Park+ discusses rapid growth of electric passenger vehicle market

Park+ started with the goal of connecting commuters with safe, secure and digitalized parking spaces across the country and has now evolved to become a safe space that caters to people’s car needs. Park+ started with an objective to help travelers save time while searching for parking spaces at various locations across the country. However, as Park+ partnered with its customers, they realised the need to expand the scope to include additional car-related requirements like insurance renewal, FASTag hassles, challan payment etc. With the idea that change will always remain the only constant, we have now extended our services to everything car-related and simply follow one simple guideline: “Simplifying the Car Ownership Process”.

In a recent interview, Abdullah interacted with Mr. Amit LakhotiaFounder and CEO, Park+ in which he discussed the growth of the electric passenger car market globally and in India, consumer preferences have shifted towards electric passenger cars in recent years, government policies and incentives have influenced the adoption of electric passenger cars, additional measures that governments can take to further stimulate the electric passenger car market, recent technological developments in electric passenger cars, traditional automakers adapting to the growth of electric vehicles in the passenger car market, future growth of the electric passenger car market over the next decade.

1. What are the key factors driving the growth of the electric passenger car market globally and in India?

The transportation sector accounts for about 24% of global energy-related CO2 emissions. Electric passenger cars, which emit no tailpipes, offer a solution. Government regulations are significantly influencing consumer behavior and market trends. India’s FAME program aims to achieve 30% of sales of electric vehicles by 2030, driven by rising fuel prices, concerns about air pollution, and improved charging infrastructure. As consumers increasingly recognize the benefits of electric vehicles, demand for these eco-friendly vehicles is growing.

2. How have consumer preferences towards electric passenger cars changed in recent years?

According to the McKinsey study, several factors are driving the growing interest in electric vehicles. Potential buyers cite environmental benefits (67 percent), lower total cost of ownership (26 percent) and reduced engine noise (26 percent) as the main benefits of driving an electric vehicle.

3. How have government policies and incentives influenced the introduction of electric passenger cars?

Production Linked Incentive (PLI) Schemes are expected to bring down the cost of production and make EVs more affordable. The ₹18,100 crore PLI scheme for ACC Battery Storage aims to achieve a production capacity of 50 GWh (gigawatt-hours) of advanced cell chemistry batteries in India. Private players are expected to add another 95 GWh, taking the total capacity to 145 GWh and bringing down the cost of batteries, a major factor in making EVs affordable.
The 7% GST cut on electric vehicles and charging stations has reduced the upfront cost of purchasing electric vehicles, making them more attractive to price-sensitive consumers. Reflecting this policy change, electric two-wheeler sales in India have increased from 0.09% of total sales in 2018 to 5.28% in the first half of 2023. FAME India Phase-II offered subsidy of up to 40% on electric two-wheelers, which led to a significant increase in sales. However, with the increase in market penetration, the subsidy has been reduced to 15% to make the scheme more sustainable. These policies are expected to make electric vehicles more price-competitive compared to petrol vehicles, which could significantly impact their adoption in the market.

4. What additional measures could governments take to further stimulate the market for electric passenger vehicles?

Governments can boost the EV market by expanding charging infrastructure, increasing financial incentives such as subsidies and tax breaks, and implementing stricter emission regulations. Investing in awareness campaigns, supporting research and development of battery technologies, and ensuring the availability and affordability of EVs is also crucial. A comprehensive strategy that includes encouraging battery production and providing incentives for small hybrid vehicles can be crucial for the Indian EV industry, driving significant progress until EVs reach critical mass.

5. What are the latest technological advances in electric passenger vehicles?

Recent technological advances in EV passenger vehicles include the development of solid-state batteries, which offer higher energy density and faster charging times than traditional lithium-ion batteries. Innovations in autonomous driving technologies and advanced driver assistance systems (ADAS) are improving safety and convenience. Additionally, improvements in electric powertrains and regenerative braking systems are increasing efficiency and performance. Improved connectivity features, such as over-the-air updates and integrated smart systems, are also becoming standard, providing a smoother and more intelligent driving experience. Together, these advances are making EVs more efficient, reliable and attractive to consumers.

6. How are traditional automakers adapting to the growing popularity of electric vehicles in the passenger car market?

Traditional automakers are quickly adapting to the rise of electric vehicles in the passenger car market, investing heavily in electric vehicle technology and expanding their EV product lines. They are forming strategic partnerships with technology companies and battery manufacturers to expand their capabilities. In addition, many are converting existing manufacturing facilities to produce electric vehicles, introducing new electric models and setting ambitious goals to phase out combustion engines. These automakers are also focusing on developing proprietary charging networks and offering comprehensive EV services to stay competitive in the growing market.

7. How do you think the electric passenger car market will develop over the next decade?

EV sales are expected to continue to grow strongly in the next decade. We expect EV sales to reach around 17 million by the end of 2024, up more than 20% year-on-year. National policies and incentives, along with increasing price competition, will help bolster sales.