New Delhi: The Indian vehicle market’s electrification has been swift, thanks to OEMs taking risks, building scale and investing in R&D to achieve global competitiveness.
In this journey, the government’s role as a key motivator and facilitator has also been critical, according to the EV industry’s stalwarts who gathered for the eighth two-day ETAutoEVC in New Delhi on Wednesday.
Vinnie Mehta, Director General of ACMA, said that electric vehicles are either already at 5% or inching towards the 5% mark in most categories and 5% is usually an inflection point for any industry. In all, India is inching towards the three million units mark for total EV sales.
Naveen Munjal, MD of Hero Electric Vehicles, pointed out that sales of electric two wheelers (E2W) were over four lakh units in the first six months this year, making the two wheeler category the fastest growing among all vehicle categories in the electric vehicle pecking order.
With prices of some key components, specially batteries, already falling, he said, “the trend from here on would be on increased electrification of the two-wheeler ecosystem”.
Diego Graffi, Chairman CEO and MD of Piaggio Vehicles, said India has a very fertile ecosystem to nurture EVs and commended the government’s push and support for wide electrification in the market.
In the EBus category too, market penetration has increased swiftly, said Aanchal Jain, CEO of PMI Electrop Mobility Solutions. She said that there is a rather strong support from the government for E-buses and this has helped taking them to tier II and tier III cities, as well as remote areas in India.
Samir Yajnik, CEO and ED of Electra EV, pointed to a positive trend in the three-wheeler space – beginning of standardization of powertrains through standardisation of battery pack size, motors etc. This would lead to cost optimization and acceleration in EV adoption. Vivek Vikram Singh, MD and Group CEO of Sona Comstar, said that the three-wheeler industry would likely lead the 100% electrification race, with LCVs (below one ton) and buses following closely behind, followed by two-wheelers.
Policy certainty
Now, as the industry continues to build scale and innovate, forging global partnerships and exploring newer sourcing avenues across the world, many OEMs are looking for policy certainty within the country to expand their portfolios further.
It is pertinent to mention here that the purchase subsidy scheme of the government, Faster Adoption of Manufacturing of Electric and Hybrid Vehicles (FAME) II, is scheduled to end by March next year. And while there is talk of another edition of FAME coming along subsequently, there is no clarity till now about either the scope of the next edition of FAME or its timeline.
Even in the on-going FAME II, events overtook its implementation so that subsidies for electric two-wheelers were slashed mid-way, creating a turbulence in the cost dynamics of electric two-wheelers vis-a-vis ICE vehicles. This, along with the alleged subsidy misappropriation instances, slowed down sales of E2Ws. A senior industry analyst said that sales of E2W are now recovering though the numbers during the recent festive season were well below expectations.
Rakesh Sharma, Executive Director, Bajaj Auto, pointed out that purchase subsidy schemes like FAME distort the market “and makes it very difficult for OEMs, dealers and others in the value chain to take long term investment calls…the government is, of course, driven by other considerations such as bringing down pollution and controlling the oil import bill… but industry now needs policy certainty. Policy certainty and its longevity is more important than even the quantum of subsidy available “.
Chinese dominance
China continues to rule the global supply chain for critical components and even technologies in the EV space. Nishant Arya, Vice Chairman of the JBM Group, said that while China has done many things right to be able to scale up, the Indian ecosystem needs to adopt benchmarking to see what China did right and adopt those practices.
There is every hope that India will compete effectively with its neighbour: Arya pointed towards impending Free Trade Agreements (FTAs), the emerging Global South geopolitics and increasing number of globalectricl strategic partnerships by Indian OEMs besides the famous Indian frugality as effective tools to beat China at its own game.
Kaushalya Nanda Kumar, COO, Mahindra Electric, said, “ we can beat China by creating products which are global in nature and gain scale by leveraging global collaborations.”
