After Indian government adopted EV policy, the Indian electric vehicle industry saw start-up boom which contributed to the development of endless possibilities ranging from cars, sports bikes to E-bikes. Many demonstrated long range options as well as with better mileage. Key areas like battery, e-rickshaw, accessories and charging stations have been addressed well with partnerships with government, fostering paced infrastructure development. Some start ups have already been taken over by automotive giants, which clearly depicts their importance in the development of EV industry.

With the help and thrust from government policies and subsidy schemes like FAME, the business preposition in the electric vehicle market has grown specially in two-wheelers and three-wheelers market in India.

Considering the great potential of the 2- and 3-wheeler segment, the government has set a target of 30 per cent electric vehicles (EVs) on the roads by 2030. Going by the current rate of 7-8 per cent CAGR growth in automobile sales, over 46,000,000 vehicles (two-, three-, and four wheelers) could be sold in 2030. This annual market size would present an opportunity for Indian companies to become leaders in EV technology on a global scale.

The Society of Indian Automobile Manufacturers (SIAM), along with its automobile manufacturers, aims to achieve the new vehicle sales in the country to be hundred per cent pure electric vehicles (battery electric and fuel cell vehicles) on the hundredth anniversary of India’s independence (2047), with a following roadmap:

• All new vehicle sales for intra-city public transport fleets to be pure electric vehicles by 2030.
• Forty per cent of new vehicle sales in the country to be pure electric vehicles by 2030.
• Sixty per cent of new vehicle sales in the country to employ greener technologies like hybrids & other alternate fuels by 2030. Ensure smooth phasing in of pure electric vehicles and to sustain the transition to cleaner fossil fuel vehicles, the IC engine upgradation must continue over the next decade or so. Progressively cleaner fossil
  fuel vehicles would be an
  essential stepping stone in this journey towards hundred per cent pure electric.
• Finally, all new vehicle sales to be pure electric vehicles by 2047.

In the process, the Indian automobile industry also aims to become a leading global hub for design, manufacture and export of pure electric vehicles supporting the Make in India initiative.

2- and 3- wheeler segment drives EV

The electric vehicle (EV) market in India has been amped up and has seen a significant growth since past 3-4 years, especially in 2- and 3- wheeler segment. India is the world‘s largest two-wheeler market, and a leading market for three wheelers- both kinds of vehicles are heavily used for quicker mobility and for transporting smaller cargo across the country. These two segments offer a huge opportunity for electrification in India, and are likely to move towards e-mobility faster than four-wheelers. With over 95 per cent of the total EV sales came from 2- & 3- wheeler segment as on March 2018, the future remains strong for these segment taking the affordability and cost of the batteries into the consideration. Niti Aayog, a government think tank has asked auto manufacturers to convert their two-wheeler products, below the engine capacity of 150 cc into electric by 2025 while the deadline for the three-wheelers is 2023.

Naman Chopra, Director and CEO, Rexnamo Automotive, says, “Government policies are streamlined considering EVs as a mass product. Looking at the Indian customer base, there was no need to make Indian EVs into a mass product segment, rather it could have been introduced with some relaxation which the government has already extended.”

“Post 2025, we will see some emerging premium offerings in the electric vehicle segment with issues
like fast charging and charging infrastructure would have been overcome. If the prices of EV two-wheelers were less than 20 per cent, the adoption rates would have been way too different,” explains Chopra.

Chopra does not support making EVs into a mass product instead it could have been a very good line of premium product as well. Considering the current emissions, the government has taken these steps to cut down the emissions.

Anil Goel, Founder, CEEON India, explains, “Major two- wheelers manufacturers in India are still waiting to understand the overall business of EVs. We had to conduct some test runs for two years before introducing our products. On their part it is right as they have been into ICE vehicles from long. For electric vehicles, it starts from building a dedicated team and then frequently testing it as very few studies are available with the industry.”

3-wheelers ride on
convenience

The three- wheeler category is experiencing boom due to convenience of operations. The three- wheeler segment was fast in adoption due to the availability of charging infrastructure or due to the battery swapping services located nearby. Manufacturers in the segment are providing battery swapping services, making it more of a business-friendly option and keeps consumer connected with the brand. “Battery swapping is a model that consists of leasing the batteries as per their charge retention. But will not be able to function well, if customer buys the battery personally. This model requires a lot of investment and has a potential to drive consistent profits,” says Mohan Gupta, Business analyst at Omraj Autotech LLP.

New technologies are expected to be launched soon in the e-rickshaw space with the rise in adoption. Altigreen Propulsion Labs, a manufacturer of drivetrain systems for EVs have announced that it will launch drivetrain to improve e-rickshaws range by the end of the year.

Two- wheelers in need of
fast-charging

Today, two-wheelers in India accounts to a share of 79 per cent of the total number of vehicles. Though, the two-wheeler segment was the first to adopt, soon it suffered from the decline in rates. Industry experts believe that fast charging solutions and development in the battery technology will help gain back the adoptions which will act as a sea change for the EV two-wheelers.

Currently, more than 80 per cent of the cost of the EV consists of the lithium-ion battery. With faster adoption of electric vehicles and new technology, the cost of the battery packs is estimated to come down. Gupta believes, “The electric vehicles may see a growth of about 10 per cent by June 2020 as compared to June 2019. But the lead acid battery market would grow by only about 5-7 per cent. Besides, the lithium-ion batteries will grow about 20-30 per cent, by June 2020.”

With the new deadline of electrification of two-wheelers below 150 cc engine capacity by 2025, will impact Hero MotoCorp as it will take away almost 98 per cent of the company’s business. The company has engaged itself in developing innovative and advanced technologies for future mobility, including electric vehicles (EVs). It has also invested Rs 130 crore in Ather Energy, an electric two-wheeler startup. However, investing in other EV firms will not help Hero to survive the mandate. It needs to electrify its complete product portfolio to embrace the change. The scale and timing of adoption of EVs would depend
on multiple factors such as
nationwide public infrastructure for easy and convenient charging, mass consumer acceptance of products and cost implications.

According to industry analysts, only 25 per cent of two-wheelers in upto 150cc segment can be electrified, given that the sentiments remain positive, infrastructure boosts, and companies start producing EVs for market.

The current cost of the electric scooters is holding it from adoption. It is expected to be almost double that of existing ICE scooters. For example, an Activa 125 (BS-VI compliant) is expected to cost around Rs 65,000 whereas Ather Energy’s electric
two-wheeler, Ather 450 will cost
Rs 1.24 lakh.

The Chinese threat

Indian EV rickshaw makers have adopted Chinese technology to develop their own Indian versions. The core components are sourced from these Chinese makers. As imports are currently allowed by India, Chinese companies have entered the Indian market. Sunny Garg, Director, G & G Automotive, says, “The Chinese companies are sharing all the available technology for e-rickshaws. This will hamper Indian development of the e-rickshaw drive train. In order to
find a successful solution, more solutions from the Indian manufacturers will lead the way to the development of Indian EV industry.

The EV industry will have to really undergo lot of R&D initiatives to make it happen for India. Two-wheeler segment in India is very strong and to replace it completely with electric two-wheelers will be a very daunting task. More research will make the technology cost-effective. Further, the e-rickshaw segment is promising steady business, it also has room to develop better solutions for long-range plying of operations.

The battery swapping option is feasible only in the areas where there are service providers. Ideally, bringing battery swapping companies under one common platform will help to develop more effective market and reach. EV battery even after government reliefs is still expensive. Optimising cost factor will be a solution for the industry to pick up.

According to industry analysts, only 25 per cent of two-wheelers in upto 150cc segment can be electrified, given that the sentiments remain positive, infrastructure boosts, and companies start producing EVs for market.

Post 2025, we will see premium offerings in the electric vehicle segment with issues like fast charging and charging infrastructure would have been overcome. If prices of EV two-wheelers are less than 20 per cent, the adoption rates would have been way too different.”
Naman Chopra, Director and CEO, Rexnamo Automotive

“The electric vehicles may see a growth of about 10 per cent by June 2020 as compared to June 2019. But the lead acid battery market would grow by only about 5-7 per cent. Besides, the lithium-in batteries will grow about 20-30 per cent, by June 2020”
Mohan Gupta, Business analyst at Omraj Autotech LLP.