The lockdown has indeed affected the automobile industry adversely. The Society of Indian Automobile Manufacturers or SIAM has stated the auto industry will witness an estimated loss of Rs 2,300 crore per day due to lockdown. However, we firmly feel that electric vehicle (EV) industry will register significant growth in FY2020-21 due to their economic benefits of ownership.
Post Covid-19, the value and demand for personal mobility may tend to increase with the new social setups. Electric two-wheelers will be a popular option because of its affordability and low maintenance requirements. Also, the COVID-19 lockdown has contributed a lot to improving the environment aspect and helped to spread the concept at a larger scale, making the greener mobility solution more popular and acceptable.
Need for strong supply chain
Original Equipment Manufacturers (OEMs) should put more effort into R&D and product design of critical components so that a strong supply chain is created to reduce the cost and improve the quality. The ‘Design in India’ is also equally important as ‘Make in India’ as the OEMs need to have all round control on the design customization to meet the Indian two-wheeler consumers’ expectations in terms of range, speed and ride comfort. The OEMS must also have a firm control on the cost and quality as India is among the most price-sensitive markets in the world.
Increasing electric two-wheeler penetration
EV companies must also work towards offering better margins to their dealers and put efforts in restructuring the business model to achieve profitability for themselves as well as their dealers. The OEMs should also explore better options for customer service and delivery mechanisms suitable to the current situation, which will include training the dealer staff on safety procedures, providing them with adequate protective equipment and enabling the dealers to build the infrastructure required to service the customer in the age of this pandemic.
Even after the aggressive policy push by the government towards increasing the penetration of electric two-wheelers, the ground level penetration has remained below one percent. This is, in large parts, due to the non-availability of attractive EMI (Equated Monthly Installment) schemes for electric 2W models when compared with the conventional ICE (Internal Combustion Engine) two wheelers. The OEMs should focus on multiple tie-ups with financial partners including banks, non-banking financial companies (NBFC), and co-operative banks to penetrate the rural and town markets, and also offer extended warranty schemes to clients by tying up with insurance firms. Natural and organic consumer demand should drive the EV 2W market rather than excessive dependency upon the government subsidies.
High speed and long-range electric scooters with portable batteries are the way forward for EV 2W adoption in the long run.
Indian two-wheeler commuters travel around 35km everyday with an average speed of 40kph. Hence, consumers are more interested in electric two-wheelers with a 80-100km range and a minimum top speed of 60kph.
Currently the pricing range is similar to BS VI version of ICE two-wheelers. But the cost of the lithium battery packs can be reduced by 40 percent if it is manufactured in India rather than imported.
Control and thermal systems in these batteries must be customised to suit for faster discharge conditions. Portable Lithium batteries are also need of the hour as charging infrastructure will take a minimum of 5 years.
Despite the grave predictions for the Auto Sector due to this lockdown, it can also herald a boom for electric two-wheelers, if the opportunities thrown by this pandemic are seized and capitalised adequately.