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The Indian automotive sector has come a long way since the 1980s . The process of liberalisation of the Indian economy in early 90’s heralded the awakening of the Indian automotive sector.
The Auto Expo 2020 in Delhi certainly left no doubt, that the Indian automotive market is vibrant and mature. The sector has transcended from isolation to one of the most important automotive markets in the world.
We were at the Auto Expo for only one reason. To meet with manufacturers and other stakeholders engaged with the nascent Indian electric vehicle market. It certainly did not disappoint. EVs were not tucked away in some isolated corner in the grand exhibition halls, instead, to our utter surprise, electric cars took centre stage at the show.
Well established Indian manufacturers, like Tata Motors (yes, the same company that owns Jaguar Land Rover), Mahindra Electric, along with a host of global automotive companies were present in-full-force with their respective EV portfolios. The ‘noise’ around electric vehicles was certainly drowning the roar of the internal combustion engines (ICE) vehicles on display. Every EV model was surrounded by what seemed like a billion curious onlookers. All with their smartphones vying for the perfect ‘selfie’ with the all-electric vehicle.
The EV excitement is beyond the confines of the exhibition halls. During our stay in India, we spoke with a number of individuals not directly connected with the automotive industry. It is clear that ‘electric vehicle’ is already in the vocabulary of the everyday consumer. The recent media coverage in the country on emission-free road transportation has certainly helped develop the broader profile of the EV sector. The launch of battery-electric vehicles (BEVs), like the all-electric MG ZS EV SUV by MG (owned by China based SAIC Motor) certainly achieved widespread media coverage.
The Indian government has an aspiration to achieve 40% electric vehicles by 2030.
The Top Electric Car Models Currently Available In India
Despite the excitement and numerous announcements by automotive companies to potentially launch electric cars in India, the number of models currently available to buy are limited. It is our view, that it will take time for international EV automotive manufacturers to move from ‘intent’ to ‘commitment’ in regards to the Indian EV market. We believe that international electric car companies may take up to 5 years to participate in the Indian EV opportunity. Also, it will take time for domestic automotive companies to provide a comprehensive EV portfolio. The pure electric models currently on sale include:
The All-Electric Tata Nexon
Battery And Range
- Battery capacity: 30.2 kWh
- Battery type: lithium-ion
- Range: 300 km (based on internal testing data)
- Capable of rapid charging (up to 80% in 50 minutes)
Power & Performance
- 0-100 km/h: 9.9 seconds
- Top speed: N/A
- Max Power: 129 PS
- Torque: 245 Nm
The All-Electric Hyundai Kona
Battery And Range
- Battery capacity: 39.2 kWh
- Battery type: lithium-ion
- Range: 452 km (ARAI certification)
- Capable of rapid charging (up to 80% in 57 minutes)
Power & Performance
- 0-100 km/h: 9.7 seconds
- Top speed: N/A
- Max Power: 136 PS
- Torque: 40.27 kgm
The All-Electric Tata Tigor
Battery And Range
- Battery capacity: 21.5 kWh
- Battery type: lithium-ion (high density)
- Range: 213 km (MIDC Cycle)
- Capable of charging up to 80% in 120 minutes)
Power & Performance
- 0-100 km/h: N/A
- Top speed: 80 km/h
- Max Power: 40 bhp
- Torque: 105 Nm
The All-Electric MG ZS SUV
Battery And Range
- Battery capacity: 44.5 kWh
- Battery type: lithium-ion (ultra high density)
- Range: 340 km (ARAI certification)
- Capable of rapid charging (up to 80% in 50 minutes)
Power & Performance
- 0-100 km/h: 8.5 seconds
- Top speed: N/A
- Max Power: 142.7 PS
- Torque: 353 Nm
The All-Electric Mahindra e-Verito
Battery And Range
- Battery capacity: 21.2 kWh
- Battery type: lithium-ion
- Range (MIDC): 181 km
- Capable of fast charging (up to 80% in 90 minutes)
Power & Performance
- 0-60 km/h: 11.2 seconds
- Top speed: 86 km/h
- Max Power: 31 kW @ 4000 rpm
- Torque: 91 Nm
Is India Ready For EV The Revolution?
Short answer: no! Without doubt, India has the potential for becoming one of the biggest battery-electric vehicle (BEVs) markets in the world, to include even e-motorcycles, e-bikes and e-scooters. However, India has significant challenges to overcome to make EV adoption ‘real’. Below we highlight only a few critical challenges, to give you a better sense of the EV landscape in India.
EV Charging Infrastructure
The debate on EV charging infrastructure is not specific to India. It is a pertinent issue for any market looking to migrate from internal combustion engine (ICE) diesel and petrol cars to low emission to zero emissions plug-in electric vehicles (PHEVs) or battery-electric vehicles (BEVs).
The lack of EV charging infrastructure and the time to charge an EV have certainly been key obstacles in the mass-adoption of electric vehicles globally. However, this issue is further amplified in India, a country well known for very limited and poor power infrastructure. In fact, India continues to remain a big consumer of diesel for not only automobiles, but also for backup generators that are used during times of power outages.
For the Indian EV market to develop, it will have to ‘sell’ more than a ‘sexy’ narrative on EVs. The industry will have to work very closely with the government to execute scaled EV charging infrastructure. To achieve its 2030 objectives, the country will need to deploy up to 400,000 public charging points.
We do not expect it to develop immediately and in our view, this could take significant time. However, we do believe, it will develop. As an example, the Indian renewable energy sector has matured to become one of the leading solar and wind markets in the world, despite significant early challenges around grid infrastructure i.e. evacuation capacity and sub-station reinforcement. It is worth noting that the majority of infrastructure funding was sourced from companies operating in the sector and not direct investment by the Government of India (GoI). In the case of electric car charging infrastructure we expect to see the same i.e. funded by the private sector.
From some of our conversations locally, home charging infrastructure seems even a greater challenge, given the lack of stable power to homes. Of course, it would defeat the very purpose of driving an electric car, if the EV was being charged overnight by a backup generator fuelled by diesel.
Retail Price Of EVs
If there is one theme common across consumers in India, is that, they are fiercely price conscious. Got to a local market and you can hear the constant ‘hum’ of bargaining! The Indian automotive sector is no different. Automotive manufacturers, to include Indian and international companies that have proved successful in India over the past 30 years, have had ‘affordability’ and ‘price accessibility’ deep rooted in their approach to the market.
It was clear even from our short visit to the Auto Show, that the price disparity between ICE and EVs is already a significant issue, even for potential early adopters. By way of example, the Tata Motors internal combustion engine NEXO compact crossover model is nearly 40% cheaper than the top selling all-electric NEXO EV developed from the same platform. Despite the low cost of maintenance and running, it would be a herculean task to convince potential buyers to pay significantly more for EVs.
For the EV market to have a meaningful positive impact, mass-adoption is imperative. However, for mass-adoption achieving lower prices is key. The key to overcoming this challenge will be manufacturing locally. International automotive manufacturers already have established local manufacturing facilities for petrol and diesel cars and expanding the manufacturing base to include EV production will be inevitable.
Though there are incentives (FAME) provided by the Government of India (GoI), our view is that these will not be sufficient to swing the pendulum towards affordability!
e-Bikes, e-Scooter And e-Motorcycles
India is the largest market in the world for two-wheeler vehicles. In fact, more than 80% of vehicles sold in India are two-wheelers. Not surprising that Indian and international bike, scooter and motorcycles manufacturers have already commenced developing the Indian zero-emission market. At the Auto Show there was no dearth of e-bikes, e-scooters and e-motorcycles on display by both local and international manufacturers. The mood was certainly ‘upbeat’.
We believe they have good reason to feel positive, as the segment with most potential in the immediate to medium term in regards to electric vehicles, will be the all-electric two-wheeler segment. The key reasons for this is improved affordability (i.e. more accessible to a larger consumer base) and the need for dedicated charging infrastructure is not quite as imperative, as in the case for electric cars.
However, international manufacturers will need to manufacturer locally to achieve attractive price positioning. We spoke to representatives from Piaggio to discuss the all-electric Vespa Elettrica on display. We do not believe imported Vespa Elettrica e-scooters will gain traction and locally manufacturing will be key in gaining traction. However Piaggio’s timelines for launch of the Vespa Elettrica in India are not yet crystallised.
As for e-bikes and e-motorcycles, though there is potential, in our view, not as strong as e-scooters for the immediate term.
In conclusion, though the opportunity for the Indian EV opportunity is at early stages, we do expect increased activity in 2020 and 2021. Its a market that will require patience to develop!
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