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India's EV Dilemma: Gasoline and Diesels Dominate the Automotive Market

Published: 9.11.2023

India’s Road Transport Minister issued a warning to both domestic and international automakers, urging them to reduce the production of diesel vehicles with high emissions. This development has spurred conversations and heightened awareness regarding the imperative for sustainable mobility solutions within the nation.

The automotive landscape in India has experienced a notable transformation in recent years where petrol-fueled vehicles surged in popularity, encompassing roughly 68.4% of car sales during the initial seven months of 2023, a substantial increase from the 42.5% observed in 2014.

This shift primarily comes from price-conscious consumers who favor petrol-driven automobiles due to their lower initial costs.

Although petrol vehicles have dominated the mainstream market, diesel variants continue to thrive within the luxury automobile segment. In 2023, the market share of diesel luxury cars has risen to 33%, an increase from the 31% observed in 2021. Luxury vehicle purchasers may display a lesser sensitivity to pricing and place greater emphasis on the performance and prestige associated with diesel-powered automobiles.

Diesel still maintains a substantial presence in India's transportation sector, particularly among privately owned taxis, utility vehicles, and trucks. Owners of these vehicles often prioritize fuel efficiency, rendering diesel an enticing choice. The challenge here lies in transitioning these commercial and utility vehicles toward more environmentally friendly alternatives without imposing financial burden on their operators.

While petrol and diesel vehicles continue to dominate in the Indian market, electric vehicles are slowly gaining traction. In the initial seven months of 2023, EVs constituted 2.4% of India's car sales. The Indian government has set a goal attaining a 30% market share for EVs by 2030, underscoring its commitment to emissions reduction and promotion of eco-friendly transportation.

Tata Motors has emerged as a frontrunner in the Indian EV Market and their dedication to electric mobility, exemplified by the success of the Tata Nexon EV, India's best-selling electric SUV, showcases the potential for domestic automakers to spearhead the transition toward sustainable transportation.

Tesla has shown an interest in the Indian market but encountered challenges such as the limited availability of charging infrastructure and the budget-conscious nature of Indian consumers.

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