Following the footsteps of Apple (quite literally), Tesla is set to open its first showroom in India in Mumbai’s BKC. The electric giant has signed a 5-year lease deal for space in the Maker Maxity building.
This marks a turning point. India’s EV story has until now been written by domestic champions and foreign players who manufacture locally.
Tesla’s arrival won’t threaten Tata or Mahindra. Its premium price tags position it against Mercedes, Audi, and Volvo in the luxury segment.
But this raises a crucial question: Is India’s EV wave now mature enough for wealth creators to capture value across the ecosystem? Or are they too late?
India has embarked on an ambitious journey towards electric mobility, envisaging 80% penetration for electric two-wheelers (E2W) and three-wheelers (E3W), 70% for electric commercial vehicles (ECW) and 30% for electric private cars (E4W) by 2030.
Welcome to this week’s Create Wealth blog where we explore India’s current EV landscape and what comes next. In this blog, I’m going to cover:
- India’s EV Journey So Far
- What does the 2W, 3W, 4W and Commercial Vehicle stack look like?
- Charging Ecosystem in India
- Funding in the EV Ecosystem and how can Indians invest?
- How much will a Tesla cost in India?
Let’s dive in.
The EV journey so far in India
India has the 4th largest automotive market in the world in terms of value. The automotive sector contributes approximately 7.5% to India’s GDP and constitutes a staggering 50% of its manufacturing GDP.
EV sales have surged by an impressive 45% YoY, reaching 1.8 million vehicles sold In FY24.
Uttar Pradesh, Maharashtra, Karnataka, Delhi and Rajasthan account for 50% of all EV sales. Top cities by EV sales are Bengaluru, Delhi, Mumbai and Pune respectively.
Government intervention: Steering the electric transition
EV is among the few industries with several state-level policies alongside a national policy.
Govt.’s target of 30% EV adoption by FY30 is an ambitious goal considering that we’re at 7.7% as of FY24.
The flagship FAME (Faster Adoption and Manufacturing of Electric Vehicles) is a crucial catalyst in this resolve.
FAME I launched in 2015 with a modest INR 895 crore budget, while FAME II expanded significantly to INR 10,000 crores between 2019-2024, offering subsidies up to INR 15,000 per kWh for electric vehicles.
When FAME II ended in July 2024, the market felt an immediate impact—sales dropped 25% for e2Ws, 34% for e3Ws, and 20% for e4Ws. This prompted the introduction of the PM E-DRIVE scheme with INR 10,900 crores to maintain momentum.
Beyond direct subsidies, the ecosystem benefits from:
- Production-linked incentives totalling INR 81,042 crores across battery chemistry, auto components, and electronics
- SPECS Scheme reimbursing 25% of manufacturing capex
- The New India EV policy offering INR 41.5 billion in incentives for companies meeting domestic value-add criteria
State-level policies complement these national initiatives, creating a multi-layered support system that addresses both demand and supply challenges simultaneously.
The evolution from subsidy-driven to infrastructure-focused policies signals the government’s strategic shift toward building sustainable market foundations rather than temporary incentives.
The vehicle stack: A tale of four segments Electric Two-Wheelers (E2W): The frontrunners
With India’s per capita income at ~ USD 2500 —merely one-eighth of the global average of USD 20,645—affordable transportation solutions are essential. This economic reality makes two-wheelers the backbone of India’s mobility ecosystem.
India has the largest two-wheeler market globally. With 2.2 million+ cumulative sales till FY24, it is now also the second largest Electric-2-Wheeler (E2W) market in the world.
E2W sales grew at a staggering 174% CAGR from FY21 to FY24, reaching over 1 million units last year. This isn’t surprising considering the economics—electric scooters reduce operating costs by 25% for private users and a whopping 57% for commercial fleets.
In the booming e-commerce landscape, companies are increasingly turning to EVs for last-mile delivery to reduce costs and boost profitability.
The numbers tell a compelling story. India’s e-commerce industry, currently valued at USD 70 billion, is projected to reach USD 325 billion by FY30, growing at an impressive 29% CAGR.
Within this expanding market, last-mile delivery represents a significant cost burden—10-15% of order value for traditional e-commerce and over 15% for quick commerce operations. By switching to electric two-wheelers, companies are achieving a remarkable 20-70% cost reduction in last-mile delivery expenses.
Electric Three-Wheelers (E3W): The silent achievers
Three-wheelers have achieved the highest EV penetration among all segments. Why? The economics are compelling—37% lower operating costs compared to ICE counterparts.
E3W sales grew at 90% CAGR from FY21 to FY24, reaching 561,000 units. Uttar Pradesh leads with 39% market share, followed by Bihar at 12%.
The most fascinating aspect? E3Ws face fewer charging infrastructure challenges due to their compatibility with standard home-plug charging.
Mahindra Last Mile Mobility leads the passenger E3W market with a 9% share.
Electric Four-Wheelers (E4W): The rising tide
The E4W segment is witnessing a revolution of its own. Sales grew at an impressive 154% CAGR from FY21 to FY24, reaching 99,000 units.
Tata Motors dominates with a 69% market share, followed by MG Motors (13.7%) and Mahindra & Mahindra (6.9%). BYD Auto, a Chinese manufacturer, has carved out a 2.2% share by focusing on premium offerings.
The crucial price range for mass E4W adoption in India is INR 10-20 lakh, striking the balance between affordability and quality. This explains why companies like BYD are launching SUVs in higher price segments to position themselves in less competitive spaces.
Interestingly, hybrid electric vehicles (HEVs) are also gaining traction, with sales comparable to pure EVs. In H1 2024, HEV sales reached 54,118 units, showing a 10.4% increase year-on-year.
Electric Buses (E-Buses): The strategic movers
India is the second largest bus market globally.
E-buses represent a small but strategically important segment, growing at 110% CAGR from FY21 to FY24 to reach 3,700 units.
The government has launched several schemes to subsidize public electric buses, targeting 50,000 buses by 2030. These include FAME I, FAME II, NEBP I, NEBP II, and the PM e-Bus Sewa Scheme.
Maharashtra and Delhi lead adoption, accounting for 23% and 22% of all e-bus sales respectively.
The economics remain challenging—e-buses cost 76% more to operate than diesel buses even with subsidies—but the environmental benefits and declining battery costs make them increasingly viable.
Tata Motors and Olectra Greentech dominate this space, securing 65% of the e-bus order book in India.
The charging ecosystem: Building the backbone
Imagine buying a car without fuel stations. That’s the chicken-and-egg problem facing EV adoption.
India currently has 16,347 public/semi-public chargers, heavily concentrated in Karnataka (31%), Maharashtra (19%), and Delhi (12%). The EV-to-charger ratio stands at a concerning 135:1, far from the government’s 2030 target of 40:1.
To address this, the Ministry of Power has mandated at least one charger in a grid of 3km x 3km in cities and one charging station every 25km on highways. The Ministry of Housing and Urban Affairs has set provision norms for buildings: one slow charger per 2-3 vehicles depending on the type, and one fast charger per 10 vehicles.
Several companies are racing to build this infrastructure. Ola Electric leads with 36,000 planned chargers, followed by Charge Zone (8,500), EVRE (7,000), and Tata Power (6,500).
The funding landscape: Following the money
| If you want to know where a market is heading, follow the money. |
| The Indian EV ecosystem has attracted $7.2 billion in cumulative funding across 361+ companies, with 20 acquisitions and 6 IPOs. Bengaluru leads with 51% of this funding, followed by Mumbai (13%) and Gurgaon (9%). |
Eight companies have accounted for over 50% of total funds raised: Tata Passenger Electric Mobility, Ola Electric, Mahindra Electric Automobile, Ather Energy, Ampere Vehicles, T1 Clean Mobility, EKA Mobility, and Bounce Infinity.
How can Indians invest in the EV ecosystem?
For wealth creators looking to capture value in the EV ecosystem, several avenues exist:
1. Public markets
Many listed companies have significant EV exposure such as:
- Tata Motors: Leading e-car manufacturer with 69% market share
- TVS Motor Company: Second largest e-2W manufacturer
- Exide Industries: Major battery manufacturer investing heavily in lithium-ion production
- Amara Raja Batteries: Transitioning from lead-acid to lithium-ion batteries
- Olectra Greentech: Dominant player in the e-bus segment
2. Private Equity and Venture Capital
For seasoned investors, VC/PE funds focusing on EV and climate tech offer exposure to early and growth-stage companies Notable funds include:
- Green Frontier Capital
- Blume Ventures
- Micelio Mobility
- AdvantEdge
- Transition VC
3. Startup investments
Angel investors can consider direct investments in promising EV startups, particularly in these high-growth segments:
- Battery recycling (expected to be a $1 billion opportunity by 2030)
- EV motor manufacturing (projected as a $10 billion market)
- Charging infrastructure (growing at 36% CAGR)
- Battery-as-a-Service (growing at 48% CAGR)
4. ETFs and Mutual Funds
Following are a few thematic funds focused on clean mobility and transportation, offering passive exposure to the EV space:
- Mirae Asset Electric & Autonomous Vehicles ETF
- DSP Natural Resources and New Energy Fund
- SBI Energy Opportunities Fund
How much will a Tesla cost in India?
Tesla’s entry into India is all set to change the game for existing players. This rough cost analysis provides a perspective on what early adopters in India’s luxury EV segment will need to budget for compared to currently available electric vehicles.
The road ahead: What’s next for India’s EV journey?
India’s EV journey is at a critical inflection point. The early adoption phase is giving way to mainstream acceptance, creating both challenges and opportunities.
For wealth creators, the opportunity lies not just in picking winners but in understanding how the entire ecosystem is evolving. The real value will be captured by those who can identify the critical enabling technologies and services that will accelerate adoption across all segments.
As Tesla prepares to park its sleek models in Mumbai showrooms, India’s EV story is entering a new chapter—one that balances premium offerings with mass-market solutions, imported technology with homegrown innovation, and immediate profits with long-term sustainability.
The electric tide isn’t just rising in Mumbai—it’s sweeping across the nation, creating waves of opportunity for those bold enough to navigate them.
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