Enhancing e-2W uptake in a sustainable way!
The shift towards e-mobility is inevitable. There is a need is a steady push and an indigenous ecosystem to make EVs more affordable, accessible, and sustainable.
The automotive industry is swiftly progressing in terms of technology and its ability to tackle environmental issues. Electric vehicles (EVs) have been introduced as a clean energy initiative as they offer low or zero emissions and have come a long way to become an integral part of original equipment manufacturers' (OEMs') business plans. Automakers are forming separate EV business units to prepare themselves for the projected EV boom. However, the surge in EV demand will generate significant demand for charging infrastructure; safety regulations and standards will also have to be implemented.
India is still a burgeoning market in terms of EVs; nonetheless, OEMs have started experimenting and preparing themselves for the inevitable -that is an electric future. The manufacturing landscape of EVs, which exclusively used to be controlled by the global automakers previously, is also now witnessing a rejig, as many Indian automakers now take a deep dive into the electric vehicle space, tapping the increasing potential that the country has. There has been a constant push for the adoption of electric vehicles in India for a few years now.
Government's push for developing the e-2W market:
India is considered to be a cost-conscious market where electric vehicle usage is expected to be contingent on the kind of incentives the government offers. Infrastructure, such as charging stations, still needs to be built out for extensive adoption.
In February, Nitin Gadkari, Union Minister for Road Transport & Highways along with R. K. Singh, the Union Minister of State (IC) for Power and New & Renewable Energy, launched the "Go Electric" Campaign to spread awareness on the benefits of e-mobility and EV charging infrastructure as well as electric cooking in India.
The Go Electric Campaign is an initiative aimed at decreasing the import dependence of our country in the coming years and has also been projected as an important step towards a cleaner and greener future. The campaign is aimed at creating awareness at the Pan-India level and is anticipated to boost the confidence of EV manufacturers.
Union Minister Nitin Gadkari while launching the countrywide campaign said, "We have been taking several initiatives to encourage consumers to adopt electric vehicles. Go Electric campaign is an important initiative that would help reduce the import dependence of our country in the coming years and would be an important step towards a cleaner and greener future. The campaign is aimed at creating awareness at the national level and is expected to boost the confidence of electric vehicle manufacturers."
Power Minister R K Singh said, "I am confident that the campaign will go a long way in fulfilling our main objective of the energy transition to move ahead on the path of a low carbon economy, thereby saving our country and the planet from the adverse impact of climate change."
In March, responding to a question on e-vehicles in the Lok Sabha, Minister of State for Heavy Industries Arjun Ram Meghwal said that the number of registered EVs as per the e-Vahan portal during the last three years has seen a steady increase.
As against 69,012 units of EVs sold in India during 2017-18, its numbers increased to 143,358 units in 2018-19 and again rising in 2019-20 to 167,041 units. The number comprised both two-wheelers, three-wheelers, and buses but two-wheeler sales have been buoyant, the minister informed.
The government is also taking several other steps for the promotion of electric vehicles in the country. Goods & Services Tax (GST) on electric vehicles has been reduced from 12 percent to 5 percent; GST on chargers'/ charging stations for electric vehicles has been reduced from 18 percent to 5 percent.
E-commerce adopting e-mobility for sustainable last-mile delivery:
EVs are comprehended as an active replacement for fuel-intensive automobiles, to address the issue of rising pollution, global warming, and exhausting natural resources. Apart from being environmentally friendly, electric vehicles also offer supply chain enterprises many other business benefits.
The e-commerce industry, for their last-mile deliveries, is positioning electric three and two-wheelers which not only saves the operational cost in the long run but also helps the environment. The adoption of EVs for last-mile deliveries is perhaps one of the latest trends towards implementing green logistics in supply chains.
E-commerce giant Flipkart has committed to a 100 percent transition to e-vehicle by joining the EV100 initiative. It will deploy more than 25,000 electric vehicles by 2030. The delivery fleet will include two-wheeler, three-wheeler, and four-wheeler vehicles designed and assembled in India, helping boost local innovation and economy. It
The company has already started deploying two-wheeler and three-wheeler electric vehicles in multiple locations for delivery across the country, including in Delhi, Bengaluru, Hyderabad, Kolkata, Guwahati, and Pune. Flipkart will also place requirements in service contracts, install charging infrastructure close to its 1,400 supply chain facilities, conduct awareness programs, and encourage delivery executives to use EVs.
It has partnered with Hero Electric for its Nyx series (HX and LX variants) scooters, which offer a range of up to 150 km per charge. These vehicles have already been deployed through Flipkart's logistics deployment partner in multiple cities across India.
Mahesh Pratap Singh, Head of Sustainability and Social Responsibility, Flipkart Group said" We are working with ecosystem players to build common solutions that are scalable and can be implemented across the country. Through our commitment to deploy 25,000 EVs by 2030, we are also giving out the demand signal for OEMs to collaborate and design EV models suitable for deployment in the e-commerce industry. We hope to boost local innovation and economy while embarking on building collaborative solutions for a greener supply chain."
Another e-commerce major Amazon India has recently partnered with Mahindra Electric to strengthen its commitment to electric mobility in the country, as it looks to add 10,000 electric vehicles to its local delivery fleet by 2025. It is in line with Amazon.com Inc.'s commitment of having 100,000 electric vehicles (EVs) in its global delivery fleet by 2030.
According to media reports, Amazon India said the "Indian government's focus on encouraging the adoption of electric mobility, with awareness campaigns such as 'Go Electric', and steps taken to set up charging infrastructure with the FAME II policy has helped the company accelerate and chart its vision for EVs in India."
Towards Green Mobility: Addressing Climate Change
Keeping in view the climate change commitments made by the Government of India during the COP21 Summit held in Paris to decrease emission intensity by 33- 35 percent by 2030 from 2005 levels, it is appropriate to introduce alternative means in the transport sector which can be combined with India's rapid economic growth, rising urbanization, travel demand and country's energy security. Electric mobility presents a feasible alternative in addressing these challenges, when bundled with innovative pricing solutions, appropriate technology, and support infrastructure, and thus, has been on the radar of the Government of India.
To learn more about the industry's viewpoint on electric two-wheeler sector development in recent times, ETN connected with a few of the prominent industry manufacturers
Naveen Munjal, Managing Director, Hero Electric Vehicles:
E-mobility adoption and challenges:
We are past the cusp, and now at the most critical turning point in the industry where consumers have started to acclimate themselves with EVs and are on a large scale making the inevitable shift. The past year taught us more than combined experience and predictions stated in previous studies, as to what and why the Indian market will make this change. While the general consumer mindset always looks for the best value for money, which in this case and EV provides over ICE vehicles, attributes like climate change, health concerns, pollution, and overall convenience are the key highlights to why people are opting for EVs today at a much greater rate than they were two years back.
e-2W market development amid fuel price surge:
As spoken about earlier, value for money is a critical component as to why a consumer chooses an electric vehicle over conventional fuel-based ones. India is a market that consumes more fossil fuel than it manufactures always puts the country's fuel expenses at a phenomenally high bracket which in turn leads to the users bearing the brunt. It is a known fact, that with this level of consumption, fuel prices will always be on the rise, whereas prices of Lithium and other battery cell chemicals are reducing significantly each passing month. At Hero Electric itself, footfalls increased by over 50 percent post the recent price hike in petrol; which is a clear indication of the consumer feels about spending money which could have otherwise been saved simply by adopting e-2Ws.
Atmanirbhar push to indigenous manufacturing:
The Atmanirbhar vision is definitely a brilliant leadership move. Getting more Indian companies and the Indian population to get into manufacturing will surely strengthen India's industrial strength. With the market size being as large as it is, this would greatly help to bring costs down drastically as numbers increase. Having local manufacturers at a large scale (down the line) will also help create some world-class quality products overall increasing the quality of the final EVs and bringing them up to levels that can take on European or Japanese companies who have gotten into these sphere years ahead of us.
In a country known to have some of the best scientific minds in the world, innovations go hand in hand with the country's success. The Atmanirbhar vision will help many tech firms realize their full potential when the market opens to them, increasing cross-industry innovations which may as well drive the mobility of the future.
At Hero Electric we work closely with all our Indian vendors and most of our components are indigenized. A couple of key components such as batteries are still not developed in India, however, with the developments in the sector within the country, soon we would be moving our battery sourcing locally and be 100 percent local.
Addressing climate change with sustainable transportation:
There are several aspects to look into when talking about increasing usage of respectively new technology amongst 1 billion people. However, the goal is to achieve maximum EV penetration in a country where 80 percent of the population uses two-wheelers for daily commute.
Mass awareness programs:
- Highly incentivizing both, buyers as well as manufacturers
- Subsidizing material costs
- Government fleet purchase
- Mandates for commercial vehicles
- Infrastructure creation
- Tax benefits to buyers
These are just an overview of what can be done to increase the adoption of EVs in India.
Mr. Ravneet S. Phokela, Chief Business Officer, Ather Energy:
E-mobility adoption and challenges:
The electric two-wheeler market in India has witnessed significant growth over the last two years. Any policy that comes into play takes a few years to stabilize, 2019 and 2020 saw FAME II policy stabilizing and paved the way for traditional automakers to introduce new and powerful vehicles which led to demand generation. 2021 will see momentum in scale and capacity growth by original equipment manufacturers (OEMs). The market is turning in favor of electric in a big way. But the bigger change has been in the customer mindset. Today people are walking into an EV showroom expecting to be wowed by electric vehicles. EVs are perceived as an upgrade with most customers predicting their current vehicles to be the last fossil fuel vehicles.
At Ather, we see a high demand in all the markets that we have entered as the consumer sentiment around EV is very positive and the demand will continue to grow in the coming years. Ather expanding to 27 cities, shows the potential and demand for good quality, high-performance vehicles in the country.
The need for charging infrastructure needs to be addressed. Although the government is looking at it by building infrastructure in public places, home charging should also be given impetus. For average consumers, most of the charging for an EV happens at home but EV enthusiasts still face challenges because there are no dedicated parking spots for two-wheelers giving them second thoughts on making the switch. Policymakers should address these basic concerns which will help generate more demand for EVs. Though these policies have been put in place, ensuring that they are implemented and not hindered is necessary.
e-2W market development amid fuel price surge:
With the hike in fuel prices, we are seeing an increased interest in e-mobility happening at a faster rate. A lot of consumers have considered switching to electric having in mind the rising fuel prices. While EVs are priced higher compared to the regular ICE-powered vehicles, it is much more economical in the long run.
We also have innovative ownership models to encourage the switch and reduce the total cost of ownership. We offer an Assured Buyback program on the vehicles which is a result of the company's confidence in the battery and connected nature of the product. Under the Buyback program, customers will get ₹85,000* as a guaranteed value for the Ather 450X at the end of three years. Ather vehicles are also available for lease, which allows the customers to access a fully loaded Ather 450X with down payment & a nominal monthly fee, starting at ₹3,394 per month.
Atmanirbhar push to indigenous manufacturing:
At Ather, aside from the lithium-ion cells, the rest of the scooter is indigenously produced and sourced. The batteries that we use are designed and manufactured by Ather Energy in-house. This makes the Ather 450 series a truly Make In India product.
Ather has a strong local supplier base for nearly 90 percent of the product being indigenously built and sourced. With growing demand, we've already scaled up our manufacturing capability through our recently commissioned manufacturing facility in Hosur, which takes our annual capacity to 110,000 vehicles & 120,000 batteries. We are now working with our vendor partners to ensure that they can scale at the same pace so that we have stability and predictability in our supply chain. The Indian EV industry has the potential to dominate the world, and for that, the supply chain must be vibrant. If we have a solid supply chain, it incentivizes new players to come in as the risk of dependency on a small supplier base is taken out of the equation.
Make In India push to localization of auto components:
We have been associated with Tier 1 vendor partners for our production process in terms of supplying and manufacturing components for our products. They have been consistent in delivering top-notch quality components to us.
We have partnered with MRF for tyres that are used in the production of the Ather 450X and 450 Plus, Brembo Bybre for brake pads, Sanmina is our technical support vendor in terms of manufacturing circuits for our digital dashboard, among many others.
Financing the growth of e-2W sector:
To date, we have raised about $142 million through marque investors like Hero MotoCorp, Sachin Bansal, and Tiger Global.
We plan to invest ₹635 Crores in the next five years at our manufacturing facility in Tamil Nadu to scale up production. This investment is an opportunity for value creation in the EV sector and will create job opportunities in the region. As a part of this initiative, more than 4,000 employees will be trained in requisite skills in the EV sector over the next five years.
We also plan to invest in setting up charging infrastructure across all 27 markets that we will be present in to provide a stress-free riding experience to its customers by removing the range anxiety from their minds. Currently, we have set up more than 128 charging points across 18 cities in the country.
This year our full focus is on the launch of Ather 450X across the country. The opening of Ather Energy Experience Centres across markets has been one of the major footprints in target cities in terms of growth, we are looking to open Experience centres across all major Tier-I & Tier-II cities by the end of 2021.
Addressing climate change with sustainable transportation:
The national lockdown due to COVID-19 has increased public awareness of the effects of pollution in the environment due to mobility. Growing awareness of the environment is contributing to the growth and adoption of EV. EVs can reduce the emissions that contribute to climate change, reduce dependence on petroleum, and have the potential to reduce greenhouse gas emissions and health effects from air pollution.
Our electric vehicles produce zero direct emissions, which specifically helps improve air quality. However, EVs typically produce fewer life cycle emissions compared to the widely used conventional vehicles because most harmful emissions are lower for electricity generation than burning petrol or diesel and will be even lower as the electric power sector cleans up over the next few years.
The central and state governments are moving in the right direction, by announcing a switch to EV in public transportation. Ridesharing companies, delivery agents, and many start-ups have already announced plans to go full electric soon. Sustained push and introduction of subsidy for personal mobility will help in the transformation of the transport sector.
Rushi Shenghani, Founder, Earth Energy EV:
E-mobility adoption and challenges:
The EV uptake in India is increasing by the day currently and the number of EVs on the Indian roads has grown manifold as compared to the past two years thanks to the rising fuel costs and the availability of good quality EVs. We still believe that the EV Adoption on the consumer level is going to be more on the two-wheeler and the uptake of the four-wheelers EVs is going to be more on the commercial business-to-business (B2B) sides.
e-2W market development amid fuel price surge:
The raised fuel cost has increased the gap between the cost of ownership and the initial cost of ownership making EVs even more lucrative for the end consumers and businesses alike. Consumers with a minimum riding range of 50-60 km/day will be drawn towards EVs given the fuel savings.
Atmanirbhar push to indigenous manufacturing:
We have taken an India-first approach to the sourcing of our components. We are currently 96 percent localized on the bill of materials (BOM) level (4 percent being the cells for the batteries and certain integrated circuits for the power management and conditioning), Rest all the components including our drivetrain and vehicle dynamics and structural components are all being sourced from Tier-I/ Tier-II automotive suppliers at present.
Make In India push to localization of auto components:
We are currently working with a wide gamut of vendors to cater to all the requirements ranging from tyres to lighting systems to dynamic controls like suspensions and transmissions. The majority of the vendors are Tier-1 / Tier-2 automotive suppliers currently.
Financing the growth of the e-2W sector:
We have invested heavily in our team and the staggered CAPEX on our testing and conditioning equipment. We can at present produce a total of 1000 vehicles/quarter currently that is being increased to 1000/month from Q2 and we will be doing heavy CAPEX investments to the tune of $2-4 million in the upcoming quarters this year.
Addressing climate change with sustainable transportation:
We are at a phase where we can exponentially take measures to act in the direction of addressing climate change and act upon the sets to improve the health index of the environment. Electric grid cleaning should be one of the most imperative steps to be undertaken at utmost priority as the green footprint of the EVs is dependent on the source of the power. The promotion of shared mobility and leasing of EVs in India can play a critical role in the adoption of EVs.
Dr. Yogesh Bhatia, Founder, Detel India:
E-mobility adoption and challenges:
The adoption is going smoothly. For two-wheelers, the adoption is faster as they do not require any charging stations. The key impediment is the high initial cost and availability of charging stations.
e-2W market development amid fuel price surge:
The e-2W market will pick up very fast as fuel prices are hurting the pockets of this segment.
e-2W market development amid fuel price surge:
The e-2W market will pick up very fast as fuel prices are hurting the pockets of this segment.
Atmanirbhar push to indigenous manufacturing:
We are in consultation with local parties to design and bring down the costs of critical items such as motors, batteries, chargers, and controllers.
Make In India push to localization of auto components:
We are in the discussion phase with a wide spectrum of vendors, ranging between small, medium, and large-scale establishments.
Financing the growth of the e-2W sector:
To date, we have invested approximately ₹10 crores. Also, we are in the process to raise more funds to enhance our manufacturing capacity soon.
Addressing climate change with sustainable transportation:
The transportation sector should have a time-bound plan to reduce dependence on fossil fuels, which in turn will have a positive impact in addressing climate change.
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