EXCLUSIVE: Analyst Says Recent Fire Incidents Threaten To Derail EV Adoption In India

With nearly a dozen EV fire incidents in the past six months, Indians will turn more cautious towards switching to electric vehicles, according to Suraj Ghosh, Director, Mobility, S&P Global.

Ghosh told Benzinga that "the increase in fire incidents of late has definitely brought in an element of doubt in the prospective customers' minds, especially in the 2W category."

"As EVs are still at an early stage of adoption, such incidents have the potential to impede the pace of acceptance, and that's not desirable," he further added.

What Happened: This came after recently, Indian two-wheeler electric vehicle maker Okinawa Autotech voluntarily recalled 3,215 units of its Praise Pro scooter to fix any issues related to batteries after two fire incidents in a row.

The company, which has the second-largest market share for two-wheeler EVs in the country, was in trouble after one of its scooters burst into flames, claiming the lives of a man and his thirteen-year-old daughter.

Another Indian electric two-wheeler manufacturer, Ola Electric Mobility, was also recently under fire over quality issues. In the aftermath, Indian electric vehicle entrepreneur Bhavish Aggarwal — founder of multinational ride-sharing Ola Cabs — had said he would step back from day-to-day operations to focus more on the engineering functions, team building, and products.

The Union Ministry of Road Transport and Highways (MoRTH), Government of India, has also roped in the Indian Institute of Science, Bengaluru, to investigate the recent mishaps.

India To Only Adopt EVs Fully By 2030: The recent data from India's automobile dealer body showed that amid the skyrocketing fuel prices in India, the electric vehicle sales have seen an almost three-fold rise in the country – but Ghosh expects India to go fully EV only after 2030.

"The adoption and growth enablers for EVs are different for the different vehicle categories. The 2W and 3W categories are seeing a faster acceptance propelled by Central & State government subsidies, high fuel prices, and wider product availability," he said. "Whereas the PV category is slow on EV acceptance, even though high fuel price is forcing customers to look out for cheaper alternatives, product availability, and weak government subsidies for the category act as impediments."

The analyst added that amid the ambitious plans of EV makers, he is expecting the passenger vehicle segment to have higher EV shares in the mid to longer terms. "But for EVs to become the 'majority' propelling technology in the PV category, we do not expect it to happen by 2030."

Meanwhile, Many American EV makers, including Tesla Inc TSLA, Fisker Inc FSR and Triton EV, are gearing up to enter the Indian market.