EV Sales in India may Moderate Next Year

Analysis of Tata Motors’ Projections on EV Sales Growth in India

Understanding the Impact on Investors and Industries

Background: A senior executive from Tata Motors, a major Indian automaker, has projected that the growth rate of electric vehicle (EV) sales in India may moderate in the calendar year 2024, following a strong 90-95% increase in 2022. This projection is based on a higher baseline comparison, where EV volumes surged by nearly 100,000 units in 2023. The executive emphasizes that this slower growth trajectory in 2024 should not be seen as a sign of weakening demand but rather highlights the need to address consumer barriers to mass EV adoption, such as limited charging infrastructure and complex policy frameworks.

EV Sales in India may Moderate Next Year

Impact on Retail Investors

Long-Term Promising Outlook: For retail investors in Indian automobile stocks, the projection of potentially slower EV volume growth in 2024 does not diminish the overall promising outlook for the EV market. In fact, Tata Motors’ affirmation of a strong product-market fit for Indian EVs validates the company’s aggressive investments in this sector. With barriers like range anxiety and affordability gradually diminishing, the demand for EVs appears sustainable. This maintains a long runway for Tata Motors, Mahindra & Mahindra, and other EV-focused automakers to gain market share, which can attract investor interest. Therefore, any near-term moderation in growth rates is not a cause for concern.

Policy Focus on Charging Infrastructure: The Tata Motors executive’s call for urgent policy focus on charging infrastructure serves as a timely reminder of the enablers required to improve customer adoption of EVs. Stock prices could potentially react positively if news emerges of significant government investments in the EV ecosystem, particularly in charging infrastructure. Additionally, export-oriented auto component suppliers stand to benefit from global EV growth, offering Indian investors indirect exposure to the sector.

Impact on Industries

Infrastructure Readiness: The projection of moderating EV sales growth highlights the need for various industries to prepare for the transition to electric mobility in India. Electric grid and energy distribution companies must be ready to manage increased EV charging load without causing local power outages. Smart charging solutions become more important to efficiently distribute energy. Public charging infrastructure builders and equipment vendors await government contracts, as policy uncertainties have discouraged private capital deployment. Battery manufacturers also face challenges in planning production capacity expansion, which could lead to increased imports to meet demand.

Renewable Energy Growth: Renewable energy companies stand to gain over time as storage-backed EV charging becomes a key application for round-the-clock clean energy consumption. However, regulatory clarity is needed to facilitate this transition.

Long-Term Benefits and Negatives

Optimizing the EV Ecosystem: Over the long term (5-10 years), Tata Motors’ call for specific policy attention to critical areas lays the groundwork for optimizing India’s EV ecosystem. This includes addressing infrastructure needs early, such as charger availability, grid capacity, and payment systems standardization. It also emphasizes the importance of regulatory stability at the state level to reduce uncertainty and encourage investment.

Risk of Over-Dependence: While the comments underscore the need for infrastructure development, they also reveal the pressure on automakers to drive the EV transformation without matching infrastructure progress. This could result in over-dependence on a few supportive states and cities, potentially slowing the mainstream adoption of EVs in India and putting the country behind global emission reduction timelines.

Short-Term Benefits and Negatives

Realistic Projections: In the near term (2023-2024), Tata Motors’ assessment provides valuable insights into the realistic growth expectations for India’s EV adoption. This allows stakeholders in the EV value chain to make informed decisions regarding capacity expansion and investments, aligning them with actual demand rather than speculative projections.

Temporary Slowdown in Capital Inflow: However, the downward revision of growth expectations, without corresponding policy announcements to address infrastructure gaps, could temporarily slow down private capital inflow into the electric mobility sector over the next 6-12 months. Automaker marketing strategies may need adjustments to focus on consumer education about the advantages of EVs as the initial enthusiasm among early adopters wanes.

Initiating Public Debate: Despite potential challenges, the constructive criticisms raised by Tata Motors’ executive initiate a public debate on recognizing priority infrastructure gaps that require policy support and public funding, such as the expansion of public charging infrastructure and improved access to electricity.

In conclusion, Tata Motors’ projections highlight the need for a holistic approach to India’s EV transition, involving not just automakers but also government intervention and investments in charging infrastructure and supportive policies. While short-term growth may moderate, the long-term outlook for the EV market in India remains promising.

Impact of Potential EV Sales Moderation in India:

Indian Companies Potentially Impacted:


  • Tata Motors:
    • As a leading EV player with multiple model launches planned for 2024, even moderate growth could be positive.
    • Focus on affordability and addressing charging infrastructure bottlenecks could strengthen market position.
    • Market sentiment could be slightly positive due to continued market share leadership and proactive approach.
  • Other Established EV Players:
    • Mahindra & Mahindra, Ather Energy, Hero Electric: Continued market growth, despite moderation, could benefit established players with diverse offerings.
    • Market sentiment could be mixed, with potential upside from positive industry trends but downside from increased competition.
  • Charging Infrastructure Companies:
    • Tata Power (through Tata Power DDL), Adani Green Energy, Fortum Charge & Drive: Increased focus on addressing charging infrastructure bottlenecks could create opportunities for these companies.
    • Market sentiment could be positive due to potential contract awards and infrastructure investment opportunities.


  • New Entrants in the EV Market:
    • Intense competition and a high base may make market entry and growth challenging for new players.
    • Market sentiment could be negative due to potential difficulty in establishing a foothold.
  • Traditional Automakers Reliant on ICE Vehicles:
    • Continued focus on EV adoption could put pressure on their core business of internal combustion engine (ICE) vehicles.
    • Market sentiment could be mixed, with potential downside from slower ICE sales but upside from diversifying into EVs.

Global Companies Impacted:


  • Global EV Component Suppliers:
    • Bosch, LG Chem, Panasonic: Continued EV growth in India, even at a moderate pace, could boost demand for their components.
    • Market sentiment could be positive due to potential increase in business volume.
  • Global Charging Technology Providers:
    • ABB, Siemens, Tesla: Increased focus on building charging infrastructure could present opportunities for these companies to offer their technologies and expertise.
    • Market sentiment could be positive due to potential contracts and market access in a rapidly growing segment.


  • Global Oil & Gas Companies:
    • Faster EV adoption could potentially harm long-term demand for oil and gas in India.
    • Market sentiment could be negative due to concerns about future growth prospects.

Note: These are potential impacts based on the given information. Actual outcomes may vary depending on various factors like government policies, consumer preferences, technological advancements, and global economic conditions.

Disclaimer: This analysis is for informational purposes only and should not be considered as financial advice. Please consult a qualified financial advisor before making any investment decisions.

Source: ET Bureau. “‘EV Sales in India may Moderate Next Year.'” Economic Times. Published Dec 23, 2023.

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