Kerala emerges as frontrunner in EV adoption race in India, Auto News, ET Auto
Kerala emerges as frontrunner in EV adoption race in India, Auto News, ET Auto

Kerala emerges as frontrunner in EV adoption race in India, Auto News, ET Auto

February 20, 2024
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<p>Greater consumer awareness, lower cost of operations and wider spread of charging infrastructure have been driving up sales in these states, senior industry executives told ET.</p>
Greater consumer awareness, lower cost of operations and wider spread of charging infrastructure have been driving up sales in these states, senior industry executives told ET.

Demand trend in Kerala has baffled automakers like Tata Motors and MG Motor India that are reporting high demand for electric cars from this tiny southern state that accounts for only about 4% of all passenger vehicles sold in India. Kerala has emerged a frontrunner in adoption of the technology, trailing only Maharashtra in lapping up electric cars like Tata Tiago EV to MG Comet, launched at affordable price points in the mass market in the past 12-18 months.It is followed by Karnataka and Gujarat. Together, the three states accounted for about 35% of the 82,000-odd electric cars sold in the country in CY2023.

Greater consumer awareness, lower cost of operations and wider spread of charging infrastructure have been driving up sales in these states, senior industry executives told ET.

“With growing awareness about the technology and its usage, concerns over range anxiety are easing out. Especially in these states (Kerala, Karnataka and Gujarat), we are seeing more and more consumers becoming comfortable (buying electric cars),” said Vivek Srivatsa, chief commercial officer at Tata Passenger Electric Mobility (TPEM) that has a share of more than 70% in the electric passenger vehicle segment in the country. “Our database shows 90% of our consumers charge their cars at home. The average distance they drive stands at about 40 km/day,” he said.

MG Motor, which has on offer Comet and ZS EV electric vehicles, is selling about 100 units of these cars every month in Bengaluru alone, compared to about 50-odd units in a much larger market like the National Capital Region.

“Consumers in southern states are more rational when it comes to purchasing vehicles,” said Rajeev Chaba, chairman emeritus of MG Motor India. “Electric cars offer lower cost of operations and we are seeing strong demand from states like Kerala, Karnataka and Telangana.”

Driving an electric vehicle for 1,000 km per month can result in a monthly saving of Rs 7,000, as per industry estimates. The cost of running an EV is Re 1 per km, as opposed to around Rs 8 per km for an internal combustion engine (ICE) vehicle.

While the share of electric cars in overall vehicle sales in the country remains low, Tata’s Srivatsa is optimistic that as more choices come in and community charging infrastructure develops, demand for electric vehicles will accelerate.

About a dozen new models with electric powertrain are set to hit the roads in the upcoming financial year from car makers including Maruti Suzuki, Hyundai Motor and Tata Motors, doubling the number of choices on offer for car buyers.

An ET analysis of state-wise car sales shows demand for electric vehicles, once limited to larger cities, is becoming more broad-based. The share of electric car sales in India’s top five states now stands at 59.5% in 2023, down from 72.6% in 2022.

In addition to Kerala, Karnataka and Gujarat, automakers saw sales grow manifold in Rajasthan, Uttar Pradesh and Tamil Nadu amid supportive state policies and keen consumer interest.

“Less than 50% of our sales today come from tier-I cities, which effectively means that demand is becoming more widespread and coming in even from smaller towns and cities,” Srivatsa said.

Tata Motors expects nearly one-fifth of its total passenger vehicle sales to come from EVs in CY2024. The company is set to introduce two more EVs in the course of the year.

“There is a deep high-income class in non-metro cities, which is affluent. Hence, there is a preference for high-priced vehicles, and EVs fit the bill,” said Madan Sabnavis, chief economist at Bank of Baroda. “This will spread to more centres as charging facilities also build up. For this class, cost is not a factor for sure.”

Kerala, which accounts for only 4.4% of total four-wheeler sales in the country, had a 13.2% share in EV four-wheeler sales in 2023.

Maharashtra continued to account for the majority of EV four-wheeler sales in 2023. However, its share halved from the previous year. Delhi, too, saw its share dip last year.

The share of Uttar Pradesh in four-wheeler sales jumped to 6.4% in 2023 from 0.5% earlier, with Noida accounting for one-fourth of the states’ total sales, while Rajasthan’s share increased to 6.1% from 4.3% earlier.

  • Published On Feb 13, 2024 at 07:51 AM IST

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