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India: An EV aspiration

Colley Hwang, DIGITIMES, Taipei 0

It may be difficult to understand India. I've been to India almost 20 times, but this is the first time that I've tried to explore India from the perspective of electric vehicles (EV). How can we ignore the world's fifth-largest car market, as India looks forward to the opportunities for EVs and V2X?

What used to be "nice to know" for study on India has now become indispensable. From studies on mobile phones and EVs, we can locate economic incentives in the process of studying this country, and the output of these studies will be a gateway to our business development.

India has a population of 1.37 billion people, 65% of whom are under 35 years of age. With a large size of young population, India will be the world's most populous country in the future. Its per capita income is only one-fifth of China's. As a result of its high reliance on traditional energy, 15 of the world's 20 most polluted cities are in India. India has a US$50 billion trade deficit with China. Fueled by basic needs such as infrastructure and Internet environment, many business opportunities are emerging. The development of EVs in line with domestic and foreign trends is driving India's dream of building an industry of its own.

According to DIGITIMES Research, 95 of the top 100 companies in the Asian supply chain come from Japan, China, Taiwan and South Korea in Northeast Asia. Only five are from ASEAN and South Asia. The four from India are in the car or scooter industry. The car and scooter industries are being transformed into a new industry of the "third mobile computer" combined with the demand for hardware and software. They need collaboration and support of the four major scientific and technological powers in Northeast Asia. We are also trying to explore how Northeast Asian countries can participate in the vibrant Indian EV market from a supply chain perspective.

India will report the global fifth-largest annual car sales of 2.71 million vehicles in the fiscal year 2021 according to Society of India Automobile Manufacturers, though its car ownership of 50 vehicles per 1,000 people lags far behind China's 204. In addition, scooters are India's primary vehicles of transport. Once reached 20 million units, scooter sales plunged to 15.12 million units during the pandemic in 2020. Nevertheless, India's position as the world's largest scooter market is indisputable. However, either its car or scooter industry is still just starting to warm up in the development of EVs. EV sales amount to less than 1% of total.

But it's just a matter of time before the market matures. According to Greenpeace, seven of the world's 10 most polluted cities are from India, or 15 out of the top 20. India relies on imports for 80% of its demand for oil. Urban pollution is critical in Indian cities. It is the central and local governments' hope to lessen air pollution and support local industries.

Driven by so many long-term and short-term incentives, Indians will not be indifferent. They are desperate to become the world's leading electronics producer, capitalizing on the opportunity of mobile communications like what China has been doing. Even though India can't entirely duplicate China's success model, it is longing for business opportunities for EVs, just like China did in the past golden decade. Indians are waiting for industrial opportunities to ferment, but opportunities do not come as a windfall for either Indians, Taiwanese or Koreans.

Credit: DIGITIMES

(Editor's note: This is part of a series of analysis on India's industry and market by DIGITIMES Asia president Colley Hwang.)

Colley Hwang, president of DIGITIMES Asia, is a tech industry analyst with more than three decades of experience under his belt. He has written several books about the trends and developments of the tech industry, including Asian Edge: On the Frontline of the ICT World published in 2019, and Disconnected ICT Supply Chain: New Power Plays Unfolding published in 2020.