(Bloomberg) -- Electric passenger vehicle sales in India tripled last year as demand for affordable, compact sports utility vehicles surged, according to a report by BloombergNEF.

The advent of ride-sharing startups such as BluSmart Mobility, Lithium Urban Technologies and Evera, which operate all-electric fleets, has also boosted demand, according to the report published on Wednesday.  

Smaller SUVs are becoming popular as they easily maneuver through India’s potholed roads and bad traffic, while offering aspirational buyers a status symbol. Compact electric SUVs are built on small-car platforms, making them more cost-effective than larger equivalents that require bigger and costlier battery packs.

Still, India is lagging behind nations like China and the US in adopting electric transport. Most local carmakers have been hesitant to make the switch because electric cars are costlier than internal combustion engine vehicles, while lack of public charging stations also deter buyers. Electric vehicle sales in India stood at 49,800 last year, accounting for just 1.3% of 3.8 million passenger vehicles sold, according to the report. 

That has created room for foreign carmakers to expand in India’s nascent EV market. Warren Buffett-backed BYD Co. seeks to capture 40% of India’s EV market by 2030, while SAIC Motor Corp. is planning to launch three EVs by the end of 2024. 

Homegrown manufacturers are trying to catch up by increasing investments in EVs. Tata Motors Ltd., which dominates the local EV market, plans to invest $2.2 billion, while the nation’s biggest carmaker Maruti Suzuki India Ltd. has committed $1.2 billion. 

Many state-run companies and government departments floated tenders for building 593 charging stations on highways and expressways last year, according to the report. The build-out of chargers will alleviate range anxiety in consumers making inter-city trips and encourage the use of electric buses.

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