show cause notices from regulators, and social media feuds, the company’s listing was largely viewed as a positive step in the ecosystem, marking the listing of the first fully electric automobile startup. Next year, its competitor, Ather Energy, will also head to the public markets and has filed its draft papers with the Securities and Exchange Board of India.
In 2025, both are expected to expand beyond electric scooters and roll out their electric motorcycles, eyeing a new set of customer base. The motorcycle ecosystem has a few players including Ultraviolette and a relatively new startup, Oben Electric. However, TVS and Bajaj, legacy companies in the two-wheeler industry, have already captured a big piece of the market, giving both Ola Electric and Ather a run for their money. Interestingly, Bajaj is also an investor in Ather Electric.
Market share of EV companies as of November, 2024
As Ola Electric made waves on public stock exchanges, Ola Consumer, the ride-hailing arm of the Ola Group, attempted to capture back some lost ground in the cab aggregation segment as relatively new players like Rapido and Namma Yatri expanded beyond their comfort zone and made significant strides in cab-hailing.
Ola Consumer rolled out its customer loyalty programme called Ola Coin and reintroduced the ride-sharing service on its platform after it had it 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 purchase electric cars and lease them to the company, surpassed Rs 100 crore in book value. The company also reported a 77% YoY rise in its gross merchandise value to Rs 275 crore as demand for its EV cabs rose in the first half of FY25.
Challenges plaguing the EV ecosystem
High costs of manufacturing vehicles, thin profit margins, and establishing a charging infrastructure have been key sticking points in EV adoption.
Though the ecosystem has birthed more startups to fill the gap in India’s EV charging infrastructure, and the government has rolled out policies like PM E-DRIVE and the extension of the Electric Mobility Promotion Scheme (EMPS), the EV infrastructure landscape is far from perfect and is yet to convincingly address range anxiety.
One of the major reasons stunting the growth of charging stations is unfavourable unit economics, according to a report by KPMG and CIIs. “Charging stations require significant investment. It is estimated that Rs 15-20 lakh are required to set up a 60-kilowatt charging station with two charging guns,” the report says.
At the same time, operators are also discouraged by the average utilisation in the low single digits, which restricts revenue generation.
Additionally, EV chargers don’t follow a uniform standard, which comes with its own set of problems as OEMs continue to produce models with different standards, leading to incompatible hardware.
One way to address range anxiety is by extending the battery life. This year also saw developments in battery infrastructure with Ola Electric assembling homegrown 4860 Lithium-ion battery cells as well as wider adoption of battery swapping technology.
The government too 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 mission of over 30% electrification of vehicles by 2030, India will need to shell out Rs 16,000 crore in capital expenditure to meet public hanging demands.
The report also notes that the financial viability for public charging stations in India remains low at less than 2% utilisation, and to achieve profitability and scalability, the country needs to aim for 8-10% utilisation by 2030.
However, companies are gearing up to address the issue at hand. CHARGE ZONE, a Vadodara-based charging startup, plans to invest $360 million to establish 25 new supercharging stations and aims to reach a total of 500 stations nationwide.
“This year witnessed transformative shifts across the EV ecosystem, driven by rapid advancements in charging infrastructure, innovative energy solutions, and a focus on reducing range anxiety. The integration of smart charging technologies, including vehicle-to-grid capabilities and energy management systems, is evolving how EV owners interact with the grid. It’s no longer just about more charging points; it’s about making them efficient, accessible, and even powered by renewable energy. Solar-powered home and community chargers are also playing a critical role, especially in Tier II and III cities where adoption is rising,” said Akshay Shekhar, CEO and Co-founder of Kazam. The startup operates charging station networks across the country.
Looking ahead, 2025 is expected to be a significant year for EVs. In the passenger vehicle category, companies like Mahindra & Mahindra, TATA Motors, Hyundai, and Maruthi Suzuki, among others, are expected to roll out new models. Meanwhile, Ola Electric and Ather are also planning their line of motorcycles. Yulu is also planning to launch its new electric scooter targeting the ecommerce segment.
