If India is to see greater adoption of electric mobility, the nascent but growing electric vehicle (EV) market in the country needs many more EV manufacturers and plenty of new products. That, in essence, was the message Ravneet Singh Phokela, Chief Business Officer of Ather Energy, the Bangalore-based e-scooter maker delivered at Autocar India’s panel discussion on the theme of ‘How EV Ready Are We?’ on June 5, World Environment Day.
Phokela’s co-panellists were Gaurav Gupta, Chief Commercial Officer, MG Motor India; Sandeep Bangia, Head - EV, HA & ESCO Business, Tata Power; and Raman Arora, Chief Operating Officer, Reliance General Insurance: Vinkesh Gulati, President, FADA India. The virtual panel discussion was moderated by Hormazd Sorabjee, Editor, Autocar India.
EV sales just 1% of total vehicle sales
In FY2021, official EV sales data has it that a total of 238,120 units were sold in India, down 19.41% year on year (FY2020: 295,497). This cumulative EV sales total accounts for a piffling 1.2% of total vehicle sales of 186,15,588 units in FY2021, which were down 13.60% in a pandemic- and lockdown-impacted year.
Electric two- and three-wheelers, termed the ‘low-hanging fruit’ of the EV industry, came under pressure with sales of 143,837 units (-5.37%) and 88,378 units (-37%) respectively. The bulk of the e-two-wheeler demand came from low-speed models (103,000 units) while 40,836 high-speed models found buyers last fiscal.
A look at the data sheet above reveals a rather high decline in electric three-wheeler numbers at 37% YoY but the fact is that the SMEV data doesn’t include vehicles that are not registered with the transport authority. The electric passenger vehicle segment though witnessed segment though witnessed robust YoY growth albeit on a low year-ago base – 5,905 units, up 110% (FY2020: 2,814 units). The bulk of these sales came from the Tata Nexon EV, which sold 3,805 units and accounted for 64% of total electric PV sales. The MG ZS EV, with 1,499 units, was the second best-selling e-car.
Growth mantra: Quality products, increased competition
Along with the high initial cost of EVs, the general perception about impediments to increased adoption of EVs and e-mobility in India are travel range (which creates range anxiety) and inadequate charging infrastructure. However, Ather Energy’s Phokela sought to dispel all of these.
He said: "We overestimate the charging issue as a deterrent to EV buying. An electric scooter does 25-30km a day. Our customer data for 31 million kilometres reveals 70% of the charging happens at customer homes, 20% at offices and only 4% at public locations, despite that being offered free at Ather Grid facilities."
Commenting on the EV industry’s sales numbers in India, he said: "I beg to differ regarding low EV sales in India. The demand is much more than the numbers that sell, which do not really reflect the reality. Demand is not a problem – it is supply of EVs. Customers need options. So, clearly, there is a need for more players, more competition."
FADA India President Vinkesh Gulati is of the same opinion: "Production delays and long waiting period, along with lack of options, are key impediments in transition of EVs to being mainstream mobility products. If choices are there, we will surely see customer interest in trying a new product. EV knowledge sharing is also vital."
Phokela championed the case for quality products: “The customer and market dynamics of electric two-wheelers leans on fundamentally good products. Total cost of ownership and the environment are valid concerns but the only way to wean people away from petrol products to electric is to create a compelling product."
Gulati added, "India is unlikely to see a full shift from ICE to electric vehicles. I expect both to continue on parallel tracks. The lower running cost of EVs and higher fuel prices may act as a trigger for consumers to shift to EVs."
A competitive marketplace calls for a necessary and consistent infusion of new products, which creates increased product options and customer choice. This will drive sales growth, which will enable OEMs to achieve economies of scale and in turn reduce costs. While government subsidy helps, it cannot be a permanent solution.
At present, it is estimated there are around 25 electric two-wheeler OEMs in India, with total product portfolio of less than 75 models. And only a few of these companies have manufacturing capacities above 75,000 units a year. It’s a similar situation in the electric passenger vehicle industry where the EV buyer has very little to choose from just about four automakers.
However, the e-two-wheeler industry should see new competition coming soon. Ola Electric, which is setting up a mega factory in Tamil Nadu, is slated to roll out its new scooter as are a handful of new EV players.