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E-MOBILITY
Electric two-wheelers: Riding the future of e-mobility in India The electric bikes market in India is projected to reach a value of `17.43 billion by FY2024, from `2.92 billion in FY2019. The e-2Ws have already set a prominent footprint in the States of Uttar Pradesh, West Bengal, Gujarat, Tamil Nadu and Maharashtra. With further development in charging infrastructures, the adoption of electric bikes is expected to increase in other parts of the country as well.
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he e-2W market in India is developing on account of increased government policies supporting battery-powered vehicles, the growing cognizance toward the environment, snowballing petrol prices, and strict emission norms. It is not a new development that there has been a constant push for the adoption of EVs in India for a few years now.
The e-2W market in India
India has one of the world’s biggest two-wheeler markets. In 2020, the e-2W market segment is gradually beginning to diversify. The e-2W sales have been slowly picking up and a lot of OEMs are entering the segment. Even the likes of Ola have bought e-scooter makers like Etergo and are planning to bring the offerings to the Indian market in near future. With progressively improving charging infrastructure, the industry is anticipating a decent demand in the coming times. However, a higher price of the models compared to the ICE counterpart, lesser availability of charging options, and lower range has affected the overall sales of e-2W. In the last two years, more than $600 million of investments have been raised by e-2W companies in India. These investments helped manufacturers not only with high upfront capital required in the initial stages of assembly and supply chain setup, but also in keeping the cost of e-2W low while boosting the quality of the products. The Society of Manufacturers of Electric Vehicles (SMEV) identifies the current population of electric
vehicles in India at one percent of the total number of vehicles on the road. Of these, more than 95 percent are two-wheelers. The responsibility of this disproportionate statistic is on the uninterrupted supply of twowheeled electric vehicles by some fringe assemblers and later some bigger corporates. Sohinder Gill, Director General Society of Manufacturers of Electric Vehicles (SMEV) has stated, “One of the main reasons for the stagnant sales is attributed to customers not able to buy products due to COVID-19, which led to lockdown in the country. However, the industry has been quickly able to enter the positive curve soon after the government announced the unlock process.” As expressed in media reports, he said: “Lately there has been much positive news on the EV policy front from the Central and State governments that have led to higher confidence amongst OEMs, component suppliers, and investors. We look forward to a big push by the government to set right what went wrong with FAME II to assist the generation of demand, which is already showing some green shoots. Some of the measures that could be adopted are removal of the 'range criteria' from two-wheelers for the subsidy, reduction of Goods & Service Tax (GST) on batteries from 18 percent to 5 percent when sold separately, mandating delivery businesses to convert their fleets to EVs, promote e-mobility under ‘Swachh Bharat Campaign’.” According to Customized Energy Solutions (CES) analysis, in terms of market share, in the high-speed
| November-December 2020
segment (>25 kmph), Okinawa is the market leader with 37 percent share followed by Hero Electric with 33 percent share and Ather Energy with 11 percent share. Companies like Okinawa, Ather Energy, Revolt Motors, etc. are principally focusing on the high-speed segment whereas companies like Hero Electric, Tunwal, Jitendra EV, GRG Smart Vehicles, etc. are focusing on entry- to mid-level variants of e-2Ws.
OEMs expanding facilities
For deriving the maximum revenue from the swiftly growing Indian e-2W market, original equipment manufacturers (OEMs) are expanding their facilities • In January 2020, Ather Energy announced intentions to build a 400,000-sq ft factory in Hosur, Tamil Nadu, which would have an annual output of 1 lakh units. At present, the company operates one manufacturing plant in Bengaluru, which has a capacity of 25,000 units. The company’s idea behind an additional facility is to meet the rising demand for e-2Ws in India. • In July 2020, Okinawa Autotech capitalized $28.4 million `200 crore) for its second manufacturing plant in May 2019. To be developed in Rajasthan and intended to be commissioned in early 2020–21, the manufacturing plant will have an annual output of 10 lakh units. • In October 2020, Pune-based manufacturer of two- and three-wheelers Bajaj Auto Ltd announced its plans to set up a
