EV sector is at the start of a secular growth phase, and it will be a key driver of global economy. Ever since the first industrial revolution in 18^th century, there have been a number of major technical innovations that became the core driver of global economy for 30-60 years. (See details at – The Sixth Wave – What will drive markets for next 50 years?).

The development of information systems, internet, and telecom were all interconnected and were the core driver for previous 30-35 years. It was a digital revolution that enabled the processing and storage of vast amounts of data, revolutionized communication and information sharing, and the development of sophisticated data analytics.

This technology group tremendously increased productivity of existing industries and spawned several new industries related to computing devices, software programming, and e-commerce.

The internet ushered in a new frontier of globalization, a borderless landscape of digital information flows.

EV sector will be one of the core drivers now

During the third technological wave (1900 – 1950), IC engine was one of the core drivers, and now we have electric vehicles (EVs) taking place of that. Digital revolution is now enabling EV revolution. There are multiple reasons that indicate EV technology to remain in a secular growth phase. The key reasons are –

• There is a burning global need to control emissions
• EV technology has already proven itself to be a viable alternative
• All manufacturing inputs are available, and more resources are being found
• Economies of scale and technological advancements will improve affordability

For any technology be a major driver of growth, it must fulfil certain conditions. It should be –

• Able to address a global burning need,
• Sustainable,
• Scalable,
• Commercially viable

EV technology checks all these points.

EV growth is dramatic

Global EV sales have jumped 122 times from 2011 to 2021.

The global market for electric vehicles (EVs) has expanded dramatically over the past decade, a trend which will only continue through 2050 with government and consumer spending on EVs increasing, driven by efforts to accelerate the decarbonization of the transport industry.

A Bloomberg research expects global passenger EV sales — battery-electrics and plug-in hybrids — to increase 21% in 2024 to 16.7 million, with 70% of those being fully electric. The EV share of global vehicle sales should come in around 20% (pure-electric: 14%), up from about 17% in 2023.

Emerging economies will be fascinating to watch this year. Places like India, Thailand and Indonesia all saw EV volumes shoot up in 2023. We expect EV sales in Rest of World category to hit 840,000, dispelling any misconception that EVs are only a rich-world phenomenon.

Commercial EV sales also are set for another breakout year. After exceeding 500,00 in 2023, we expect deliveries to roughly double to 1 million in 2024.

A strongly positive development is that battery prices dropped 14% in last one year due to plummeting costs of raw materials, overcapacity, and intense competition among manufacturers.

• Global EV sales have jumped 122 times from 2011 to 2021Driven by the Indian government’s push towards sustainable mobility, growing consumer demand for new technologies, and the emergence of private players with an interest in EV technology, the future of electric vehicles in India looks promising.
• India is one of the world’s largest markets for two- and three-wheeled vehicles, ranking among the global top five for private cars and commercial vehicles.
• The Economic Survey of India 2023 forecasts a robust 49 percent compound annual growth rate (CAGR) in India’s domestic electric vehicle market between 2022 to 2030, with an estimated 10 million annual sales by 2030.
• To reach these ambitious targets, the Indian government has created policies and programs like the National Electric Mobility Mission Plan (NEMMP), a broad plan to encourage the adoption of electric vehicles in India. The aim is to reduce India’s dependence on crude oil.
• The Indian government has also formulated the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme. This plan should facilitate greater adoption rates in the coming years. The Finance Minister of India had also announced a reduction in customs duty and taxes for the 2023 budget. This will help boost the domestic production of lithium-ion batteries that power electric vehicles.
• Many state governments like Assam, Telangana, Tamil Nadu, and Gujarat have also created attractive policies and programs to incentivize EV manufacturing in their respective territories.
• In the 2023-24 Union Budget, Finance Minister Nirmala Sitharaman announced a budget allocation of INR 35,000 crore for crucial capital investments aimed at achieving energy transition and net-zero targets by 2070. Furthermore, she stated that the government will support Battery Energy Storage Systems with a capacity of 4,000 MWH through viability gap funding.
• The charging infrastructure is being expanded with investments from both government and private companies in setting up charging stations. The nation’s first EV charging plaza was established by EESL in July 2020, and in just one year the number of charging stations has multiplied over five times.
• With the government’s commitment to promoting the use of EVs, increasing consumer awareness and acceptance, and advancements in technology, are all set to drive growth in the EV market in India
• Electric vehicles (EV) accounted for just 2.4% of India’s car sales in January-July, it shows there is a huge potential that remains to be tapped
• Maruti was listed at Rs 173 (adjusted price) in 2003, in next three years became 5 times
• In same time Tata Motors stock price became nearly 6 times (from 30 to 170)
• Somewhat similar growth may be seen again, as old vehicles get replaced by EV, especially for new companies making ONLY EVs, not IC engine vehicles. That is why we have selected a new entrant.

EV industry is all set to grow till 2050+.

Whenever an industry grows for such a long period, the stocks of early leader companies give fantastic profits. For ex. Maruti was the leader of car revolution, and its stock has gone up 57 times in last 20 years!