Indian Electric Vehicle (EV) Growth Opportunities

India’s move to electric mobility might result in a USD 206 billion market potential by FY30. EV production accounts for the lion’s share of this opportunity. India’s automobile sector is the world’s fifth largest, with plans to become the third largest by 2030. Reliance on traditional modes of fuel-intensive mobility to cater to a large domestic market would not be sustainable. In order to solve this, federal authorities are designing a “Shared, Connected, and Electric” mobility alternative, with an ambitious goal of achieving 100 percent electrification by 2030.

Definition / Scope
Market Overview
Market Risks
Top Market Opportunities
Market Drivers
Market Restraints
Industry Challenges
Technology Trends
Pricing Trends
Regulatory Trends
Post COVID-19 Recovery
Market Size and Forecast
Market Outlook
Technology Roadmap
Distribution Chain Analysis
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References
Further Reading
Appendix

Definition / Scope

India’s automobile market, which is the world’s fifth largest, generates around 7% to 8% of the country’s GDP. Given its deep ties with micro, small, and medium enterprises for vehicle production and opportunities for technological innovations in the coming decade, the EV sector can be a key driver of this growth.

The lion’s share of this opportunity lies in sales, repair, and ancillary services like vehicle insurance. According to the CEEW-CEF, this may result in an additional USD 177 billion in revenue for automobile makers by FY’ 2030.

Across the globe, countries are making the move to electric transportation. Concerns about climate change, energy security, and local air pollution caused by the usage of internal combustion engine (ICE) based cars are the main drivers for the switch. The transition to electric mobility in India might result in a market opportunity worth USD 206 billion by FY30.

Now is an excellent time to put in place policies to support the development of the EV ecosystem, as EVs have begun to make more economic sense than ICEs. Above all, India’s EV sector has the potential to contribute significantly to domestic value addition and job generation, as well as support the country’s post-COVID-19 recovery.

Market Overview

The Indian Electric Vehicle Market was worth USD 5 billion in 2020, and it is predicted to grow to USD 47 billion by 2026, with a CAGR of more than 44% over the forecast period (2021-2026).

India’s automobile sector is the world’s fifth largest, with plans to become the third largest by 2030. Reliance on traditional modes of fuel-intensive mobility to cater to a large domestic market would not be sustainable. In order to solve this, federal authorities are designing a “Shared, Connected, and Electric” mobility alternative, with an ambitious goal of achieving 100 percent electrification by 2030.

India stands to gain on many fronts by shifting to electric vehicles (EVs): it has a relative wealth of renewable energy supplies and qualified workforce in the technical and manufacturing industries.

According to an independent analysis conducted by CEEW Centre for Energy Finance (CEEW-CEF), India’s electric vehicle market will be worth US$206 billion by 2030 if the country meets its ambitious 2030 objective. This would necessitate a total investment in car production and charging infrastructure of about US$180 billion.

The COVID-19 epidemic has had an influence on the Indian electric vehicle market, causing supply chain disruptions and the closure of manufacturing units as a result of ongoing lockdowns and travel restrictions across the country. In India, however, the electric vehicle (EV) sector is still in its infancy. Due to several government programme and policies, it is predicted to expand at a considerably quicker rate during the forecast period.

According to a report from the India Energy Storage Alliance (IESA), the Indian EV market will develop at a CAGR of 36% until 2026. During the same time period, the EV battery market is expected to develop at a CAGR of 30%.

To lower their carbon footprint, e-commerce companies (such as Amazon) are launching initiatives to deploy e-Mobility for last-mile delivery. India is experimenting with e-Mobility for public transportation, and electric intercity buses have been deployed in several major cities. Furthermore, state governments are actively involved in the implementation of legislation that encourage the use of electric vehicles. For instance,

Kerala wants to have one million electric vehicles on the road by 2022 and 6,000 electric buses in service by 2025.
Telangana wants to attain EV sales objectives of 80 percent two- and three-wheelers (motorcycles, scooters, auto-rickshaws), 70 percent commercial automobiles (ride-hailing businesses like Ola and Uber), 40 percent buses, 30 percent private cars, and 15% electrification of all vehicles by 2025.

Following the launch of the FAME India plan, which aims to transition toward e-mobility in the light of expanding international policy commitments and environmental difficulties, the EV market in India has gained substantial traction. Furthermore, India has the world’s largest untapped market, particularly for electric two-wheelers. The automatic route market is likely to gain traction throughout the forecast period due to the fact that 100 percent foreign direct investment is permitted in this sector.

Market Risks

The Major Risks posing as threat to the growth of the Electric Vehicle (EV) Market in Thailand include:

Hurdles to market penetration

For EVs to successfully penetrate the car sharing market, there will likely be a requirement for larger batteries and a more extensive network of fast chargers. Alternatively, car sharing companies could consider developing hubs, where cars are stored in designated spots with their own charging infrastructure, allowing for slower and less costly overnight charging. In order to effectively meet the operational requirements of taxis and ride hailing fleets, manufacturers will have to consider providing more seat capacity and trunk space.

Charging Infrastructure

Until there are enough fast chargers to prevent drivers from incurring losses due to long charging times and searching for available public charging stations, charging infrastructure will be a limiting factor yet again.

Top Market Opportunities

The top opportunities for new-entrants in the Electric Vehicle Market in India are

World’s Largest Untapped Market

Regardless of the country’s lofty goals, India’s electric vehicle industry is still in its infancy. However, when viewed from a different perspective, India is the world’s greatest unexplored market, particularly in the two-wheeler segment. Under the automatic approach, 100 percent foreign direct investment is permitted in this sector.

Leading companies such as OLA Electric Mobility Pvt, Ather Energy, and Mahindra Electrics are rapidly expanding their market presence in response to the opportunity that India’s EV industry affords. Furthermore, governments such as Karnataka and Tamil Nadu are enacting innovative and timely investor-friendly laws in addition to constructing required infrastructure.

Small commercial vehicles are driving the country’s electric car revolution. According to CRISIL Research, electric two- and three-wheelers will continue to grow, with 12-17 percent of new vehicle sales for electric two-wheelers and 43-48 percent for electric three-wheelers expected by 2024, while the share of electric vehicles (EVs) in the four-wheeler space is expected to remain low in the next five years.

Supportive Government Policies

The federal government is also putting a premium on sustainable mobility, as evidenced by recent amendments to the FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India) scheme to make electric two-wheelers more affordable.

The government has also launched a Manufacture-Linked Incentive Scheme (PLI) for ACC Battery Storage Manufacturing, which aims to encourage domestic battery production and minimize reliance on imports. This will provide the necessary infrastructure for the EV industry, lowering the cost of EVs dramatically. Many renowned battery manufacturers, such as Amara Raja Batteries, are taking cues from these incentives to orient new investments into green technologies, including in lithium-ion batteries.

Recycling of lithium-ion batteries in India- $1,000 million opportunity

In the next five years, India’s lithium-ion battery market is predicted to rise dramatically. National Electric Mobility Mission Plan 2020, with a prediction of 6-7 million electric vehicles on Indian roads by 2020 and a target of 175 GW renewable energy installation by 2022, is one of the significant measures by the Indian government that will drive the growth of this sector. According to Reogma, the annual lithium-ion battery market in India would grow at a 37.5 percent compound annual growth rate (CAGR) to reach 132 GWh in 2030. The global lithium-ion battery market is expected to grow from 2.9 GWh in 2018 to almost 800 GWh by 2030.

Shared Electric Mobility

India’s public transportation networks are among the most widely used in the world. As a result, shared electric mobility has a chance to acquire traction in India’s electric car market by satisfying the growing demand for transportation systems. Because of increased connectivity, new business models, and rapidly lowering technological costs, mobility systems are undergoing transition. Ola Cabs and Uber are two famous examples of business models that provide shared electric mobility options.

India stands to benefit greatly from widespread use of e-mobility. Manufacturing of e-vehicles and their associated components is predicted to boost the percentage of manufacturing in India’s GDP to 25% by 2022 under the Make in India programme.

Electric vehicles, charging infrastructure, e-mobility service providers (car sharing, rentals, etc.) and laws make up an integrated e-mobility ecosystem. Ola, a ride-hailing service, recently unveiled its ‘Mission: Electric,’ a plan to put one million electric vehicles on the road by 2021.

Market Drivers

The Key factors driving the growth of the Electric Vehicle Market in India are

Low cost of ownership

Many studies have shown that electric vehicles have a lower lifetime cost of ownership than gasoline-powered automobiles. When compared to a fossil fuel car, the cost of ownership for an EV might be as low as 27%. The constant rise in the price of gasoline and diesel is driving up the cost of ownership for traditional automobiles even more.

Because the price of gasoline has already surpassed the INR 100 level, conventional vehicle owners’ concerns have grown even more. As Price of petrol has already touched the INR 100 mark, it has already added woes for the conventional vehicle owners.

Rationalization of Taxes and Duties

The government has reduced the customs charge on EV components imported to 10-15%. EV components imported for assembly in India have so far been subject to a 15-30% import charge. However, as a result of this change, completed parts and components will now be subject to a duty of 15% to 60%.

The Goods and Services Tax on lithium ion (Li-ion) batteries has also been reduced from 28 percent to 18 percent by the government.

Public-Private Partnership

The National Institute of Transforming India (NITI) Aayog has released a sample public-private partnership (PPP) concession agreement for the operation and maintenance of electric buses in Indian cities.

Under this approach, the concession holder will be responsible for capital expenditures (CAPEX) for the purchase of electric buses as well as operation and maintenance infrastructure, while the authority will be responsible for operational expenditures on a per-kilometer basis.

Phased Manufacturing Program

The government has proposed a tiered manufacturing roadmap to develop a manufacturing environment in the country to support domestic manufacturing of electric vehicles.

The government has imposed a 15% customs levy on parts used to produce electric vehicles, such as AC or DC charger and motor, energy monitor, brake system for recovering, electric compressor, power management unit, and others, as part of the phased production proposal. From April 2021, a revised PMP duty has been proposed. There is currently no tariff on these parts.

Market Restraints

The Primary Factors hindering the growth of the Electric Vehicle Market in India are

Insufficient charging infrastructure

In India, EV charging infrastructure has always been a major issue. The absence of charging infrastructure, combined with a lack of space, makes the problem appear to be massive. In 2021, India has only 18,000 charging stations, compared to 0.8 million in China. One of the main reasons why customers are hesitant to buy electric vehicles is a lack of charging infrastructure. The average distance between two electric car charging stations is 3.8 miles, with some areas having a gap of up to 47 miles.

The shortage of private parking spaces is also mentioned, in addition to the absence of charging stations. According to studies conducted by Maruti Suzuki, 60% of Indian consumers do not have their own parking place. “They have no way of charging the vehicle, so switching to an EV is difficult.”

High costs

Along with range anxiety (kms/charge), the current high price of EVs is a big worry among potential customers. Electric cars in the same segment tend to be more expensive than lower-end (internal combustion engine) ICE cars. This is primarily due to the increased expense of the technology used in EVs, which accounts for a significant amount of the cost, leaving little room for other features often seen in luxury vehicles. With improved R&D and market competitiveness, it is envisaged that the pricing factor will be rationalized in the future to fit price sensitivity, which is a primary factor affecting purchasing in India, particularly in the lower-end car category.

The major factors contributing to the high cost of the electric vehicles in India include

Electric cars have not reached economies of scale mark
Almost 100% need to be manufactured by single vendor with very minimum suppliers, which raises capital costs for the main vendor
High cost of Lithium-Ion battery – almost 50% of cost
Reliance on imports of battery as well as other components is also one of the factors adding to the cost of EVs in India.

Grid challenges

Another concern is the cost of charging electric vehicles at private charging stations once they become commonplace. According to Brookings India, even with a decent penetration of EVs, the increase in electricity demand is expected to be around 100 TWh (tera watt-hours), or roughly 4% of total power generation capacity, by 2030. As a result, expanding power producing methods is required to fulfil the increased demand.

Majority of EVs are not covered under FAME scheme

The Indian government has made an effort to promote electric mobility in the country by providing incentives and discounts for electric vehicles. The FAME scheme’s terms and criteria do not support the majority of electric vehicles. FAME does not cover low-speed electric two-wheelers or lead-acid battery-powered EVs. High-speed EVs, on the other hand, demand a registration fee and a driver’s license. As a result, many buyers are hesitant to purchase electric vehicles.

Industry Challenges

The major challenges faced by the Players in the Electric Vehicle Market in India are

Range anxiety

One of the most significant difficulties ahead of India’s electric vehicle growth route is range anxiety. Customers of electric vehicles are frequently concerned about the vehicle’s ability to get from point A to point B before the battery runs out. This issue is inextricably linked to India’s limited charging infrastructure. In comparison to petrol pumps, India’s electric charging infrastructure is woefully inadequate. Furthermore, electric vehicle charging outlets are only found in urban regions.

Consumer perception

In India, consumer perceptions of electric vehicles are still negative when compared to conventional vehicles. Range anxiety, a lack of charging infrastructure, a large price difference between EV and ICE vehicles, and a lack of confidence in a satisfactory resale value are all factors. Despite the fact that Indian customers are growing more open to adopting e-mobility than in the past, there is still a negative view about EVs.

Scarce battery technology

For electric vehicles, the lithium-ion battery is the most popular and widely used power source. Lithium is not produced in India. Li-ion batteries are also not produced in the country. India’s reliance on imports for EV batteries has resulted in exorbitant prices for these critical components and, eventually, EVs.

Lack of products

If you want to buy a traditional gasoline-powered automobile or a two-wheeler, you have hundreds of possibilities. In the EV segment, the situation is radically different. There are only a few possibilities, and the most of them are not from well-known names. This discourages buyers from purchasing electric vehicles.

Technology Trends

Technology is the fuel that drives the growth of the Electric Vehicle (EV) Market in Thailand and the emergence of Disruptive technologies has significantly influenced the growth of the Electric Vehicle Market in India, some of the key technologies shaping the emergence of Electric Vehicle Market in India are

Mobility as a service

As people became more accustomed to ride-sharing apps, a car-sharing business model arose. Companies allow drivers to rent cars by the hour, unlock them remotely, and operate them. While car sharing is not a new concept, the growth of electric vehicles adds to more complex and value-adding services.

According to BMW, younger city dwellers are increasingly prioritizing mobility over outright vehicle ownership. Consumer vehicle ownership in metropolitan areas may drop as autonomous driving technologies advance, being replaced by commercial services that provide driverless mobility as a service. As a result, fewer parking places would be required, resulting in significant cost savings.

For Instance, Ola, a ride-hailing service, recently unveiled its ‘Mission: Electric,’ a plan to put one million electric vehicles on the road by 2021.

Electrifying ICE

EVs have become so popular that even established ICE behemoths are considering making their ICE-powered vehicles hybrid or entirely electric. EV design teams are going beyond EV-only products to capitalize on this trend. The best is employing powerful PLM technologies to figure out how to work smarter, assessing their designs and modelling a variety of situations to understand how their concepts may be quickly and efficiently converted for ICE-to-EV conversions.

In August 2021.Bounce, a ride-sharing startup has ventured into electrifying its two-wheeler fleets from the traditional ICE model.

Alternative Battery Technologies

Until recently, there had been few and minor advancements in electric vehicle battery technology. Lithium-ion batteries are still the most common large-pack battery technology, and their high costs have caused significant problems for automobile OEMs in making EVs a financially viable alternative for customers. According to BloombergNEF, lithium-ion battery prices have plummeted by 85 percent from 2010 to 2018, and will continue to fall to roughly a third of their present price by 2030, as EV economies of scale begin to take hold.

Alternative battery technologies, such as solid-state, graphene polymer, fuel cell, and aluminum ion, show how the EV market has sparked innovation after years of stagnation in battery research. As various technologies compete for the optimal combination of manufacturability and value,

Pricing Trends

It is expected that the Increased competition, the arrival of charging stations, and lower production costs would bring down the price of an electric vehicle (EV) to a more affordable 1 million baht within 3-5 years.

In India, there are currently nine electric automobiles available for purchase. The Strom Motors R3 is the cheapest electric car in India, while the Mercedes-Benz EQC is the most expensive. Hyundai Kona Electric 2021, Mercedes-Benz EQA, and Volvo XC40 Recharge are among the next electric cars in India.

MODEL	EX-SHOWROOM PRICE
Audi e-tron	Rs. 99.99 Lakh – 1.17 Cr* (US$ 134,657 – 161,588)
Tata Nexon EV	Rs. 13.99 – 16.85 Lakh* (US$ 18,852 – 22,689)
Jaguar I-Pace	Rs. 1.05 – 1.12 Cr* (US$ 141,000 – 151,000)
Strom Motors R3	Rs. 4.50 Lakh* (US$ 6,059)
Mercedes-Benz EQC	Rs. 1.06 Cr* (US$ 141,200)

Regulatory Trends

With its consumer-friendly EV laws, India’s government is laser-focused on achieving its lofty goal of being an all-EV nation by 2030.The government has launched many efforts, like the Go Electric campaign and the FAME scheme, in order to build a strong e-mobility ecosystem in India.

When the government announced the National Electric Mobility Mission Plan (NEMMP) 2020, the EV industry received a substantial policy boost. 4The National Electric Mobility Mission Plan (NEMMP) 2020 was announced by the Indian government in 2013 with the goal of achieving national fuel security by promoting electric and hybrid vehicles.

The government launched the FAME plan (Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles) as part of the NEMMP. The programme offers upfront incentives for electric vehicle purchases as well as funding for the implementation of charging infrastructure.

Post COVID-19 Recovery

The original outbreak of COVID 19 had brought the entire ecosystem to a standstill, halting the development and sale of new automobiles all over the world. OEMs had to wait for the lockdowns to be released before they could resume production, which had a negative impact on their operations. As a result, automakers had to modify their manufacturing volumes. Component production was also halted, and tiny Tier II and Tier III manufacturers encountered cash flow problems. The automotive sector is a high-capital-intensive industry that requires periodic funding to stay afloat. As a result, the production halt during the early months of the outbreak, along with weaker demand, had an extraordinary impact on EV producers in the early months.

Many countries have imposed a complete lockdown for more than two months as a result of the COVID-19 pandemic, which has had an impact on vehicle production. Manufacturing plants all across the world have been shut down, and automobile sales have plummeted. The majority of automakers, on the other hand, resumed vehicle production with limited capacity and the appropriate safeguards in place. Conditions improved in the latter months of 2020, but EV producers did not suffer significantly as demand for zero-emission vehicles surged. As a result, there was a surge in demand for electric automobiles on the market.

EVs, on the other hand, saw an increase in demand throughout the Covid-19 period. As a result, there is an increasing need for electric vehicle manufacture all over the world. However, due to lockdowns and logistics issues, most enterprises’ production was hampered in the first several months. Following the lockdowns, however, demand for electric vehicles soared as governments throughout the world encouraged people to switch to low-emission automobiles. India has also boosted the number of electric vehicles charging stations and hydrogen filling stations within their territories. From June to December 2020, as well as the first few months of 2021, there was an increase in demand for BEVs, PHEVs, and FCEVs on the market.

Market Size and Forecast

The Indian Electric Vehicle Market was worth USD 5 billion in 2020, and it is predicted to grow to USD 47 billion by 2026, with a CAGR of more than 44% over the forecast period (2021-2026).

EV sales in India, excluding E-rickshaws, increased by 20% to 1.56 lakh units in FY20, driven mostly by two-wheelers. India’s EV finance sector is expected to reach Rs. 3.7 lakh crore (US$ 50 billion) in 2030, according to NITI Aayog and Rocky Mountain Institute (RMI). According to a survey by the India Energy Storage Alliance, the EV industry in India is expected to grow at a CAGR of 36 percent until 2026. Additionally, the EV battery market is expected to grow at a CAGR of 30% during the same time period.

The Indian electric car industry has been divided into three categories based on technology: battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and hybrid electric vehicles (HEVs) (HEV). In 2020, the BEV category had the greatest share of the Indian market, accounting for more than 70% of total sales. Because the government offers the greatest subsidies on the purchase of BEVs compared to PHEVs and HEVs, the BEV category is expected to continue to dominate the market in terms of both volume and value during the forecast period. Furthermore, the market is likely to profit in the future due to the availability of numerous BEV models, lowering battery prices, and cheaper upfront costs.

Electric Vehicle Sales for Fiscal Year Ending 2021

Segment	FY’ 2021	FY’ 2020	Growth (%)
Two-Wheelers	143,837	152,000	-5.37%
Three-Wheelers	88,378	140,683	-37.18%
Cars	5,906	2,804	+109.84%
Total	238,120	295,497	-19.42%

The Indian electric car market is divided into Lithium-Iron-Phosphate (LFP), Lithium–Nickel–Manganese Cobalt Oxide (Li-NMC), and other battery types. Other Li-ion-based batteries, such as Lithium–Titanate oxide (LTO) batteries, Lithium–Nickel–Cobalt–Aluminum oxide (NCA) batteries, nickel–metal hydride (NiMH) batteries, and lead acid batteries, are included in the “others” category.

Due to characteristics such as high current rating, thermal stability and safety levels, and long cycle life, the LFP battery-based electric car was the leading category in the market in 2020, accounting for almost 65 percent of sales volume.

In the Indian electric car market, Maharashtra had the largest sales volume in 2020. During the forecast period, the state is expected to remain the country’s leading market for electric cars, thanks to the state government’s Electric Vehicle Policy 2018, which aims to help the electric vehicle market grow by supporting electric vehicle manufacturing, developing charging infrastructure, and providing customer subsidies on the purchase of these vehicles. Electric car subsidies of up to $1,550 (INR 100,000) per vehicle have been announced by the state government.

Market Outlook

Over the forecast period of 2020-26, the Indian electric vehicle market is expected to grow at a CAGR of 44% to reach a Market Value of US$ 47 Billion in 2026. Electric vehicles are becoming more popular as a more environmentally friendly means of transportation all around the world. India’s demand for electric vehicles is increasing as a result of favorable government policies that encourage the usage of electric vehicles. The government has implemented a number of laws to boost the availability and usability of electric vehicles, hence promoting the market’s growth in India. Over the foreseeable period, however, a scarcity of charging stations and high purchase costs may stymie the growing demand for these vehicles.

The federal think tank Niti Aayog produced a paper titled “India’s Electric Mobility Transformation” in April 2019, estimating that by 2030, EV sales penetration in India will be 70% for commercial vehicles, 30% for private vehicles, 40% for buses, and 80% for two- and three-wheelers. If met, these goals might result in a net reduction of 14 exajoules of energy and 846 million tonnes of CO2 emissions throughout the lifetime of the deployed cars. Electric vehicles sold until 2030 can save 474 million tonnes of oil equivalent, or US$207.33 billion, over their lifetime.

In terms of technology and environmental challenges, the automotive sector is fast evolving. Electric vehicles were introduced as a clean energy project since they emit minimal or no emissions, and they have progressed to become an important component of OEM business strategies. To prepare for the predicted EV growth in the future, automakers are forming dedicated EV business groups. The surge in EV demand, on the other hand, will necessitate a significant increase in charging infrastructure as well as safety laws and standards.

Domestic OEMs like Tata Motors and Mahindra & Mahindra, as well as international OEMs like Hyundai and MG, have already introduced their flagship EVs to the market. They’ve set lofty sales goals and are anticipated to introduce a slew of innovative electric vehicle types (from city suited to long-range and powerful). With many new companies entering this space, charging infrastructure, which is one of the primary elements driving EV adoption, is also gaining up speed. It has enabled enterprises to present themselves as manufacturers, operators, or payment gateways, opening up new business models.

Nonetheless, while the electric vehicle industry is expanding, it still has a long way to go to meet the government’s ambitious 2030 target. The pandemic of COVID-19 not only hampered the industry’s advancement, but it also affected overall market demand.

In some categories, though, market mood has remained positive. In India, EV sales for two-wheelers climbed by 21% in FY 2020. Sales of electric buses climbed by 50% in the same time period. The market for electric automobiles, on the other hand, remained bleak, with a 5% drop. In terms of total EV sales, following a slight setback in 2020, sales appear to be steadily increasing. In January 2021, 15,910 electric vehicles (EVs) were sold in India, with Uttar Pradesh selling the most, followed by Bihar and Delhi.

Technology Roadmap

When it comes to technological disruption, the automotive sector is close to other industries. The technology trend in the automotive industry is moving toward the creation of CASE (Connected, Autonomous, Shared, and Electrified) mobility. This affects not just technical progress but also the infrastructure and service environment. As a result, automakers and car parts suppliers must step outside of their comfort zones and deal with new rivals from other sectors. Some engine and exhaust-related manufacturers, including EV manufacturers, will have to shift their focus to other items as engine and exhaust parts become obsolete.

Distribution Chain Analysis

Original equipment manufacturers (OEM) are at the apex of the supply chain, producing and marketing automobiles. They build electric vehicles with components they manufacture in-house and partially source from a network of major, medium, and small suppliers. These companies provide important components such car door modules, braking systems, and other EV-specific components.4 EV-specific components account for 60 to 70% of vehicle component costs in production, with non-EV-specific components accounting for the rest. India already has advanced domestic ICE production capabilities in all categories. The EV supply chain, on the other hand, is very different from the ICE supply chain.

The Distribution Chain of Electric Vehicle Market in India is as below

Competitive Landscape

Due to fast market growth and inexpensive and readily accessible manpower, the India EV industry is highly fragmented, with innumerable local businesses participating in the sector. New startups have gained the lead in this industry, despite existing players in the sector introducing their new model. Startups are increasing their reach by raising funding from investors and entering previously untapped markets. Companies are spending a lot of money on R&D and developing new models to establish themselves in the market.

For Instance,

in January 2020, Under the second phase of the FAME programme to promote e-mobility, India’s Department of Heavy Industries (DHI) approved 2,636 electric car charging stations in 62 cities across 24 Indian states and union territories (UTs).

In February 2021, Ather Energy, India’s first intelligence EV manufacturer, moved its USD 86.5 million factory from Bengaluru (Karnataka) to Hosur (Tamil Nadu) to increase its two-wheeler production capacity.

Competitive Factors

To achieve a competitive edge in the industry, companies are engaged in acquisitions, mergers, regional expansion, and strategic alliances.

For Instance, In April 2021, Sterling and Wilson Pvt Ltd (SWPL), India’s largest engineering, procurement, and construction firm, has announced its foray into the Indian electric mobility market. It has formed a 50-50 joint venture with Enel X to launch and build innovative charging infrastructure in India, which is incorporated on April 1, 2021.

In March 2021, Ola Electric, the unicorn Indian ride-hailing start-up, also announced that it would build the world’s largest electric scooter plant in Hosur (about a two-and-a-half-hour drive from Bengaluru) over the next 12 weeks for a cost of US$330 million, with a goal of producing 2 million units per year. Ola Electric plans to increase production to 10 million vehicles per year by 2022, accounting for 15% of the global e-scooter market.

Key Market Players

Some of the Major Players in the Electric Vehicle Market in India are

Hero Electric, a subsidiary of the Hero Group, has begun selling electric vehicles in India. In the electric car segment, the business has been a front-runner. Hero electric’s ER series (E2 series and E5 series) includes the Optima, Nyx, Flash, and Photon electric scooters.

Tata Motors recently launched the Nexon in an electric form, which also has ZIPTRON technology. The Nexon EV would be priced between Rs. 15-17 lakhs when it is released. It has also supplied Energy Efficiency Services Limited with an electric version of the Tata Tigor (EESL).

Ather Energy introduced its Ather 450 and Ather 340 electric scooter models in India, which are primarily suited for city use. Ather Energy also offers the Ather One plan, which includes free public and home charging, as well as breakdown help and unlimited broadband connectivity.

Mahindra led the way with its first and most well-known electric vehicle, the Reva. Mahindra E2o, Mahindra eAlfa Mini, Mahindra eSupro, Mahindra Treo, and Mahindra eVerito are some of the electric vans, automobiles, and e-three wheelers that the firm has offered throughout the years.

Lohia Auto offers a variety of electric scooters, electric three-wheelers, and e-autos. Lohia Auto’s Comfort E-Auto HS was unveiled at the 2018 Delhi Auto Show, with a load capacity of 40 kg and seats for five persons, including the driver.

Twenty-Two Motors is expanding its horizons in India by launching electric scooters in collaboration with Taiwanese electric two-wheeler maker Kwang Yang Motor Company (KYMCO). They’re working on solutions for everything from rapid charging to conventional charging to battery changing.

Olectra BYD claims to have sold over 100 electric vehicles across various state transportation projects in the country, making it one of the market leaders in the electric bus area. Olectra BYD provided about 40 electric buses with a total length of 12 metres for the Telegana State Road Transport Corporation.

The Hyundai KONA Electric is India’s first and only all-electric SUV, with an ARAI-certified range of 452 kilometres. Its rapid acceleration and powerful performance deliver a thrilling driving experience over long distances. The Kona is fitted with a lithium-ion polymer battery that is suited for Indian circumstances and provides good charging and discharging efficiency.

Ashok Leyland, the world’s fourth largest bus manufacturer, presented their first electric bus Circuit. Sun Mobility has partnered with the company to expand its electric vehicle expertise and introduce battery switching in electric buses.

MG Motor, unveiled the MG ZS electric car. The MG ZS has a 340-kilometer ARAI-certified range. It can be charged in two ways: with a standard 15 A AC charger, which takes roughly 6-8 hours, or with a 50 kW DC charger, which can charge the car up to 80% in less than an hour.

Strategic Conclusion

The electric vehicle category presents enormous business potential for Indian businesses across the value chain, including manufacturers, traders, and service providers. Hybrid and plug-in vehicles can help with energy security, cost savings, and pollution reduction.

In the future, e-mobility in India will not be a luxury, but rather a necessity for survival, because pollution levels are frightening, and the only solution is to employ green energy sources and transmission. As a result, EVs are unavoidable, therefore rather than avoiding the shift, it is best to prepare and manage how it will happen.

References

Appendix

EV – Electric Vehicle
CEEW – Council on Energy, Environment and Water
FAME – Faster Adoption and Manufacturing of (Strong) Hybrid and Electric Vehicles in India
PLI – Production-Linked incentive
NITI – National Institute of Transforming India
PPP – Public-Private Partnership
AC – Alternating Current
DC – Direct Current
PMP – Phased Manufacturing Program
ICE – Internal Combustion Engine
OEMs – Original Equipment Manufacturers