The reason for the slow adoption of electric vehicles is their high cost. (representative)

New Delhi:

The number of electric vehicles on India’s roads has been rising steadily over the years, but petrol and diesel vehicles far outnumber them, a report said.

Windmill Capital, a research analyst firm registered with the Securities and Exchange Board of India (SEBI), said in its report that the adoption rate of electric vehicles was only 2.9 percent this fiscal.

It further noted that the “exponential” increase in electric vehicle and electric two-wheeler sales in the first months of the financial year (April-September) was due to a low base.

Electric vehicle sales surged 268% to 18,142 between April and September. Windmill Capital, a subsidiary of Smallcase Technologies, said cumulative retail sales of electric two-wheelers rose 404 percent to 2,77,910 units during the same period.

In the same period last year, EV sales were only 4,932. Sales of electric two-wheelers were only 55,147 units.

Total sales of electric vehicles and electric two-wheelers for the fiscal year were 2,96,052 units, compared with 1,03,35,204 vehicles and two-wheelers, with an adoption rate of 2.9%, the report said.

The rate of acceptance of green vehicles has continued to rise over the past seven financial years, starting from 0.1% in fiscal 2017, when total EV and two-wheeler sales stood at 27,000 units versus 2,06,37,320 units sold cars and two-wheelers.

However, it fell to 0.3% in fiscal 2021.

The reason for the slow adoption of electric vehicles is their high cost.

“Government support, active industry participation, and high fuel prices are all positives for the EV (electric vehicle) industry. The final issue with EV adoption is the Total Cost of Ownership (TCO) hurdle. TCO is the sum of all specific assets in The costs involved in purchasing, operating and maintaining it over its cycle,” Windmill said.

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The upfront cost of electric vehicles is generally higher than that of vehicles with internal combustion engines. It added that high costs are an obstacle to EV adoption in the price-sensitive Indian market.

The central and state governments have been offering incentives to promote the development of the electric vehicle ecosystem. For example, electric vehicles are exempt from registration fees, and there are tax breaks for interest paid on loans to purchase electric vehicles.

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