Electric Vehicles the future of Indian Automobile market
Updated: Oct 16, 2020
Electric Vehicle is no doubt the future of the automobile market, not just in the home market but also in the international platform. The current situation of rising global warming and other climatic changes are all a result of burning fossil fuels like crude oil. Automotive sector is the main consumer of gasoline and diesel. Data shows that Indian transportation sector consumes an approx. 94 million tonnes of oil equivalent energy. With an annual emission of 123 million tonnes of CO2, automotive sector in India should undergo a drastic change to reverse the damages that the sector has already caused. The government has too taken keen interest in ensuring the security of Energy by taking initiatives towards reducing the emission by 30-35% from its current values. This is where the E mobility fits in as a right solution.
Indian automotive sector currently witnesses 3 types of EV:
1. Solar powered vehicles
2. Vehicles with on-board battery packs
3. Hybrid vehicles – powered by mx of internal combustion and batteries
The service and maintenance cost incurred by an EV is roughly 70% less than any present cars. In 2019 alone, an approximate of 2.2 million units were sold all over the world. These figures make it tempting for small scale industries to look for opportunities in being a part of this highly promising supply chain. EV market being in an infancy stage gives the upper hand to SMEs which are willing to enter the market thereby gaining the early advantages of identifying the nuances of the market and making the right investment.
For EVs to prevail on Indian streets, a few major challenges should be defeated like:
The deficient charging infrastructure
An over-dependence on battery imports
The high cost of EVs at present
Insufficient power supply in parts of India
Absence of service and maintenance.
In any case, if the advancements supporting the development of EVs and batteries advance quicker, significant obstructions, for example, the significant expense, restricted range, execution issues, long charging time, and a deficiency of charging stations can be overseen. The Government is aggressively pushing for Electric Vehicle based mobility in the country. A scheme announced recently to fund up to 60% of R&D costs for the development of indigenous low-cost electric technology, global automobile players are investing heavily in R&D in electric vehicle technologies in India. This surge in EV and its components throws light onto the areas where an SME is able to invest in. Certain areas like:
EV Battery Assembling/Manufacturing
Various EV Components
Battery Charger Operator's
Charging as a service
Battery on rent
Wholesale and retail trade of the end product
Wholesale and retail trade of batteries and components
E-Vehicle on rent
Post sale services
Cities like Mumbai and Delhi have already shown a surge in the demand of passenger and commercial EVs while Uttar Pradesh has shown surge in procurement of EV parts. A study done by Avendus Capital, estimates by 2025, E-Vehicle market will be of INR 475 BILLION, with following break-ups
Two Wheeler - INR 120 Billion
Three Wheeler -INR 180 Billion
Four Wheeler - INR 100 Billion
Light Carrier Vehicles - INR 15 Billion
Bus - INR 60 Billion
Considering the above mentioned numbers and the opportunities present in the market it is of no doubt that SMEs and Start-ups will be in control of the EV market in India with many budding entrepreneurs setting up business in the aforementioned areas.
With pandemic on the rise, many established companies have started rethinking on the collaboration they can explore in the domestic market rather than investing overseas. Larger giants like Exicom, Bosch, Tata Autocomponents, Phylion, ExideLeclanche, Greenfuel, Okaya are heavily investing into setting up or scaling their ventures in different areas of the EV market thus ensuring the robustness in the supply chain formation. The initiatives and the money flow into the market is promising enough for many looking for a business opportunity to dive in and be part of this supply chain with a small capital and work towards great revenue generation.