Eight shared e-mobility trends to watch out for in 2024
Shared two-wheeler EVs are to ICE bikes what smartphones are to landline phones, writes Amit Gupta, Co-founder and CEO, Yulu
For all the innovations that have happened in the automobile sector over the past decade, the form factors of the vehicles themselves have largely remained unchanged. That’s what makes the rise of small and shared electric vehicles so significant.
Shared two-wheeler EVs are to ICE bikes what smartphones are to landline phones: a sensible, versatile, and technologically powerful upgrade. But that’s not all. These vehicles are environmentally cleaner than their ICE counterparts, not to forget significantly more affordable.
As India’s largest shared two-wheeler EV mobility company, Yulu believes that the segment will touch all our lives in the coming year thanks to a timely convergence of policy and investor support, affordability, changing consumer mindsets, and the creation of a vibrant EV ecosystem. To know more, check out these eight predictions for shared EV mobility in 2024.
Eight predictions for shared EV mobility in 2024
1. ‘Small’ and ‘shared’ mobility will get its moment under the sun
The year 2024 will truly see the arrival of small, smart, shared, and safe mobility options that are also sustainable – e.g., e-scooters, e-rickshaws, and low and mid-speed EVs. (Yulu itself will go from 30,000 vehicles to 100,000 vehicles by the end of the year.) This isn’t to say that people will buy fewer cars. However, compact, clean and electric transport that is powered by modern technologies like AI, IoT and machine learning, and innovative yet practical form factors, will take over a larger share of mobility miles, thanks to their accessibility, availability, and affordability. This trend is part of a worldwide shift towards usage-based models like mobility-as-a-service (MaaS), which are a greener and smarter choice for intra-city trips.
2. Commercial applications will drive hyper-scale growth in the shared EV market
While the personal use of shared EVs will keep increasing, it is their commercial use for last-mile deliveries that will be the primary driver. Commercial services are seeing greater adoption of shared EVs due to their lower operating costs, resulting in better earnings for the end-user. The regulatory push to switch to green fleets is another tailwind for this trend. These factors will enable the commercial adoption of shared EV services to register strong growth in 2024. This widespread usage will drive down the costs associated with EVs, like that of charging infrastructure, thus improving access and lowering the cost of mobility for users.
3. The policy environment will likely get more supportive
Both at the central and state levels, India’s policy brief on mobility is clear: EVs are crucial for freeing our cities from pollution and congestion. Delhi’s government recently launched policies to accelerate a shift to EVs by 2030 while Goa had initiated a similar rule on the tourist mobility front. We believe that 2024 will see more states doubling down on similar policies. We also believe that policymakers can learn from the successful “war on pollution” in China, where a mix of subsidies and penalties has led to the electrification of nearly all commercial transport and driven impressive EV penetration in a relatively short time.
4. Shared EV mobility will attract more investment dollars, green funds
We predict greater investor interest in shared EV mobility as the ‘climate clock’ winds down towards 2030. As per Inc42, funding to India’s EV sector grew from $758 million in 2022 to $780 million in 2023. The sector is fast losing its ‘risky’ label for lenders, thanks to robust policy and institutional support. A recent example of this is the joint $1 billion fund by the World Bank, Asian Development Bank and SIDBI, which aims to boost bank and NBFC lending to the sector.
We also see greater ‘green funds’ flowing into the EV segment as India embarks on its new green bond framework. This would be in line with global trends, where GSSSB (green, social, sustainable, and sustainability-linked bond) issuances could reach a record 16% of overall bond issuances this year. Within the shared EV segment, we believe investments will grow at a faster pace as brands start to turn profitable (Yulu is already positive at a unit-economics level).
5. New MaaS business models will emerge
There is greater willingness today among end-users and governments to adopt new-age mobility solutions, as long as these guarantee superior cost-effectiveness and customer experience. We foresee the emergence of a plethora of innovative business models that can tackle current mobility challenges – such as high initial expenditures, maintenance, efficient operations, vehicle and fleet upgrades – through creative and technology-supported solutions. For instance, Switch Mobility's Opex-driven, pay-per-kilometre solutions have gained favour among State Transport agencies, while Yulu's rental services, featuring flexible pricing structures, have garnered substantial interest from last-mile delivery professionals.
6. India will start to evolve into a global EV manufacturing hub
EV manufacturing in India is poised for a leap in 2024, led by recent developments. The government’s PLI scheme for advanced chemistry cells will see several companies setting up domestic battery production facilities this year. The indigenisation of key components like cathodes is being complemented by the increase in semiconductor assembly, testing, marking, and packaging (ATMP) activities in the country. These developments will enable legacy and incumbent OEMs like Bajaj, Hero, TVS and others to develop made-in-India EVs that are high on quality and competitively priced. The rise of homegrown EV makers like Ola Electric and Ather, and the entry of global giants like Tesla, also serve as proof of the opportunity that India offers to profitably and scalably produce EVs for the domestic and export markets in the near term.
7. Battery swapping will hit an all-time high
With speculation that India’s FAME subsidy might be reduced or withdrawn for two-wheeler buyers, the spotlight is now on affordability. Higher vehicle prices will raise the barrier to owning an EV. And since EV batteries account for 30-40% of an EV’s upfront cost, we expect greater traction for battery-swapping services this year, especially in commercial applications. Technology-enabled battery swapping services not only eliminate the need for a fixed battery, but also tick other boxes like accessibility, affordability, safety, and obsolescence protection for consumers. Another fact supporting our view is India's battery swapping infrastructure, which has grown fast to reach 1,100 swapping stations in 2023.
8. A 'two-track' market will emerge
Notwithstanding the popularity of EVs, they’re still not a mass-market product yet. Hence, in 2024 we will see OEMs releasing more affordable vehicles (say in the range of Rs 50,00-70,000) by reducing frills and ‘nice to have’ vehicle features to target middle-income users. Cost controls will also happen through a greater density of battery swapping and charging networks and the fast-growing ecosystem of MSME component suppliers in India.
In parallel, however, we also predict that some companies will launch feature-loaded vehicles (these would be more expensive). These vehicles will push the envelope on technology for users who demand it. Thus we will likely see a ‘two-track’ market taking shape this year - one being affordable and low-frill and the other premium and technologically sophisticated.
At Yulu, we are extremely bullish on the future of shared electric mobility. We strongly believe that the large-scale adoption of these solutions will support India’s decarbonisation goals while simultaneously addressing the mobility needs and aspirations of 1.4 billion Indians.
Amit Gupta is Co-founder and CEO of Yulu. Views expressed are those of the author.
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