The global automotive industry is steadily shifting to electric vehicles (EVs) as they gain traction as eco-friendly alternatives to traditional gasoline (petrol) cars, and in this journey, China is surging ahead, with India also progressing commendably.
We explore the EV markets of the two Asian giants, China and India, by making inroads into their unique progress, challenges, and global implications.
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| Electric vehicles in China are now cheaper than gasoline (petrol) cars -- Photo: China Dialogue. |
China’s EV dominance
There is no doubt that China has emerged as a trailblazer in the EV space globally.
During the month of June 2023, China saw seven of the top 10 best-selling cars being EVs, an indication of the rapid adoption.
Battery and plug-in hybrid vehicles (PHEVs) now command a whopping 37 per cent of the total vehicle sales in China, easily crossing Beijing’s 2025 electrification target of 25 per cent.
China’s robust policies, strategic investments, and technological advancements have sparked this transformation into the EV space.
India’s EV journey different
In contrast, although India holds immense potential due to its growing population and urbanisation, the transition to EVs has been gradual (or rather on the slower side).
EV sales in India surged 173 per cent in the financial year 2022-23 (FY23) over the previous financial year (FY22) to 12.47 lakh (1.24 million) units.
But as per latest reports, the percentage of electric car sales was less than 5 per cent of the total car sales, despite the phenomenal growth in EVs.
The factors that have contributed to this ‘slow-moderate’ growth are inadequate infrastructure, affordability concerns, and limited policy support, among others.
However, recent initiatives and incentives by the Indian government, like the production-linked incentive (PLI) scheme, indicate a growing commitment to electric mobility, which could pave the way for a potential market shift.
The Tesla factor
Tesla, the global EV icon, has significantly impacted both markets, in different ways.
In China, the Tesla Model Y crossover SUV has jolted the market, outshining competitors and contributing to the EV surge in the country.
Similarly, Tesla’s recent entry plan into India has sparked excitement, and it could spur EV adoption in the country manifold.
China's price war in the EV space, sparked by Tesla’s aggressive pricing, has disrupted the market there.
The Model 3’s affordability, which was once double the price of premium sedans, challenges conventional vehicles now.
Price of EVs in China, India
In China recently, electric vehicles have become cheaper than gasoline (petrol) or diesel cars.
But in India, that is still a far cry even as Union minister Nitin Gadkari promised that EVs would become cheaper and be at par with conventional vehicles within a year or so.
Unique challenges, promising potential
Both the markets face distinct obstacles. In China, while electrification success has been widespread, consumer confidence and economic fluctuations could be the roadblocks.
In contrast, India faces infrastructure challenges and affordability issues as cars are way above what a common man can afford.
However, India has vast potential and government policies are becoming EV friendly, and hence, infra and manufacturing boost will determine India’s electric vehicle journey.
Battery technology
Battery technology is a key factor that will determine EV success of the two Asian giants.
China's mega investments in battery manufacturing have led to cost cuts and higher production capacity, resulting in EV prices heading south.
Although India is focusing on Make-in-India EV batteries, it is yet to develop a buoyant battery technology and spread in order to whittle down the prices.
This will take a few years and with a production boost, prices of batteries will come down in India. This, in turn, will see EV prices falling substantially.
E-Vroooom’s views
Comparing China’s and India’s EV journey, we see two dynamic nations treading their own paths — while China has accelerated with great speed by becoming a global EV hub due to its strategies long ago, India’s EV policy and positive moves signal a promising future.
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