By 2025, EV Market Share to Reach 10%: Battery Prices to Drop by 38%, EVs Available at ₹7 Lakhs Instead of ₹10 Lakhs
In just two years, the entire landscape of the electric car market in the country is poised to undergo a complete transformation. This is primarily due to the decreasing costs of both batteries and chips. The price of a one kilowatt-hour (kWh) battery was $130 (₹10,850) in 2021, but it has dropped to $100 (₹8,350) by 2023.
Impact of New Companies on Market Competition: Insights from Research Analyst Saji John
According to research analyst Saji John of JioJiit Financial Services, the entry of new companies with decreasing prices will intensify competition in the market, leading to a further decrease in prices.
By 2025, the price of one kWh is expected to drop to 6,650 rupees. Currently, the market offers Electric Vehicles (EVs) with battery capacities ranging from 17 to 108 kWh. As 70% of an EV’s cost is attributed to its battery, a 10 lakh rupee EV would have a battery cost of 8.60 lakh rupees.
Furthermore, the production cost of semiconductor chips in the country is expected to decrease by an additional 10%. In this scenario, the price is estimated to reduce by approximately 7 lakh rupees.
Market Transformation Due to Entry of Major Companies
The partnership between MG Motor and the Chinese parent company SAC Motors is expected to have a significant impact on the Indian EV market, as they bring cost-effective technology solutions.
Additionally, JSW, with its aluminum plant, is poised to make substantial contributions. Automotive expert Sanjeev Garg has suggested that the growth of the EV segment may attract numerous non-automobile companies to venture into this sector.
With major players like MG Motor and JSW entering the arena, the Indian EV market is likely to witness significant transformations in the coming years.
Projected 259% Growth in the Indian EV Industry by 2023-25
The Indian EV industry is anticipated to exceed ₹60,000 crores by 2025, a significant surge from ₹16,700 crores in 2023.
This suggests a potential 259% growth over the next two years. Such a substantial growth projection indicates a rapid expansion and increasing prominence of electric vehicles within the Indian automotive market.
Decrease in Vehicle Prices Due to Reduction in Battery Costs
The reduction in battery prices has led to a decrease in the prices of vehicles as well. MG Motor India, for instance, has lowered the price of its Comet EV from ₹8 lakhs to ₹7 lakhs. It is projected that by 2025, the price of cars in this category will further drop to ₹5 lakhs.
At such prices, no petrol car will be available at a lower cost. This could prompt consumers to swiftly shift towards EVs. Consequently, the EV market share in the automotive industry could potentially increase from 2.3% to 10%.
