A recent Bain & Co report indicates that by 2030, 14-16 million new electric vehicles will sell annually -this is up from just 2 percent of all vehicles sold this year.
The increased sales in many segments (such as two-wheelers, which hit 4-5 percent in December), will become more visible in 2026. This is when 4 to 5 million EVs across different segments are expected to be sold–accounting for 15 to 20 percent of total sales according to the report.
Projected levels of EV penetration, according to Bain, will result in a new revenue pool specific to EVs between $76 and $100 billion by 2030. (This already accounts for the cost of batteries and other components in the value chain). Out of the total pie, four-wheelers are projected to take up 41 percent while two-wheelers will make do with 33 percent. The remaining revenue is left for other ventures.
If this data proves accurate, there would be an $8-$11 billion profit pool for participants, with passenger vehicles making up the largest segment in value. This is surprising because two-wheelers have much higher penetration and volume levels.
Bain has predicted that although electric two-wheelers make up a minuscule portion of the total sales in the segment currently, they will skyrocket to 20 percent in only four years. By 2030, it is expected that demand for these types of vehicles will be between 40 and 45 percent.
Vehicles that run on electricity, currently headed by Tata Motors, are predicted to make up 7-10 percent of the market in 2026. This will get close to 15-20 percent of the car market share by 2030.
According to Bain, by 2030, 20-25 percent of light commercial vehicles (LCVs) and 15-20 percent of buses will be electric. The sales of buses are primarily dependent on orders from the government and state transport corporations.
The traditional internal combustion engine (ICE) will continue to dominate the medium and heavy commercial vehicle space, with a mere 2-5 percent conversion to EVs, according to the report.
Though some may disagree, Bain projects that the conversion to electricity will occur relatively quickly. For example, Ola’s Bhavish Aggarwal believes that in just three years, 80-100% of the two-wheeler market will have made the shift.
The continuous increase in the popularity of electric vehicles has caused many private equities and venture capital entities to invest in the auto sector. In only three years, they invested a total of 3.7 billion dollars worldwide, with the majority being given to auto original equipment manufacturers (OEMs).
The Tatas, who are following an ambitious electric strategy, have received the most investments out of anyone on the list with $1 billion. Ola Electric is in second place with $860 million, and they have Softbank’s support. The other companies are lagging behind a little bit; Mahindra & Mahindra has only gotten $240 million in funding and two-wheeler startup Ather Energy bringing in $230 million.
The Bain & Co report gives an interesting perspective on the future of electric vehicles. It shows that if their forecasts are accurate, EV penetration will increase exponentially in the next decade, and many markets will shift to become more electric-centric.
It will be interesting to see if their predictions come true and if the industry can meet the challenges of quickly shifting technology. As electric vehicles become more and more popular, it is clear that the traditional ICE will be on its way out.
The future of EVs looks brighter than ever before and it’s exciting to watch the industry transform as new players enter the market. All that is certain is that it’s a great time to be in the EV industry!
Shivendra Tiwari is an Engineer and an MBA in Marketing. He is the Content head at Marketing91 and a thorough Online Marketing enthusiast. Shivendra loves to follow different brands and study their Business and Marketing tactics.