Two wheelers and three wheelers are the two vehicle categories that are getting electrified in India first. Recently, the 8th edition of EV Expo in New Delhi also had players in 2W, 3W and battery tech category as its brightest shining expo stars.
Exciting two wheeler Indian startups like Ather Energy, Twenty Two Motors, Ultraviolette, have invested millions in the R&D and also many years into developing their first mass-production-ready products. Locally imagined products have seen some of their first launches in 2018, and have settled for the upper market segment with premium prices. To compete in this market, local assembling units like Okinawa and other lesser known localized players, who import CKDs from China and assemble, offer their products at much more competitive prices, occupying the lower value market segment. Electrified two wheelers have been the most bubbling products this year.
In the three wheeler space, Mahindra is taking a lead with its product range Treo. In the large EV category of rikshaws, none of the Indian players are offering indigenous products. The challenge is that the category is ultra price-sensitive and Indian startups or bigger OEMs don’t find to be an attractive market entry opportunity, thus leaving space for overseas competition to flood the market with subpar quality. In this category, numerous localized players are assembling Chinese CKD imports.
As for the lithium ion batteries, hardly one or two companies are in the process of building their facility for manufacturing a cell. The most popular way of producing battery packs for the India market is buying the single cells abroad and assembling them into packs locally, as lithium is not a metal that would be indigenous to India. The Battery Management System, or BMS, is the brain of the battery. Many companies are following the principle that if you can own and improve the brain, sourcing the hardware and cells from vendors can result into a cost effective, yet efficient, solution.
Across the globe, four wheeler cars apart from public transport is the fastest growing category for electric vehicles. However, Indian electric car space is limited to Mahindra’s and Tata’s where not much new was announced during 2018. In public transport category, there is battle between Tata Motors, Ashok Leyland and Goldstone-BYD to win state or city projects for electrifying the bus fleets. The government also released its Public Charging Infrastructure policy last month. Some manufacturers, like Exicom, are making chargers in India and installing them for government projects whereas others are importing from China and reselling.
The largest current challenge for the industry in India is that big players are waiting for policies to stabilize, technology to evolve and customers to adopt before they sign off big investments in the electric vehicle business unit. The young startups are working to develop new technologies, but the process in itself is time and resource consuming. This is leaving room for other market entrants to gain early mover’s advantage. The adoption rate for EVs in India is expected to see a surge around 2021-22. Let’s hope Indian players prepare indigenous technologies and capabilities to be able to occupy the mark
Aurora Ventures offers supply chain support and consulting from China for Electric Vehicle companies. Get in touch at firstname.lastname@example.org to know more.