India ripe target for EV companies but domestic take up slow
Delhi : India is the third-largest auto market in the world, making it a prime target for electric vehicle companies. However, due to delayed domestic adoption, no Indian business is anticipated to have a significant worldwide share of electric vehicles in the near future, according to a research by S&P worldwide Ratings. According to the report, Asia will continue to be the world's largest manufacturer and market of electric cars (EVs), EV batteries, and EV battery materials. The region will also be at the epicentre of the EV age.
India, the third-largest vehicle market in the world, is a prime market for EV companies. Last year, the nation's EV sales more than doubled. But this was coming from a very low foundation. Less than 2% of all light-vehicle sales during the previous 12 months were electric car sales, according to the research. Additionally, it claimed that 90% of EVs in India are two- and three-wheelers.
"EV adoption will depend on the creation of a sufficient charging infrastructure, notwithstanding the industry's significant growth potential. No Indian firm is expected to have a significant worldwide share of EVs in the near future given the delayed domestic adoption of EVs, it continued. Tata Motors has over 80% of the market share in India's EV sector, according to S&P Global Ratings, which noted this.
According to the statement, "we expect the company to continue its strong position despite increasing rivalry from foreign competitors, including SAIC Motor Corp. Ltd. and Hyundai, as well as local firms like Mahindra & Mahindra Ltd.
However, Jaguar Land Rover Automotive PLC, a UK-based subsidiary of Tata Motors, "trails many peers in the move to EVs." This may make it less competitive, according to the article.
"With EV sales estimated to make up just approximately 10% of Tata Motors' total fiscal 2023 passenger car sales, we anticipate the margin and profits effect to be tolerable. Given the common production infrastructure with the ICE segment, there is also no significant capital required, according to the rating agency.
Additionally, Tata Motors raised nearly $1 billion by selling convertible securities. The securities must be convertible into an 11%–15% interest in the company's Indian EV business. "The financing has greatly decreased its debt at the level of India. According to S&P Global Ratings, Tata's Indian EV business "has potential for further monetisation."
According to the analysis, Asia will be the epicentre of the EV age. "The area contains many of the resources required for the sector, including Indonesia's nickel, China's extremely favourable regulations, and Korea, China, and Japan's market-leading technology. In China, which has a larger EV market than the rest of the globe combined, a number of Asian companies are surpassing established giants, according to the research.
