Roughly three months of countrywide lockdown, combined with zero sales and the post-pandemic uncertainty, has resulted in further degrading the health of the already struggling Indian automotive sector.
Though it has disrupted the entire value chain of the automobile industry, there is a silver lining to this Covid-19 pandemic: It has stimulated growth in renewable and eco-friendly transportation.
The Indian market has high potential for EVs since most commuters opt for two-wheelers, three-wheelers, and buses. There are numerous latent growth factors in place, and the pandemic might have set them in motion
While the pandemic has disrupted the transportation ecosystem, EV technology has the potential for rapid adoption, driven by an increased awareness towards a greener and cleaner transportation.
The pandemic has sensitized the public to the necessity of clean energy. It has drawn public attention to the need to reverse the high carbon-emitting lifestyle.
3-Wheelers Are Low Hanging Fruit for EV Adoption
The Indian electric vehicle industry maybe one of the youngest globally in terms of volumes, but it has great potential because of its substantial user base.
The Indian electric vehicle (EV) market will continue to be primarily driven by the two-wheeler and three-wheeler segments soon. The three-wheeler segment will see the highest CAGR over the next five years. This growth comes from the country’s booming e-commerce sector and last-mile delivery.
Mahindra and Mahindra To Shift Focus To Electric 3-Wheelers
Mahindra and Mahindra Ltd (M&M) is intensifying its focus on electric three-wheelers as it seeks to grow its electric transportation business. The Mumbai-based company has set an ambitious target of selling 10,000 electric three-wheelers each month and is in talks with state governments as well as private entities to promote sales of these zero-emission vehicles.
Recent Strategic Partnerships in EV Space
Since India still is in a partial lockdown, auto OEMs are operating at limited capacity, but the disrupted supply chain is slowly coming back on track. As part of this renewal, we are seeing several developing partnerships by key players in the EV space. This is an important indication that the Indian auto market is nearing a critical point for EVs.
Two examples of these new partnerships: In June 2020, Tata Autocomp, the provider of automotive products and services, tied-up with US-based Tellus Power to set up electric vehicle charging stations. Also, MG Motor and Tata Power have partnered to deploy superfast chargers.
However, the major critical point remains the price gap. The government and OEMs have to work together to reduce the cost by producing equipment in India and sourcing the equipment locally, along with batteries and cells. If this happens, India could become the largest EV market in the world. PSR
Aditya Kondejkar Is Research Analyst – South Asia Operations for Power Systems Research
