India is the largest market for three wheelers and the penetration of electric three wheelers (e3Ws) has been rising rapidly in this category. While the market is dominated by legacy players Bajaj Auto, Mahindra & Mahindra and Piaggio, Altigreen Propulsion Labs is slowly inching forward with its all-green portfolio. It held 11% share of the market in FY24. In an interview with ETAuto’s Contributing Editor Sindhu Bhattacharya, Amitabh Saran, Founder & CEO speaks about Altigreen’s continued focus on profitability, cost advantage of electric versus ICE and much-needed policy initiatives. Excerpts:
India is expected to lead the world in electric three wheeler market expansion. Why is the e3W segment poised for exponential growth, who are the major players and what is the expected CAGR till 2030?
The global three-wheeler (3W) market is geographically highly concentrated, with India and China together accounting for 95% of all electric and 80% of conventional three-wheeler sales. In 2023, India overtook China to become the biggest market for e3w with over 580,000 sales, an increase of 65% over 2022 due to favourable government policies for EV demand generation.Three-wheelers in India are categorised into L3 and L5, differentiated by power delivery. The L3 segment has more or less already transitioned from ICE to electric. In L5, the penetration of electric is about 25% for cargo and 15% for passenger variants. E3ws have a Total Cost of Ownership (TCO) benefit of about 40% over their ICE counterparts, which acts as the primary stimulus for the shift. The question of product performance is now a thing of the past, and therefore, there is no reason for penetration not to increase from current levels to 80-90% by 2030. If this happens, we expect the electric three-wheeler market to grow at a CAGR of approximately 35%.In which segments of the electric three wheeler market is Altigreen present in, what’s the company’s market share in each and what is the targeted share by 2030?
Altigreen products fall under the L5 category. We are present in both the cargo segment (with products offering short and long range and fast charging) and the passenger segment. We closed FY24 with an 11% market share in L5 cargo, and we anticipate reaching at least 25% of the total L5 sales by 2030.
By when is Altigreen entering the passenger 3w segment? What is the potential for growth in the passenger segment, by itself and in comparison to cargo?
Historically, L5 passenger sales constitute approximately 75-80% of the yearly L5 3W sales. It is therefore imperative from a business standpoint to be present in the passenger segment. This segment is further divided between narrow (urban cities) and wide (shared passenger) body. We are already present in the wide body passenger segment, with our product being one of India’s first electric vehicles available in this segment, launched earlier in 2024. Regarding the D+3 narrow body, we are planning to launch the product by early FY26.
With some legacy OEMs revving up their game in e3Ws and having more resources, better distribution/manufacturing might, what would be the strategy of Altigreen to carve a niche for itself?
EVs by Altigreen are designed to allow the ability to customise the product to fulfill customer needs. We are well-placed to compete with anyone due to our proprietary drivetrain – motors, electronics (MCU & VCU), software, battery & BMS. All components are designed for end-user needs, and manufactured by Altigreen. This is why we have 14 variants of our cargo vehicle, to cater to the various mobility needs of our customers, be it volumetric capacity or long range or high speed. Vehicles built using these components are “differentiated” from the pack. A classic example is the shared passenger EV intended for semi-urban / rural markets, which is bringing much needed relief to towns & villages with uncertain, diesel-only, mobility.
Our future vehicles, both in cargo & passenger segments, will continue to drive differentiation from the “norm” established by the fossil-fuel / incumbent OEMs. Another area is our personalised customer support. We believe in the “replace first, analyse later” approach which ensures that our customers’ livelihood is not impacted due to any breakdown. The uptime of our vehicles is by far the highest in EV 3Ws.
What is the update on the next round of funding for Altigreen, how much money is being raised and who all are the likely investors?
We are in the midst of our Series B fund raise and will update you as we get to closure.
Who all are the current investors in the company, what is their percentage shareholding and is any existing investor looking for an exit?
We have had angel investors and family offices investing in Altigreen between 2013 & 2020. We raised our Series A of INR 292 cr in 2021-22, which was backed by Sixth Sense, Xponentia, Reliance, Accurant (US) and Momentum (Singapore).
Some of the big names in the electric two wheeler market have decided to take the IPO route to raise funds. Is this route also under consideration by Altigreen?
The path to an IPO is typically taken to fulfill capital requirements for growth/scale. Altigreen’s current focus is on creating a path to profitability, while we continue to cement our position in the market. We intend to address new markets (including exports) and new products are planned in the next 2 years, which is the reason (in part) for our Series B raise. Altigreen will pursue the IPO route, for future growth, in the next 3 years.
What, according to you, are some critical policy initiatives the government needs to take to propel the e3W industry?
The government of India has played a pivotal role in expediting the adoption of EVs in the country, so a big shout out to them. Various schemes, such as PLI, ACC, and PME, which drive demand-side incentives and build charging infrastructure, have acted as catalysts to spur demand. This, in turn, has had a ripple effect, with the industry waking up to the potential business opportunities. Electric three-wheelers ensure 40% higher TCO benefits (compared to diesel), reduced driver fatigue (allowing them to drive more kilometres) and thus higher earnings for them. Thus, e3Ws are expected to have the highest penetration, reaching up to 80% by 2030, much higher than any other mode. We believe that a favourable policy for three-wheelers in particular, especially in the vehicle financing area (for instance, backing a loss pool to allow commercial banks / NBFCs to offer loans at rates comparable to 2 / 4 wheelers), could guarantee the EV adoption.
Additionally, the exclusion of startups from the PLI scheme offers an unfair advantage to existing large OEMs, which needs to be addressed by the MHI, GoI. It would also help if the inverted GST structure could be simplified (akin to a bank passbook), which could help the smaller OEMs.
