Week 45 (Nov 1 - 7)
In this week's recap - Uber & Ola both made news, Inverted Energy opened its 100Mwh LIB facility in Delhi, some charging infra news and reports for BMTC finally choosing to lease Non AC Buses.
KPMG Report: KPMG in association with CII recently released a report “Shifting Gears, the evolving electric vehicle landscapes in India” that provides an understanding of segment wise propensity to transition to EVs by analyzing use cases and Total Cost of Ownership (TCO), and estimates the EV penetration by 2025 and 2030.
Looking at segment-wise EV penetration in 2030, 3Ws are expected to have the highest adoption (65-75%) followed by 2Ws (25-35%). EV penetration in passenger cars is expected to remain low (10-15%) on account of high prices, a limited number of vehicles available, and insufficient range. The same number for commercial 4Ws is expected to 20-30%. Due to longer distances traveled per day EV and predictability of routes, EV penetration in buses is likely to be 25-40%.
On the policy front, a combination of central (Fame II Scheme) and state-level initiatives (state EV policies) is expected to drive the growth of EVs. However, due to gaps in policymaking and conflicting targets, EV penetration remains less than 1% overall. India also needs to set up its battery manufacturing industry, charging infrastructure, and localize supply chains, but it will be challenging due to a lack of natural resources.
The report analyses TCO parity for the vehicle segments and concludes that while TCO parity has been reached for e2Ws, there are limited models to choose from and need to be sturdy with a longer battery warranty. For e3Ws, a segment that caters largely to last-mile travel and e-commerce deliveries, innovative buying models need to be commercialized to attract buyers. Personal e4Ws are expected to reach TCO parity by 2025, but with no subsidy, the parity point may be delayed to 2030. The commercial use case is expected to drive adoption for electric cars with critical success factors being longer-range cars, vehicle financing, and battery reliability. Buses especially in the intra-city segment are expected to convert to electric first on account of favorable unit economics, predictable routes, and the need for less charging infrastructure. For public-funded state transit companies, TCO parity is expected by 2024 while other bus segments are expected to convert to electric after 2030.
The report also touches upon innovative business models implemented by startups in the sector. While some of the models below are nascent, they may shape the market dynamics in the future as the sector grows.
Vehicle subscription/leasing model. To circumvent the high car prices
Battery subscription/leasing model. To reduce upfront costs to the customer as well as address concerns related to the reliability of the battery
Battery swapping model. Address batter reliability and range anxiety
Charging as a Service (CaaS). Addresses concerns regarding range anxiety
Sale of the vehicle without battery
The report concludes by stating that adoption B2C adoption is likely to be stunted on account of higher vehicle prices and a lack of charging infrastructure. Therefore the B2B segment is expected to drive EV adoption on the back of established use-cases, fixed/pre-defined routes, and cost savings due to higher utilization.
However, there are still challenges to be expected in the B2B segment.
2W segment
Delivery boys are reluctant to invest in e2Ws when the technology is unreliable and are not aspirational to them
Current e-Bikes in the market come with low range and less warranty as compared to the life of the bike
Lack of financing options
3W segment
Limited products in the market catering to the cargo segment
High purchase price on account of higher battery requirements
Limited charging infrastructure
To summarize, there is great promise in India’s EV story, as a host of factors such as TCO parity, policy measures, infrastructure development, and a market buzz come together to drive long-term growth.
Uber adds e-rickshaws to the platform, deploys 100 such vehicles in Delhi. Delhi has become the first Indian city where Uber has deployed e-rickshaws for enabling first and last-mile connectivity. With a fleet of 100 such vehicles, the micro-mobility product on the Uber app will allow users to book first and last-mile connectivity as well as short-distance commutes at 26 metro stations in Delhi. This is part of Uber’s commitment to making all rides on its platform 100% emission-free by 2040. Earlier Uber had partnered with Yulu to launch smart and affordable micro-mobility options in Bengaluru.
Ola plans to set up an e-scooter manufacturing plant in India. As per a report in LiveMint, Ola Electric is planning to set up an e-scooter manufacturing plant with an annual capacity of about 2 million units. The EV mobility company is in discussions with state governments of Karnataka, Tamil Nadu, Andhra Pradesh, and Maharashtra who have launched EV policies that provide supply-side incentives and sops to manufacturing companies. If the plan goes through, this plant will be the world’s largest 2 wheeler plant - currently, the largest two-wheeler manufacturing facility in India belongs to Honda in Gujarat that has a production capacity of 1.2 million units per year.
Okaya installs over 500 EV charging solutions Okaya claims it has so far installed 500 chargers for electric vehicles and has an order book of over 10000 chargers. A flagship of the Okaya Group, the company's e-mobility ecosystem portfolio includes AC and DC fast chargers for passenger cars and commercial vehicles, besides high voltage EV chargers, cloud-based central management systems, on-board chargers, among others. Earlier this year, Okaya Power’s electric mobility business partnered with Prakriti E-Mobility, BluSmart Mobility, and PGCIL for setting up chargers.
400 EV charging stations to come up across AP In a major push to the electric mobility sector, the Andhra Pradesh government has decided to establish 400 charging stations across 83 locations. The state plans to attract investments to the EV sector by setting up electric vehicle infrastructure at a cost of Rs 250 crore and establishing charging stations every 25 km on national highways.
Inverted Energy opens a new lithium-ion battery plant in Okhla. Inverted Energy inaugurated its 100Mwh lithium-ion battery manufacturing plant in Okhla, Delhi. The plant will primarily manufacture lithium-ion batteries for e2Ws & e3Ws along with home storage and solar batteries used for commercial, industrial, and utility services. As per the co-founder, the company wants to drive change towards lithium-ion batteries which are more reliable, cost-effective, durable, and made-in-India, which would help reduce dependence on imports.
Gujarat seeks manufacturers for 5,000 e-rickshaws and 10,000 E2Ws Gujarat Energy Development Agency (GEDA) has floated an EOI to market and distribute 5,000 battery-operated three-wheelers with lithium-ion batteries in the state. The tender has been floated under the GEDA’s battery operated vehicles subsidy program 2020-21. The last date to submit the bids is November 12, 2020, and the opening of bids will also take place on the same date. Interested bidders will have to submit an amount of ₹15 lakh as the earnest money deposit (EMD).
Ather to charge up EVs in Hyderabad In line with Telangana’s recently unveiled Electric Vehicle and Energy Storage Policy that aims to strengthen the charging infrastructure in the State, Ather Energy has announced that it has begun setting up its fast-charging public network in Hyderabad. Known as Ather Grid, the charging network can be used by all-electric two-wheelers and electric four-wheelers to locate and check the availability of the nearest charging stations in real-time. Ather is targeting 150 charging points across the country by Mar 2021.
Omega Seiki Mobility (OSM) will be investing Rs 200 crores At the eve of the opening of Omega Seiki’s first dealership for 3-wheeler commercial vehicles in Telangana, the company announced an investment of Rs 200 crores in the EV mobility sector. The investment will be towards the manufacturing of the vehicles, launching UnoXpress - the brand of last-mile mobility & cargo delivery services in Delhi NCR, Hyderabad, Bangalore, and Indore, and develop 2W & 4W cargo vehicles. The company looks to double down on the cargo/delivery segment which has seen high demand from e-comm companies post lockdown.
BMTC drops plans of leasing AC electric buses due to COVID-19 Citing losses incurred due to the COVID-19 pandemic, the Bangalore Metropolitan Transport Corporation (BMTC) has scrapped its plan of introducing air-conditioned electric buses in its fleet. Instead, it will lease non-AC electric buses and has floated a fresh tender to lease 300 such buses under the Centre’s FAME II scheme. Earlier, it had canceled two tenders in the past citing different reasons, including high operational costs quoted by private bidders.
Other interesting news:
China
Nissan to sell only electric and hybrid cars in China by 2025
‘Hydrogen Wars’ pit Europe vs China for $700 billion business
Volkswagen takes on Tesla with first ID.4 electric models in China
Nio surges 14% to record highs after doubling its EV deliveries in Oct 2020
Europe & US
Electrified cars outsell diesel for the first time across Europe
How Canada sparked a turnaround in fortunes of its EV future
The EV industry has a lot riding on the outcome of the US Presidential election
Tesla
Tesla Model 3 with new LFP battery now supercharges even faster?
With one million Tesla cars sold, focus now on expanding service capabilities
Other Auto