EV sales register 50% increase!
EV is future as road transport fuels oil demand growth! Size of the car fleet may rise by 30% by 2030.
EV electric vehicle sales increased by 50% compared to the previous year as the road transport fueled Indian oil demand growth last year! Out of the 1.5 million electric vehicles sold: Over half (56%) were two-wheelers (motorcycles and scooters). Nearly half (38%) were three-wheelers (auto-rickshaws). Only a small portion (5%) was electric cars. Team of analysts at http://www.nuutan.com break down the key takeaways from the trend for our readers..
Electric vehicles are expected to save over 200,000 barrels of oil per day by 2030. Around 70% of this saving will come from reduced gasoline use. India already has over 3.5 million electric vehicles registered. This number is expected to keep growing.
India’s economy is growing rapidly. This growth means people need to travel more for both personal reasons and business. Most of this travel happens on roads, using cars, trucks, and other vehicles. Because of this, India uses a lot of fuel for transportation, especially on roads.
As India’s economy strengthens, people and businesses are traveling more, primarily by road. This heavy reliance on road transportation, which accounts for 90% of personal travel and 70% of freight movement, is driving a continuous rise in demand for fuel, especially diesel.
Although car ownership in India has increased significantly in recent years, there are still relatively few cars on the road compared to other countries. While the number of cars in India has grown eight times since 2000, it remains much lower than in places like China. This suggests that car ownership in India has room to grow considerably in the coming years, with projections estimating a 40% increase in the size of the car fleet by 2030.
Two-wheelers (motorcycles, scooters) and three-wheelers (auto-rickshaws) are very popular in India. They are cheaper to buy and run compared to cars. There are a lot of them on Indian roads. They use less fuel than cars, but because there are so many, they still contribute significantly to fuel demand. Their numbers will increase more slowly than cars. In addition, many may switch to electric power in the future. This means they are less likely to drive up gasoline demand significantly.
Most goods in India travel by road on trucks. Large trucks (over 3.5 tons) carry most of this cargo because smaller trucks struggle to compete with three-wheeled vehicles. India relies heavily on these big trucks for moving goods. This is because businesses are spread out and the road network isn’t always suitable for very large trucks. These trucks run on diesel and are essential for India’s growing economy. This means diesel use will continue to increase, but it also causes air pollution problems, especially in cities.
Trucks use most of the diesel fuel in India (about 70%). Many passenger cars also run on diesel. However, trucks still use a much larger amount. India’s manufacturing industry is booming. This means more goods need to be transported by truck. Because of all the trucks, diesel demand is expected to increase significantly in the coming years.
India has public transportation like buses, trains, and subways in cities, but most people live in rural areas. During the pandemic, fewer people used public transportation and chose cars, motorcycles, or options like cycling instead. This change is still happening and likely means less diesel is used by buses, while more gasoline is used by other vehicles. Over the next few years, we expect people to slowly start using public transportation again. This will increase diesel use by buses and slightly reduce gasoline use.
More electric vehicles (EVs) are being sold, especially motorcycles and scooters, which use gasoline. This means gasoline demand growth is slowing down. Even though fewer gasoline cars are being sold, the total number using gasoline is still high. This is because most cars on the road currently use gasoline.
Last year, out of the 1.5 million electric vehicles sold: Over half (56%) were two-wheelers (motorcycles and scooters). Nearly half (38%) were three-wheelers (auto-rickshaws). Only a small portion (5%) was electric cars. Overall, electric vehicle sales increased by 50% compared to the previous year.
In the coming years, especially closer to 2030, more and more new vehicles are expected to be electric (powered by batteries, not gasoline). This includes:
Half of all new motorcycles and scooters (two-wheelers)
One in eight new cars and light trucks
The main reason for the switch to electric two- and three-wheelers is that they are cheaper to use and maintain over time compared to gasoline versions. However, the upfront cost of buying an electric car is still higher than a gasoline car, even with government help. We expect electric cars to become cheaper over time, which will make them more popular.
The Indian government has a program called FAME to encourage people to buy electric vehicles (EVs). It started in 2015 and is currently in its second phase, which will run until mid-2024. FAME helps people buy EVs in two ways:
Making them cheaper upfront: The program reduces the initial cost of buying an EV.
Building charging stations: FAME helps pay for building more places to charge EVs.
FAME is the main way the government supports EVs, but there are other things too:
Lower sales tax: The government also charges a lower tax on EVs compared to gasoline or diesel vehicles.
State-level policies: Many states in India have their own programs to encourage people to buy EVs.
Newer vehicles are designed to use less fuel due to government rules and technology improvements. This means fuel consumption growth is slowing down. Indian cars, on average, use less fuel than similar cars around the world because they are smaller and many use diesel.
India has done a good job of making cars more efficient, even as they’ve gotten bigger and more powerful (like in China or the US). However, there are some factors that will limit future improvements:
More SUVs are being sold, which generally use more fuel.
Not many old, inefficient cars are being replaced.
Fewer diesel cars are being sold, which are more fuel-efficient than gasoline cars.
Trucks haven’t improved their fuel efficiency as much because of delays in updating standards. This means diesel use by trucks won’t decrease much.
Farming is a big part of India’s economy. Because of this, India uses a lot of diesel fuel (called “gasoil”) for farming compared to other countries. Diesel is used to run farm machinery and water pumps. The amount used can change each year depending on the weather and how much food is grown. We expect diesel use in farming to stay about the same until 2030. It will continue to be a major part of diesel use outside of road vehicles.
Source: Indian Oil Market, Outlook to 2030 by INTERNATIONAL ENERGY AGENCY
Images: http://www.pexels.com
Content Courtesy: http://www.nuutan.com
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