INDIA REPORT
EDITOR’S NOTE: The 5th Annual TWF (Two Wheeler Forum) took place on Feb. 21 and 22, 2024, at the India International Convention & Expo Centre in Dwarka, New Delhi. Hosted in partnership with Trak N Tell, the event spotlighted aspects of the Indian two-wheeler and three-wheeler industry, spanning both electric and internal combustion engines.
The landscape of electric vehicles (EVs) in India is undergoing a transformative shift, with the recent 2 wheeler, 3 wheeler, and EV show held in Delhi showcasing the industry’s dynamic evolution. Despite constituting less than 1% of total vehicle sales, the electric vehicle sector holds immense potential, and is projected to grow to over 5% in the years to come. Currently, the Indian roads host over 5 lakh electric 2 wheelers and a modest number of electric cars. However, the market’s growth trajectory remains subject to fluctuations, predominantly influenced by governmental incentives.
A myriad of players populate the Indian EV market, including prominent names such as Eco, Hero, Ather, Lohia, and Ampere, among others. These manufacturers are pivotal in catalyzing positive change within the country. Notably, 90% of EVs in India comprise low-speed E-Scooters, exempt from licensing and registration requirements. Despite their popularity, the utilization of lead batteries to mitigate costs has led to concerns regarding battery lifespan and failure rates, impeding EV sales.
Rising environmental consciousness and concerns over climate change and air pollution are driving consumer preferences towards greener transportation alternatives. This shift underscores the burgeoning demand for electric two-wheelers as a cleaner mode of transportation compared to traditional internal combustion engines. Moreover, growth isn’t confined to two-wheelers; significant strides are evident in other vehicle segments like 3 wheelers, 4 wheelers, and E-buses, propelled by government initiatives aimed at bolstering the EV market.
Impacts on Stakeholders. Electrification is affecting many sectors of the India economy, from OEMs and component manufacturers to infrastructure providers.
- Manufacturers and Suppliers. The transition towards EVs is forcing traditional manufacturers to adapt to meet evolving consumer demands and regulatory mandates. This entails substantial investments in retooling manufacturing facilities, sourcing components, and intensifying research and development endeavors. Collaborations with battery manufacturers, technology providers, and startups are pivotal in developing EV platforms, charging solutions, and battery swapping infrastructure.
- Infrastructure Providers. The proliferation of EVs underscores the need for a robust charging infrastructure. Investments in smart grid technologies, battery swapping networks, and charging stations are imperative to foster widespread EV adoption. Battery swapping technology, in particular, emerges as a pragmatic solution to assuage range anxiety and circumvent charging infrastructure constraints.
Challenges for EV Adoption. There are several major challenges that could slow the development of EV use in India. These include:
- Range Anxiety. The pervasive concern of range anxiety stems from the limited range of EVs vis-à-vis traditional vehicles, exacerbated by concerns surrounding charging infrastructure availability. Addressing this necessitates concerted efforts in expanding charging infrastructure, especially along major routes and highways.
- Charging Speed and Convenience. Inconvenience and protracted charging times exacerbate range anxiety and deter EV adoption. Investment in fast-charging technologies and promoting workplace and home charging solutions is imperative to assuage consumer apprehensions.
- Total Cost of Ownership (TCO) and Total Value of Ownership (TVO). TCO and TVO analyses offer holistic insights into the economic and environmental implications of EV ownership. While TCO encompasses the comprehensive costs associated with owning an EV, including purchase price, energy costs, maintenance, and depreciation, TVO delineates broader value propositions such as environmental impact, health benefits, and convenience.
- Market Penetration. Ola Electric is emerging as a frontrunner in the EV market, leveraging substantial investments to bolster its EV business and infrastructure. Collaborative ventures and strategic expansions underscore the burgeoning potential of the EV sector.
- Navigating Data Discrepancies. Discrepancies between OEM-reported data and the Vahan portal underscore challenges in data accuracy and reporting. Delays, incomplete reporting, variations in data sources, and distinctions between registrations and sales underscore the complexities in gauging the true scope of EV adoption.
Summary. While the Indian EV market teems with promise, successfully navigating its challenges will require concerted efforts from stakeholders across the ecosystem. Addressing infrastructure constraints, dealing with consumer concerns, and fostering data transparency are necessary to catalyze widespread EV adoption and realize India’s electric mobility ambitions. PSR
Aditya Kondejkar is Research Analyst – South Asia Operations, at Power Systems Research
Rushikesh Kumawat is an Analyst at Power Systems Research
