Electric Vehicle Growth Segment in India - Personal or Fleets? - India Renewable Energy Consulting – Solar, Biomass, Wind, Cleantech
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Net Zero by Narsi is a series of brief posts by Narasimhan Santhanam (Narsi), on decarbonization and climate solutions.
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I recently read a quote by Shailesh Chandra, President, e-mobility and corporate strategy @ Tata Motors in the Business Standard, “The personal segment is way larger than the fleet segment. Thus, even lower penetration there will unleash a different kind of potential for electrification”.

I’m presuming that he made the statement for the cars segment, as Tata Motors produces only cars for the personal segment. That makes the statement quite intriguing. So we at EV Next did some analysis.

On numbers, there’s no denying that personal vehicles are way more than the fleets. Let’s look at some numbers:

Two wheelers: India sells over two crore 2 wheeler motor vehicles every year. While a small percentage of these vehicles are used in fleets (for Swiggy etc.), a large majority is used for personal use. So, let’s say all 2 crore 2 wheelers go into the personal sector.

Three wheelers: About 6 lakh three wheelers sell every year, with passenger carriers accounting for about 80% of the total. Pretty much all these can be considered as part of the fleet segment.

Four wheelers: Taxi sales were about 10% of total car sales in 2017, or about 3 lakhs. However, this number is expected to increase to 15% by 2020. Taking an estimate 3.5 million for total car sales in 2020, that would be about a bit over 5 lakh cars sold to be used as taxis, either independently, or more likely, in fleets.

So in 2020, a total of about 2.5 crore (25 million) vehicles will be sold in India in 2020 all three categories (2w, 3w, 4w) together.

Of these, about 10 lakhs (1 million) will belong to the fleet segment.

That makes fleet sales only about 4-5% of the total vehicle sales in the country.

These numbers and proportions indeed support what Shailesh Chandra has mentioned earlier. But…

Tata Motors only makes cars for the personal segment, so the numbers to be compared are:

5 lakh cars to be used in taxis or fleets vs. 3 million personal cars.

These numbers, juxtaposed, do not seem to support his statement. For one, the personal segment is not way too larger than the fleet segment. It is 5-6 times the sales, not 20-25 times.

But more important, the fleet segment is where the real electrification makes sense, and not surprisingly, is happening too. It makes sense because of the economics – higher the capacity utilization of EVs, sooner the payback period. It makes sense owing to government mandates. In the last one year alone, there have been so many governmental mandates requiring faster electrification of the fleet segment, while there’s little chance that the government will mandate the personal segment – India is not exactly China.

India sold only about 2000 electric cars in 2018, less than 0.1% of total. We do not see reason for this to become much higher for the personal segment. But the number of electric cars sold for the fleet segment could be a much higher proportion – perhaps even 1-2% of total sold for that segment.

All these make it highly likely that the total number of electric cars sold for the fleet segment will be more than the total sold for the personal segment, for the next 3-4 years.

In our opinion hence, car makers should focus significantly more on the fleet segment until about 2025 in India.

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About Narasimhan Santhanam (Narsi)

Narsi, a Director at EAI, Co-founded one of India's first climate tech consulting firm in 2008.

Since then, he has assisted over 250 Indian and International firms, across many climate tech domain Solar, Bio-energy, Green hydrogen, E-Mobility, Green Chemicals.

Narsi works closely with senior and top management corporates and helps then devise strategy and go-to-market plans to benefit from the fast growing Indian Climate tech market.

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