Asia will remain the world's largest manufacturer and market for electric vehicles (EVs), EV batteries, and EV battery materials, and the continent will be at the centre of the EV revolution
As the world's third-largest auto market, India is ideal for electric vehicle manufacturers, but due to delayed domestic takeup, no Indian company is likely to have a major worldwide share of electric vehicles in the foreseeable future, according to a report by S&P worldwide Ratings. According to the report, Asia will continue to be the world's largest manufacturer and market for electric cars (EVs), EV batteries, and EV battery materials, and the continent will be at the epicentre of the EV age.
"As the world's third-largest auto market, India is a ripe target for EV firms. Sales of EVs more than doubled last year in the country. This was, however, off a low base. EV sales represented less than 2% of the total light-vehicle sales in the last 12 months," the report said.
Furthermore, it claims that 90% of EVs in India are two- and three-wheelers.
"While there is strong growth potential, the development of adequate charging infrastructure will be key to EV adoption. Given the slow take-up of EV domestically, no Indian company is likely to have a meaningful global share of EVs in the foreseeable future," it added.
According to S&P Global Ratings, Tata Motors has claimed the lead in the EV class in India, with a market share of more than 80%.
"We expect the company to maintain its strong position despite rising competition from other players, including SAIC Motor Corp. Ltd. and Hyundai, as well as domestic companies such as Mahindra & Mahindra Ltd," it said.
However, Tata Motors's UK subsidiary, Jaguar Land Rover Automotive PLC, "trails many peers in the move to EVs. This could hurt its competitiveness", the report said.
"With EVs representing just about 10 per cent of Tata Motors' expected passenger vehicle sales in fiscal 2023, we expect the margin and earnings impact to be manageable. There is no major funding requirement either given shared manufacturing infrastructure with the ICE segment," the rating agency said.
Tata Motors also raised approximately USD 1 billion by selling convertible instruments.The securities are required to be convertible into an 11%-15% interest in its Indian EV company.
"The funding has significantly reduced its debt at the India level. We believe Tata's Indian EV business has potential for further monetisation," S&P Global Ratings said.
The report said Asia will be at the centre of the EV era.
"The region has much of the resources needed for the sector (Indonesia in nickel), highly supportive policies (China), and industry-leading technology (Korea, China, Japan). A batch of Asian firms are eclipsing entrenched players, not least in China, which has a larger EV market than the rest of the world combined," the report said.