EV in India
Overview
- Electric Vehicles are increasing in adoption in India. 4 wheelers from prominent manufacturers like Tata, MG
- 2 wheelers from renowned firms like Hero and startups like Ola, Ather
- Government incentives with FAME II to facilitate adoption and production
- But sales of EVs account for around 1% of total sales
- EV buses in use for intracity and trial run between cities have been conducted
- Amazon working towards e-mobility in last-mile delivery
Market Scenario
Market Drivers
- Increasing petrol price
- Government incentives for EV production/buying
- Guidelines for chargers at Residential spaces
- Reduced import duty on EV components
Government Boosts
- FAME II scheme allotted 86% budget to increase demand for electric vehicles via a price reduction
- Central Government Incentive scheme for local battery production
- Kerala aims to put one million EV units on the road by 2022 and 6,000 e-buses in public transport by 2025.
- Telangana aims to have EV sales targets for 2025 to achieve 15% electrification of all vehicles.
Market Restraints
- Charging infrastructure
- Pricing
- Restricted Range
- Charging time
Segments
Vehicle Type
Passenger Cars
Tata Nexon, Mahindra and MG have passenger cars available on market.
Cheaper car, higher range or business models to mitigate range and other caveats of EV
Infrastructure requirements make a high barrier for entry making this a less favourable investment
2/3 Wheelers
2 wheelers is a hotly contested segment with Hero, Ather and witnessing high consumer adoption
3 wheelers majorly lead-acid battery run with Bajaj and Tata offerings
Supply chain and transport needs have been marketed for faster, compatible 3 wheelers
2 wheelers are yet to combine speed/range and price to replace traditional vehicles at scale
3 wheeler space with lease based approach could enable Li-ion vehicles adoption for better speed/range
2 wheeler space, with tech/pricing advancement, can potentially break the existing competition
Commercial Vehicles
EV buses are in use in certain cities across India for inter and intracity
Pickup trucks are meagre. Intracity multiple trips and intercity are still challenging for buses with battery and charging time constraints. Similar to pickup trucks
With suitable technology/logistic breakthroughs, one can adapt these vehicles for supply chain/transport uses negating range limitations
Power Source
Hybrid
Prominent offerings across price and companies, like MG, Toyota, primarily using an electric motor for initial torque.
PHEV (Plug-in Hybrid) vehicles are an interesting option that isn’t explored yet and could bridge as a transition in short term future
Battery Powered
With range, battery being a concern, pure electric vehicles could see greater application based on just vehicle type and use case. Replaceable battery run vehicles could open new opportunities
Secondary Industries
Battery/power innovation
Higher density batteries, replaceable batteries or other technologies to power vehicles in a cleaner, greener and economical manner could be a potential investment
Charging network startups
In association with manufacturers and government, establishing a charging network as a service could enable greater adoption and greater use of charge network as well
Individual components of EV — Motor, IoT Sensors, Drivetrain
Startups providing a technological or business model edge in Motor, IoT sensors for analysis/added features to vehicle and drivetrains could be a potential investment
Alternate Energy
India is still primarily driven by non-renewable energy sources (63%). Alternate energy investments could be a potential breakthrough
Conclusion
- 2 wheelers are the hottest segment with multiple competitors but positioning and innovation could make an investment fruitful
- 3 wheelers, especially with commercial application combined with logistic management could make for great business
- Intra-city bus adoption is positive, the next target is being inter-city travelable but upfront capital could deter entrants
- 4 wheelers with competitors, lack of adoption and huge capital requirement make it a less preferred investment choice unless driven by novel tech/business model
- Charging Network startups with novel technology could blitz scale with company partnerships to ease customer adoption of EV
- Replaceable battery technology could also be a model to address range/charging time concerns across vehicles
