LG Energy Solution Ltd. (LGES) has set its sights on the booming Indian electric vehicle (EV) market dominated by two-wheelers, which is projected to grow tenfold by 2030.

Having already established a sales agency in New Delhi last February, the South Korean company plans to supply cylindrical batteries to India’s two largest EV manufacturers.

According to industry sources on Tuesday, LGES is set to supply its cylindrical batteries to Ola Electric and TVS Motor, the top two EV companies in India, both specializing in two-wheeler production.

India, with a population nearing 1.43 billion as of May this year, exhibits a higher preference for two-wheelers and three-wheelers due to its high population density and the existence of unpaved roads in many parts of the country.

Out of the EVs registered last year, 64 percent were two-wheelers, while three-wheelers accounted for 32 percent, and four-wheelers constituted a mere 4 percent.

Though not as vast as China, the U.S., or Europe, India is considered a region with highly rapid growth potential as an EV market. According to the country’s transport ministry, EV registrations there surged from 120,000 units in 2020 to 320,000 units in 2021 and are expected to reach one million units in 2022. Forecasts even suggest that the number could soar to 10 million units by 2030.

Given the promising growth prospects, global automakers are also stepping up their game to enter the Indian EV market. Reuters reported that Tesla is in discussions with the Indian government regarding its investment plans. Tesla is contemplating building a factory in India to produce about 500,000 EVs annually, priced at around 25 percent lower than the current Model 3. Similarly, Chinese EV and bus manufacturer BYD announced plans to invest $1 billion in building EV and battery production facilities in India. However, the investment approval has reportedly been delayed due to ongoing tensions between India and China.

“India imposes high tariffs, as much as 70 percent, on imported EVs, making local production essential. As various global automakers enter India, the demand for batteries is expected to surge,” said an industry insider.

By Song Min-geun and Minu Kim

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