Climate Trends and Climate Dot have recently developed an electric vehicle (EV) dashboard for India. The data from the dashboard has thrown up some interesting figures. It shows that the top six states of Uttar Pradesh, Maharashtra, Karnataka, Tamil Nadu, Gujarat and Rajasthan make up close to 60% of all EV sales in India in 2023. Whereas the remaining 22 states and 8 Union Territories contribute to the remaining 40% of all sales (see figure 1).

This shows that the EV adoption is largely being driven by a handful of states. A deeper look into the data also indicates peculiarities across vehicular segments, with different states leading on different vehicular segments. 

Figure 1: EV sales across India for 2023

Take Uttar Pradesh for example. So far in 2023, nearly 85% of all EV sales was in the 3W segment, indicating that electric auto rickshaws are leading in this sector. At the same time, 2W and 4W have not really taken off. In fact, the data shows that in the first seven months of 2023, nearly 80% of all auto rickshaw sales were EVs. This represents a surprising electrification of the shared mobility sector in UP and is especially encouraging given that this caters to the low-middle income segments (unlike taxis). Interestingly just 3W EV sales in Uttar Pradesh is more than the total EV sales in any state in India. 

In comparison both Maharashtra and Karnataka, have achieved only 16 and 10% penetration respectively for 3W. Both these states, however, fare well in 2W sales, with this segment making up over 86% of all EV sales in both states. Penetration of 2W EVs in both states are at 12% (KA) and 10% (MH), which indicates that mass adoption is still some distance away. 

State Incentives are making a difference

All these six top states with the exception of Karnataka provide state government demand incentives over and above the central Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME 2) subsidies. Further, sales have significantly taken off post the announcement of subsidies and the coming up of various state EV policies. However, with the reduction of subsidies and uncertainty around FAME 3, there is likely to be a reduction in sales, as indicated by the latest sales figures of some 2 wheeler OEMs across the country. 

Emerging Patterns

While it is early to make any firm generalisations, there are some macro trends that can be gleaned from this data. 

1. The low income states are seeing adoption of EVs as a means of livelihood. That is, EVs are being adopted by autorickshaw drivers as a source of income generation. Here, the adoption driver is likely to be fuel savings. Generous subsidies, especially in UP, are helping drive up these numbers. 

Figure 2: Top states by EV penetration - 3 Wheelers

Figure 2 shows that most of the states (with the exception of Chandigarh) are low income states. Chandigarh’s 3W EV adoption is explained due to a ban in registration of ICE 3W (read more)

1. The richer states like Goa, Kerala and Delhi are witnessing EV adoption as an aspirational product. The graph below shows that Kerala, Delhi and Goa have the highest penetration of 4W EVs in the country. These numbers are especially illustrative because 4W EVs are nearly twice the price of their ICE equivalent. 

Figure 3: Top ten states by EV penetration - 4 Wheelers

1. The middle income states (Maharashtra, Karnataka) are seeing high adoption of 2W EVs, indicating that EVs are seen as a value product or an aspirational product, but also something that delivers value at the current price point. 

Figure 4: Top ten states by EV penetration - 2 Wheelers

Concluding thoughts

India’s EV transition is being led by a handful of states and in a peculiar adoption pattern. Most of the other states are barely seeing the presence of EVs on their streets. Further, as this article argues, different states (and indeed different consumers within each state) are adopting EVs for different reasons. 

There are the ‘livelihood adopters’, the ‘value hunters’ and the ‘status seekers’, just as there are ‘non-adopters’. These ‘types of consumers’ are likely to continue to drive (or not drive) adoption. Policy makers may use this differential approach to ensure that their subsidies not only reach the right types of consumers, but the right states. All this of course, comes in the backdrop of FAME 3, which the industry is waiting with bated breath. 

This article was first published on Clean Mobility Shift.

Photo by Ather Energy on Unsplash