From horse wagons to iconic black and yellow Fiat Padmini cruising through the bustling streets of Indian metropolises, the evolution of taxis in India is rich and quite elaborate. It’s a journey that has also seen transformative changes, from the emergence of Ola and Uber to the current era of hassle-free electric vehicle cabs. 

The history of taxis in India also tells us that the highly unorganised sector underwent a major transition 10 years ago when Uber entered the country in August 2013 and Android smartphones were baptising Indian telecom users at a break-neck speed.

Up until the entry of Uber in India, autorickshaws (three-wheelers), too, remained the dominating force for passenger intracity transit. However, by the time 2013 ended, a majority of Indians were seen ditching traditional taxis, only to shift to the new ones – Ola and Uber. This is because Indians could now book cabs with a single tap on their smartphone and get discounts and free rides while using these services. 

On the other hand, a wave of new drivers entered this segment and joined Ola and Uber, lapping up handsome monthly earnings. Finally, the market was disrupted, dominated and captured by these new players, outpacing traditional taxis.

A decade later, history seems to be repeating itself, as a new race of taxi service providers has now started disrupting the ride-hailing market, freeing customers from inconveniences such as ride cancellations, surges, and subpar quality of services in many cases.

At the forefront of this seismic shift are Mayank Bindal and Jaydip Mukherjee, who want to address the existing pain points in urban transportation with their electric cab service, Snap-E Cabs.

Incorporated in 2022, the Kolkata-based startup offers several unique value propositions — from no-cancellation policies to no-surge fees — to passengers, who rely on the duopoly of Ola and Uber to move from point A to point B in the city.

Since its inception, the e-cabs provider has expanded its business significantly in Kolkata, with hardly any commitment to pipeline emissions. 

With a push from the government to increase passenger and commercial EVs in the country, the sector is expected to witness unprecedented growth soon. 

As per Vahan data, of the total 1.77 Lakh motor cabs registered till November 1 this year, more than 8K vehicles are electric. In 2022, the number stood at 1.14 Lakh versus 4.9K+ units.

Humble Beginnings Of The Bootstrapped Snap-E

When Snap-E initiated its operations in August 2022, the startup did not have an app and instead partnered with Uber to deploy its e-taxis on the streets of Kolkata.

Acquiring customers is one of the most challenging parts of app-based B2C businesses, cofounder and CEO Bindal told Inc42, reminiscing how the startup began its humble journey.

This very dilemma led Snap-E to opt for collaborating with Uber’s platform but with Snap-E’s branding on vehicles. This strategic decision helped the startup curtail the initial expenses associated with managing an app, customer relationships, and onboarding.

Much to everyone’s surprise, the startup witnessed a demand surge within two months of its operations. This also proved to be a huge learning curve for Bindal, who told Inc42 that they were able to disrupt the market and establish themselves just by streamlining the supply side of the sector. 

“After seeing an unexpected demand surge, we realised that the real problem was in supply and not demand, following which we launched our app in October 2022, which received 30K downloads within weeks, giving us the window to emerge as a separate brand,” Bindal said.

The Snap-E app today has 4-5 Lakh downloads, and the startup receives close to 12K-15K ride requests daily in and around Kolkata.

“Unfortunately, with supply being a challenge, we are only able to do anywhere between 2,500-3,000 rides a day,” he added.

To resolve the demand side of the issue, the cofounder wants to take his current fleet of around 600 EVs to 1,000 by March next year.

An Uber challenger, Snap-E has procured about 160-170 cars from leasing firms like Mahindra and Muffin Green. For the remaining cars in its current fleet, the startup has taken bank loans. 

According to Bindal, with about INR 20-22 Cr internal investment, Snap-E is bootstrapped so far. 

Snap-E’s Always On Roads 

 In addition to its B2C taxi service model, Snap-E also operates a B2B business segment. The company has established partnerships with corporations such as TCS, Wipro, Cognizant, and several others to offer pick-and-drop services to their employees.

“Compared to cities like Delhi, Mumbai, and Bengaluru, Kolkata is still more of a day city and there is little traffic post 11 PM. That is predominantly the reason that we thought B2B was going to give us a steady stream of revenue with the maximum utilisation for our cars. And since the IT companies need cars for employee transportation, we decided to tie up with them,” Bindal said.

Snap-E effectively deploys all its vehicles during the day, with approximately 30-35% of them dedicated to providing employee pick-and-drop services during the nighttime hours.

Currently, around 75% of the company’s total revenue is derived from its B2C operations, while the remaining 25% originates from its B2B engagements.

In terms of its overall business performance, Snap-E achieved a gross merchandise value (GMV) of INR 2.45 Cr in September alone. Over the past six months, the total GMV has amounted to INR 11 Cr.

Snap-E follows a pricing structure that entails a flat fee of INR 150 for journeys up to 5 Km. Beyond this initial distance, the charge increases by INR 22.5 per km.

Building The Ecosystem

We cannot ignore the fact that building a robust charging infrastructure is the most important aspect when it comes to increasing the number of EVs and boosting the overall EV ecosystem. 

Staying one step ahead in ensuring that its business runs seamlessly, Bindal said that Snap-E has established partnerships with various charge point operators (CPOs) such as Jio-bp, Tata Power, Chargezone, Evre, and others.

However, in the long run, the startup wants to do more than just depend on these CPOs. It wants to operate its own charging stations. 

Snap-E has already signed an MoU with Kolkata Port Trust for building the charging stations, and the authority is ready to give them parcels of land on lease for 20-25 years.

Furthermore, the startup has commenced the process of entering into contracts with various potential parking aggregators to facilitate the operation of its vehicles in key locations, including airports and railway stations.

Meanwhile, Snap-E aims to deploy 2,000-3,000 more cars in Kolkata in the next 18-24 months. Moving forward, the startup aims to expand to other cities that have less access to ride-hailing platforms.

Raipur in Chhattisgarh and Bhuvaneshwar in Odisha are the two Indian cities Snap-E is currently planning to foray into, all while expanding its footprint in Kolkata.

Meanwhile, the startup is in talks with some VC firms and angel investors to raise funds. If the talks move through, Snap-E may announce the news in the next few months. The cofounder, however, has not disclosed the amount that he wishes to pick.

It’s worth noting Snap-E competes with players like BluSmart, Uber, Ola, and others, making significant strides in the EV ride-hailing space. 

BluSmart, for instance, promotes customer-friendly features such as no surge fees and a no-cancellation policy, although its operations are currently limited to Bengaluru and Delhi-NCR.

Notable, Snap-E, too, is part of this rapidly evolving landscape and seems to be carving a niche for itself as one of the pioneering e-cab service providers.

However, going ahead, it will be fascinating to observe how the startup positions itself in the market in the years to come, especially when it comes to operating alongside established ride-hailing giants.

The post How The Uber Challenger Snap-E Cabs Is Disrupting Kolkata’s Ride-Hailing Market appeared first on Inc42 Media.

India is planning to cut import duties on electric vehicles to a range of 15-30%, specifically for vehicles priced between $25,000 and $35,000. This decision is part of ongoing discussions that gained momentum after Tesla engaged with the Indian government.

People aware of the development told Mint that at a 15% import duty, all completely built-up (CBU) vehicles will be on par with the import duty for completely knocked down (CKD) cars.

For the uninitiated, CKD and CBU are two terms commonly used to refer to types of assembled and imported cars. While CKD cars are assembled domestically with imported parts, CBU vehicles are imported as a whole unit.

Currently, CBU vehicles priced below $40,000 face an import duty of 70% while vehicles above this price face an import tax is 100%.

Though the Centre is expected to relax the import duty, it would also come with a few caveats, the publication reported. The EV players would have to begin local manufacturing in the next two to three years and there could also be a clause to claw back the import duty sop if the OEMs fail to do so.

The development comes months after Tesla boss Elon Musk made a second attempt to tap the Indian market and held talks with Prime Minister Narendra Modi on the matter.

“I am confident that Tesla will be in India and will do so as soon as humanly possible,” Musk had told the media during the meet in June this year.

The US-based automotive giant is targeting customers at the top end of India’s growing mass-premium EV segment and is not looking to be a luxury player, the Mint report added.

We must note that in 2021, Tesla was all geared up to launch its cars in India. However, due to high import duties and the government’s decision to not compromise on that front as a step to boost domestic manufacturing, made the company stall those plans.

In August this year, Reuters had also reported about India working on a new electric vehicle policy to slash import taxes to as low as 15%. However, Union Finance Minister Nirmala Sitharaman said soon after at an event that there is no such proposal before the ministry.

It goes without saying that reducing import duties for overseas EV companies will benefit those firms, while also intensifying the competitive landscape for Indian electric vehicle original equipment manufacturers such as Tata Motors and Mahindra.

Meanwhile, India’s EV adoption is now growing slowly and steadily. Of the total of 28.8 Lakh motor cars registered in India so far in 2023, more than 58K vehicles were electric, as per Vahan data.

The post India To Slash Import Duty On EVs To 15%, But There’s A Catch appeared first on Inc42 Media.

Electric two-wheeler registrations in India surpassed the 70,000 mark after four months in October, as vehicle demand for a handful of manufacturers continued to witness a sharp rise.

On a month-on-month (MoM) basis, two-wheeler EV registrations rose 9.8% to 70,248 units in October, as per Vahan data on October 31.

However, the market continues to be dominated by only a handful of players like Ola Electric, TVS Motor, Ather Energy, and Bajaj Auto, while the likes of Hero MotoCorp and Lectrix EV have also started gaining traction. 

Despite the company being involved in various controversies, Ola Electric’s escooter registrations continued their uptrend. The IPO-bound company’s registrations jumped 18.6% MoM to 22,169 units in October.

Ola Electric’s founder Bhavish Aggarwal said on X (formerly Twitter) that its escooter sales grew almost 30% in October compared to September.

“Very strong start to the festive season by the Ola Electric team! Our sales grew almost 30% Oct over Sep! The Futurefactory is running at full speed and everyone working more than 70 hours to fulfil all the demand!” Aggarwal’s post read.

In September, Ola Electric’s vehicle registrations, as per Vahan data, stood at 18,691 units.

Meanwhile, the startup is also expanding its product line. It announced the launch of a new escooter model Ola S1X in August this year, days after it started the delivery of its Ola S1 Air model to the customers.

Ola Electric continues to lead the show for electric two-wheeler sales in the country despite numerous complaints about its products and after-sales service quality on social media platforms. Last week, an Ola Electric escooter caught fire in Pune but the company blamed it on ‘aftermarket parts’.

Meanwhile, TVS Motor retained its second position for yet another month. However, its escooter registrations declined marginally to 15,507 units in October from 15,584 units in September.

TVS Motor is also bolstering its EV product line up. Recently, it launched an INR 2.5 Lakh escooter, TVS X, which is currently the most expensive escooter in the Indian market.

During its recent earnings announcement, the domestic automotive giant said it would launch multiple new products to build a complete EV product portfolio over the next eight quarters. TVS also plans to ramp up its iQube escooter production to 25,000 units per month in the coming days.

Is A New Trend Emerging?

Bajaj Auto’s EV registrations surpassed those of Ather Energy in October, allowing the former to grab the third position from the latter. 

Bajaj Auto saw almost an 18% jump in its electric two-wheeler registrations to 8,373 units in October from 7,097 units the month before. On the other hand, Ather Energy’s escooter sales rose over 11% MoM to 7,957 units this month.

Ather Energy said in a statement that it has delivered 10,056 scooters to its customers in the month, registering about 30% MoM growth. With Diwali just around the corner, the e-mobility startup expects this positive momentum to continue.

It is pertinent to note that some of the EV leaders of last year, including Hero Electric and Okinawa Autotech, continue to see a decline in their registrations this year.

In October, Hero Electric’s EV registrations fell 24.5% to 636 units from 843 units in September. In October last year, the company’s vehicle sales stood at 8,869 units.

Okinawa Autotech saw its vehicle registrations decline over 22% MoM to 1,392 in October this year, which is also in sharp contrast with its 14,953 units of escooter registrations during the same month last year. 

Interestingly, a few new players in the market are seeing a rise in their registrations. While Hero MotoCorp saw an over 200% jump in its vehicle registrations in October to 1,833 units, Lectrix EV’s vehicle registrations stood at 1,021 units, up 39% MoM.

Overall, total EV registrations across categories grew to 1.32 Lakh units in October from 1.28 Lakh units in September.

As of today, a total of 12,27,195 EVs have been registered in India in 2023.

The post Two-Wheeler EV Registrations Cross 70K Mark In October; Ola Electric Retains Top Spot appeared first on Inc42 Media.

The EV financing industry has finally ventured into the AI phase of the digital marathon – a journey that started with the advent of the internet and has later taken organisations through a revolutionary digital transition. 

No doubt that AI-enabled solutions have the potential to empower enterprises to achieve greater operational efficiency, measure Key Performance Indicators (KPIs), gain crucial insights into customer beliefs and leverage the ability of data analytics. 

When we look at where AI is making its mark in the market, the EV industry is no exception. AI-powered tools can accelerate EV adoption, taking it on an exponential growth journey through its implementation in boosting EV financial service providers. 

The emergence of AI is making disruptions in the physics of the EV financing industry by transforming the quality of the products and services offered by the EV financial lending market. 

Not only has it helped in delivering exceptional customer experience, but it has also simplified and redefined traditional lending processes making them more efficient, leading AI to become an invaluable asset for the EV financial service organisation. 

End-To-End Digital Lending 

Advanced B2B SaaS technology has enabled the creation of holistic platforms that seamlessly connect lenders and borrowers providing access to financing services within minutes. This paperless approach backed by AI technology automates loan consent procedures allowing customers to access multiple banking services and making EV lending a seamless process for everyone. 

The in-depth AI-driven products help in end-end control of loans starting with credit inspection and customer onboarding to easy disbursal and long repayment periods, paving the way to mitigate financial bottlenecks in the country’s EV sector and enhancing EV adoption. 

Credit Risk Assessment  

One of the primary challenges to EV lending is the lack of credit history, particularly among the underprivileged which makes EV adoption an inaccessible option for the majority of the population. 

The strong credit examination procedures built with AI and ML algorithms allow access to unit data and third-party transaction data permitting accurate evaluation of creditworthiness, thereby assisting lenders to overlook the lending risk.

This innovation enables lenders to offer loans to the underserved, paving the way for boosting EV adoption and creating a financially inclusive society. 

Fraud Prevention 

With the rise of digital transactions, there is a significant surge in fraudulent activities and until recently, EV lenders were using traditional monitoring and screening systems which generated a high number of false positives. 

By embedding enhanced AI components within the existing systems, EV financing organisations can swiftly analyse vast data to detect anomalies and behaviour patterns associated with such activities. 

This proactive approach permits AI to prevent fraud as opposed to the reactive approach of detection, ensuring that both lenders and customers are protected from the vulnerabilities of fraud. 

Data Protection 

Leveraging AI-based technology, the lending process ensures the highest possible level of security, safety, and privacy for both the lender and the borrower. 

The proprietary lending platform enables inexpensive and consistent management of the entire lending life cycle, being powered by the latest blockchain technology and protocols assures transparency and accuracy of data and creates a safe environment among all EV financial service lenders and stakeholders, strengthening EV financing services and optimising EV fleet management. 

Unlocking EV Lending Accessibility 

AI-driven chatbots and virtual assistants are becoming the new face of customer service in the EV lending marketplace. Capable of providing round-the-clock assistance, answering real-time queries and guiding customers through the transaction process, this technology empowers individuals residing in remote regions to have equal access to EV financial services without any geographical limitations. 

Predictive Analytics aids lenders in knowing about the financial needs of potential EV buyers, providing timely delivery of financial services and offering tailored financing options based on the selection of EVs and the credit history of the buyer.

Final Thoughts 

In this journey towards EV acceleration through enhanced EV financing, AI possesses the capability to tear down traditional financial barriers and create a financially inclusive nation by boosting employment opportunities with increased EV adoption. 

As the nation continues to move forward, it is essential that EV financial service enterprises tap into AI technological advancements making strides in EV acceleration.  

The post Data Protection And Transparency: The AI Advantage In EV Financing appeared first on Inc42 Media.

Karnataka has attracted investments worth INR 25,000 Cr across the entire value chain of the electric vehicle (EV) sector, the state’s large and medium industries minister M B Patil, said.

As per a PTI report, the minister said these investments encompass battery pack and cell manufacturing, component production, original equipment manufacturing (OEMs), charging, and testing infrastructure.

Patil added that an additional investment of INR 15,000 Cr is expected to flow towards research and development in the EV sector. The minister was speaking at the launch of the EV mobility centre of excellence and innovation at JSS Academy of Technical Education, Bengaluru (JSSATE-B).

He said that the development of the overall auto and EV ecosystem in Karnataka will create significant employment opportunities. 

“To ensure a skilled workforce, we have proactively partnered with leading companies such as Tata Technologies and Siemens,” Patil was quoted as saying.

Talking about the EV mobility centre, the minister said it would serve as a hub for training, research, and innovation in the EV domain, preparing graduates for entrepreneurship, enhancing workforce skills, promoting globally relevant technology, fostering collaborative partnerships, and offering incubation and skill development.

Meanwhile, he also informed that Karnataka has registered around 2 Lakh EVs, the third highest in the country. As per Patil, Karnataka is home to over seven auto OEMs, more than 50 auto component manufacturers, and over 45 EV startups.

It must be noted that two of the largest two-wheeler manufacturers – Ola Electric and Ather Energy – are housed in the state, along with several others like Ultraviolette Automotive, River, and Altigreen. 

Besides, the number of battery and charging players is also increasing, with the likes of Exponent Energy, EMO Energy, Electric Pe, and Bolt.Earth also operating from Bengaluru.

In 2017, Karnataka became the first Indian state to roll out an EV policy.

The development comes at a time when a number of global companies are also looking to set up manufacturing plants in India to get a share of the fast-growing EV market of the country. The likes of Tesla, Vin Fast and Acer plan to set up plants in the country to produce EVs.

The post EV Investments In K’taka Pegged At INR 25K Cr, An Additional 15K Cr To Fuel R&D: Minister appeared first on Inc42 Media.

Tesla’s now-on, now-off India entry is uncertain as usual, with the latest media report suggesting it may not happen until the end of 2023. However, India has seen a remarkable surge in electric vehicle (EV) sales this year, with more than 100K EVs sold per month. It is worth noting that these sales figures don’t include the low-speed electric vehicles that do not need registration.

According to the Ministry of Road Transport and Highways, more than 1.1 Mn have been registered as EVs in the current calender year 2023. Out of these, 500K+ are two-wheelers (2Ws) and 350K+ are three-wheelers (3Ws).

As EV sales continue to rise despite a global semiconductor shortage and a general scarcity of raw materials, ‘green mobility’ enthusiasts remain only too vocal about the simplified mechanics of these vehicles and their ultimate advantage. An EV has around 200 moving parts, as opposed to more than 1,000+ moving parts found in conventional petrol or diesel cars with internal combustion engines (ICE).

Therefore, electric vehicles might require fewer repairs than their ICE counterparts, and repairing/servicing could be less expensive for EV users.

Setting up charging stations at showrooms and service centres will enable dealers to transform their service areas and cater to EV requirements. Plus, it will earn them incentives as EV manufacturers and all related service providers get subsidies under FAME II (Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India, Phase II) and various state policies.

Also, the widespread adoption of electric models may reduce India’s overdependence on imported crude and its derivatives, currently catering to more than 85% of the country’s total energy consumption. This has raised severe economic concerns as India’s trade deficit continues to widen due to pricier oil, influenced by international market dynamics and policies of oil-exporting nations.

Consider this. The country spent a staggering $145 Bn+ on crude imports in FY22, equivalent to 4% of its GDP for that year. And the export-import gap reached $24.16 Bn in August 2023, the biggest ever since a $26.9 Bn deficit in October last year.

In contrast, power tariffs in India are relatively stable, unlike the drastic fluctuations in petrol and diesel prices. Hence, the additional power usage tends to impact EV users less instead of compounding the financial burden on average citizens. However, there are challenges associated with equitable power distribution across the country, which may increase the overall costs of EV ownership.

Moreover, ICE vehicles are notorious for their low power efficiency. Their energy usage is around 20%, while the rest is wasted as heat. On the other hand, EVs have high energy efficiency levels, ranging from 87% to 95%, meaning they convert a high percentage of the energy into useful propulsion. This explains why EVs are the ubiquitous choice as a green and affordable mobility option, even though they own just a tiny slice of the global auto market (15% of total sales, according to Statista).

But here lies the catch.

The Indian government has already announced its EV 2030 goals, intending to replace 30% of private cars, 70% of commercial vehicles and 80% of two- and three-wheelers with EV options. But how many Indians will be able to own one even when tax incentives and fuel savings are factored in?

Even in a high-income and credit-powered society like the US, Musk has recently drawn flak for slashing the prices of two Tesla models. Those who protested were aggrieved customers who had to pay in full before price drops came to boost Tesla sales.

No doubt, a price-conscious Indian market requires a thorough analysis to understand if buying an EV is more affordable now – whether loan rates and insurance costs are competitive or remain out of bounds for most people keen to make an EV purchase. In this article, we will do a detailed cost analysis to answer the following:

• Is EV ownership still costlier compared to ICE vehicles?
• Are interest rates on EV financing higher than what is charged for conventional vehicle loans?
• Is the insurance cost for EVs higher?

Electric Or ICE Vehicle: What’s Going To Cost Users More?

To assess the cost of owning an EV versus an ICE vehicle, we have compared the ex-showroom and on-road prices of Tata Nexon and Tata Nexon EVs at a Bengaluru dealership. A direct comparison of the similar models reveals a relatively modest price disparity ranging from (-) INR 50K to (+) INR 56K.

But when we compared a long-range variant with a larger battery, the price gap stretched to INR 2.6 Lakh.

It is worth noting that people often compare EVs with manual/standard-transmission ICE vehicles. MTs, where drivers manually do gear changes with the help of a gear stick, are cheaper than their automatic counterparts.

On the other hand, EVs are linear and thus automatic systems, as these do not require gearboxes or clutches for movement. EVs are quiet, ensure quick and smooth response and provide superior driving comfort, thus justifying their premium pricing, according to analysts.

For context, automatic transmission in ICE vehicles is available in different tech combinations, popularly known as AMT (automated manual transmission), CVT (continuously variable transmission), DCT (dual-clutch transmission) and TC (torque converter). However, they cannot provide a completely jerk-free experience as EVs do.

Price differentials are relatively small, especially for high-speed two-wheelers, when we include FAME incentives. As for 3Ws, the price difference amounts to INR 30K or so, which is less than 10% of the overall cost, pointed out Deb Mukherji, managing director of Anglian Omega Group, the parent company of Omega Seiki Mobility. The Delhi-based group currently operates in six countries and specialises in 3W commercial vehicles.

“As for 3Ws, all of which are commercial vehicles, we have considered 10.8 kWh batteries in the L5 category. Again, the price difference in comparison to their ICE counterparts is around INR 30K, less than 10% of the total cost. Thus, the price difference for EVs have dropped significantly from 30% to around 10% in the last one year, added Mukherji.

Are EV Loans More Expensive Than Conventional Automobile Loans?

Oil prices may have gone through the roof, but do Indian lenders feel as excited about EV financing as their potential customers? EV four-wheelers are still considered a luxury worldwide, and consumer incentives are often regarded as luxury-subsidising.

This is not the case in India, where 2Ws and 3Ws rule the landscape and are primarily valued as utility vehicles. But banks and other FIs feel that the segment is still nascent, and the resale/residual value of an EV may not pass muster when a loan goes bad or a non-functional vehicle turns up at their doorstep.

To gauge the cost of EV financing compared to ICE vehicle loans, we have analysed the interest rates charged by leading Indian banks.

The data presented above clearly shows that interest rates on EV loans are lower than ICE rates or on a par.

However, Sumit Chhazed, founder and CEO of Bengaluru-based bike-lending platform OTO Capital, has differentiated lending models. “There are top-selling EV 2W models from companies like Ola, Ather, TVS and Vida. You can get interest rates similar to ICE vehicles when you buy those. However, loans for not-so-popular EV 2Ws are either unavailable or incur higher interest rates,” he said.

Interestingly, most of the top e-bike buyers have better CIBIL scores than ICE customers, Chhazed added.

Seconding Chhazed, Sumeru Shah, business head, EV(2W), Ecofy said that the availability of electric vehicle (EV) financing solutions has now become more comparable to traditional internal combustion engine (ICE) vehicle financing. Many financiers from the ICE category have transitioned to provide financing options for EVs.

However, a significant challenge facing these financiers is the lack of a complete loan cycle history for EVs in their current state. This makes it difficult to assess the residual value and determine the vehicle’s worth at the end of the loan term, which in turn affects collection and repositioning strategies in case of customer defaults.

In terms of availability, financing options for EVs are now widespread, with many financiers offering solutions for both EVs and ICE vehicles. Some parameters, such as Loan-to-Value (LTV) ratios, maybe slightly lower for EVs, typically around 5% less than for ICE vehicles, Shah added.

The loan dynamics are different for commercial 3Ws and commercial 2Ws, primarily used for goods delivery. In these cases, EV interest rates tend to be 4-5% higher than the ICE segment due to asset and business risks.

Asset risk stems from concerns over loan defaults as banks and other lenders often worry about the resale value of repossessed EVs. To deal with this challenge, companies like Omega Seiki offer buyback guarantees to banks, promising to repurchase a vehicle if the borrower defaults, said Mukherji.

Business risks are closely linked with the use of commercial vehicles within distribution networks. For instance, many individuals invest in commercial two-wheelers to cater to on-demand food delivery services. But the underlying risk is rooted in possible service discontinuation in a specific area. This will leave the vehicle owner with a significantly depleted income and heighten the risk of a default.

However, media reports indicate that the regular recovery mechanisms are rarely pressed into service in such cases for fear of ‘bad’ publicity. Moreover, Chhazed observes that international funds, especially those supported by the World Bank, Asian Development Bank, the International Finance Corporation (IFC) and other international financial institutions, actively promote clean technology alternatives.

This gives lending companies access to capital at favourable rates when investing in the electric vehicle market. Understandably, nothing should go wrong in this segment, least of all lenders’ high-handedness leading to conflicts.

Given these ground realities, assessing the cost of EV financing cannot be binary – a straightforward ‘high’ or ‘low’. It varies depending on the vehicle segment. Also, more changes are anticipated when the Reserve Bank of India (RBI) puts EV financing under priority lending, potentially increasing the proportion of loans available for this sector.

How Affordable Is EV Insurance

The insurance costs observed at the Tata showroom reveal a near-parity between EVs and ICE vehicles. In fact, the insurance premium for Tata Nexon EVs is slightly lower at 5.4% compared to 5.55% for ICE Nexon models. But one should also keep in mind that insurance rates at showrooms tend to be somewhat inflated.

The cost dynamics are entirely different when buyers purchase insurance from independent providers. Generally speaking, insurance premiums for EVs tend to be 25-60% higher compared to their ICE counterparts, according to an official working for Digit Insurance. The company charges approximately INR 28K for insuring a Tata Nexon ICE vehicle, but the premium escalates to INR 44K for a Tata Nexon EV.

Other insurers like Acko also have similar variable rates, further emphasising that EV insurance is disbursed at a premium in the current market.

Disparities in insurance costs also underscore the complex interplay of various factors. These include the availability of spare parts, the relative novelty of EV technology and the perceived risks associated with EV insurance. But as the ecosystem matures and more components are produced locally, the cost dynamics will gradually align with traditional ICE vehicles.

Our Finding: EVs Will Be Way Cheaper!

In India, the cumulative running and maintenance costs typically amount to INR 17/km for diesel-powered vehicles. Of course, the country is not ready to go off diesel yet, especially when it comes to medium and heavy commercial vehicles. But small and light commercial vehicles may find viable alternatives among EV 3Ws. Despite a marginally higher interest rate of 4-5% on EV loans, it will not pose a significant impediment due to substantially reduced operational costs.

To understand this better, let us consider an individual who drives an ICE auto-rickshaw and typically earns INR 700-800 per day. However, Mukherji of Anglian Omega said the person could easily make at least INR 1,200 a day by shifting to an e-rickshaw. This would translate to an additional daily income of INR 500 (a 50% rise) after accounting for the daily expenses. This extra earning is bound to boost the driver’s financial well-being.

The pivotal role of technology is evident in this context. Operating an EV costs roughly one-tenth of a conventional vehicle’s per-km expense, approximately INR 12 for ICEs.

On the flip side, EVs will require battery replacements within three to five years, a substantial operational cost one cannot ignore.

Currently, most 2W batteries in India can last up to 1,000 charge cycles, while 3W and 4W batteries work for up to 2,000-2,400 cycles. This is an assumption based on the changing technology around batteries. For instance, while the new Nexon EV battery life cycle is not public yet, the older Nexon EV claims to have only 1200 life cycles. It is worth noting that these estimates correspond to a lower driving range compared to international standards.

For example, Chinese EV major BYD offers an impressive battery range of 4,000-22,000 life cycles and a driving distance of 500 km to 1,000 km. Tesla which offers a life cycle of 1500 also offers a range of around 640 Km.

In other words, a Nexon EV could run up to 3,60,000 km (300×1200) against Tesla’s 9,60,000 Km (640 km x 1500). Though Nexon still suffices the most Indian individual’s personal needs, this underscores the room for improvement within the Indian EV landscape, believe experts.

Further, while focusing the game of lifecycle vs range, India needs to focus on improving lifecycle as this will also keep the weight of EVs in check.

Battery prices in India saw a 30% dip in the past year, from $220 to $160. But it still exceeds the international baseline of $100, said Mukherji. Fortunately, a promising trajectory lies ahead, with industry behemoths like Tata Motors, Ola Electric, Reliance and Vedanta announcing their plans to make battery cells in India. This strategic shift is expected to yield a twofold benefit. Cost-efficient technologies will narrow the price gaps between homegrown and imported batteries and provide local manufacturers with a cutting edge.

In light of these developments, even the prospect of replacing a battery in three to five years should not pose a significant financial obstacle. The improvements expected in battery technology and affordability, coupled with the economic benefits of EV operations, will position electric vehicles as a compelling ‘green mobility’ choice.

Improvements in charging infrastructure are also important to address range anxiety. With growing investments in charging stations and a more efficient, widespread distribution, EV owners will likely have easier access to powering up. To meet its 2030 goals, India will reportedly require 46K public charging stations compared to 5.2K facilities currently operational in the country.

As most industry experts believe, electric vehicles are the future and are fast becoming a reality. But the teething problems continue to plague ‘adopting’ economies like India. By 2030, vehicles powered by fossil fuels are expected to lose momentum as big automakers gradually turn to cost-effective, environment-friendly options.

But it will require sleeker and better battery tech (EVs must be 50% lighter to reach sustainability goals, says carmaker Stellantis) and lakhs (or crores) of public fast-chargers to build a countrywide ecosystem. Once the scale is reached, prices will drop and one can break free of the ICE mould without much ado.

[Edited by Sanghamitra Mandal]

The post EVs Vs ICE Vehicles In India — What Costs More? appeared first on Inc42 Media.

Taiwanese tech giant Acer has entered the Indian EV market by licensing its brand name to mobility startup eBikeGo. This will allow the startup to use the Acer trademark to sell its escooters in India. 

As part of the partnership, eBikeGo will manufacture and design scooter model Acer MUVI 125 4G and sell it for INR 99,999.

In addition to the two-wheelers, eBikego will also manufacture three wheelers for Acer. 

The electric scooters will come with swappable batteries and can be customised for B2B use cases such as food and grocery deliveries, the company said in a statement.  The new model will offer a top speed of 75 km/h and a range of 80 km and qualifies for central and state government subsidies. 

The company said that the Acer MUVI 125 4G model will be available for pre-booking soon. Additionally, the company stated that it will roll out dealership opportunities.

Commenting on the scooter model, Acer’s global strategic alliances VP Jade Zhou said, “Sustainability and innovation are two important principles that the Acer brand is known for. The Acer MUVI 125 4G represents both and we are excited to see it coming to market in the near future.”

To this, Irfan Khan, CEO of Think eBikeGo added, “The Acer MUVI 125 4G represents our vision for a greener future. We believe it is set to become the preferred choice for urban commuters.”

With the growing demand for EVs across India, the market has seen many global and domestic tech giants venturing into the space, with new startups coming up as well. 

Tesla and VinFast are two major global automakers that have committed to setting up EV units in India. From renting an office space in Pune to meeting the top government officials and ministers, Tesla has already advanced in its plans. 

Meanwhile, VinFast announced that it would invest $150 Mn – $200 Mn in India to set up a completely knocked down (CKD) assembly unit.

Currently, Tata and Mahindra are the two major Indian automakers, who are selling EV four-wheelers in India. meanwhile, the two-wheeler EV space is being dominated by players like Ola Electric, Ather Energy, TVS Motor, and Hero Motocorp. 

Companies and startups started pouring into the space after the country saw a 300% surge in EV sales in 2022, as reported by Road Transport and Highway Minister Nitin Gadkari. Furthermore, he anticipated that the Indian EV market would reach $266 Bn by 2030. With 3 Mn registered EVs, the country saw EV sales skyrocketing 131%, surging from 25,100 units to 58,076 units.

Update: The copy has been edited to highlight that the partnership is a licensing agreement and the escooters will be manufactured and designed by eBikeGo.

The post After Tesla & VinFast, Global Tech Giant Acer To Sell EVs In India appeared first on Inc42 Media.

Electric vehicles (EVs) are driving a remarkable transformation in the way we approach transportation, ushering in a mobility revolution that carries significant implications for various industry stakeholders. 

Let’s dive into some compelling statistics and dissect the business aspects that underscore the pivotal role of EVs in shaping the future of mobility. 

Electrification And The Environmental Imperative

Growing environmental consciousness has spurred the adoption of EVs as a cleaner alternative to conventional gasoline-powered cars.

Ride-sharing platforms like Uber, Blusmart, and Lyft have transformed personal transportation. EVs are gaining traction among ride-sharing drivers due to their cost-efficiency and reduced emissions. 

According to a study by the Union of Concerned Scientists (UCS), the lifetime emissions of EVs are 50% lower than conventional vehicles, making them an ideal choice for ride-sharing services aiming to reduce their carbon footprint.

Autonomy And The EV Connection

Autonomous Vehicles (AVs) represent the vanguard of the mobility future, and their destiny is intricately linked with EVs. The transition to AV fleets promises to revolutionise public transportation and alleviate traffic congestion, as evidenced by the growing affinity for EVs among AV developers and operators. 

Importantly, our behavioral analysis indicates South Indian states, particularly Karnataka, Tamil Nadu, Telangana, Andhra Pradesh, and Kerala, are at the forefront of consumer and research trends in AVs, presenting substantial business market opportunities.

MaaS: Revolutionising Urban Mobility

Mobility as a Service (MaaS) has emerged as a transformative phenomenon in the transportation industry. MaaS integrates various transportation modes into a single platform, including public transit, ride-sharing, car-sharing, and bike-sharing. 

One significant advantage of MaaS is its ability to provide personalized travel options tailored to individual needs. EVs play a pivotal role in MaaS due to their eco-friendliness and cost-effectiveness. Statistically, MaaS has the potential to reduce private car ownership in urban centers by 31.63% by 2030

Logistics & Last Mile Delivery

The logistics industry is leveraging advanced data analysis to optimize supply chains, analyzing delivery data, traffic patterns, and weather conditions for efficiency gains, enhanced customer satisfaction, and reduced costs. 

The industry aspires to reduce delivery costs to less than INR 70 for short-distance deliveries, a goal that electric two-wheeler companies have adeptly addressed. 

These companies enable non-licensed drivers to participate in the logistics ecosystem, leading to more cost-effective onboarding processes and the inclusion of a workforce segment previously excluded.

Charging Infrastructure

As per data from the Bureau of Energy Efficiency (BEE), as of July 31, 2023, 9,113 public EV charging stations were operational in the country, equipped with 15,493 EV chargers. However, significant gaps in EV charging infrastructure persist, primarily concentrated in major urban centers. 

The Indian government addresses this with subsidies, private partnerships, streamlined processes, and compatibility standards to boost EV accessibility and affordability. Governments worldwide are also making home-charging options more accessible through incentives.

Electricity Infrastructure In India: Meeting The Demand

As of August 2023, India faced a 4% electricity shortage, equivalent to 9.11 GW, per data from the Grid Controller of India. The electricity sector, divided into generation, transmission, and distribution, is overseen by governmental and private entities. 

India is exploring nuclear power to address generation challenges but faces capacity limitations in its aging distribution network.

Creating energy-efficient smart cities is crucial to redirect electricity for high-demand logistics systems, requiring substantial grid upgrades and repair investments. This transition demands significant commitments of time and finances, especially considering the heavy reliance on fossil fuels in the current electricity economy.

What Lies Ahead?

In summation, electric vehicles are catalyzing a transformative revolution in mobility. From mitigating carbon emissions to reshaping the future of ride-sharing, autonomous driving, and MaaS, EVs occupy a central position in the evolving transportation landscape. 

As technology advances and public awareness deepens, the symbiosis between EVs and the future of mobility stands poised to reshape our cities and redefine our journeys from point A to point B.

The post EVs And The Future Of Mobility: Tracing The Electric Arc Of Modern Mobility appeared first on Inc42 Media.

India, a country with a rich agricultural heritage, is witnessing a significant shift towards sustainable and eco-friendly practices in recent years. One of the key players in this green revolution is the biomass industry, which utilises organic materials to generate energy. 

Biomass, comprising organic materials such as crop residues, wood, and animal waste, is an abundant and renewable source of energy. With increasing environmental concerns and a growing demand for sustainable energy sources, the biomass industry is poised to play a pivotal role in India’s energy landscape. 

This sector is experiencing unprecedented growth, and its potential is far from fully realised. In this context, the integration of electric tractors is poised to play a pivotal role in propelling the biomass industry forward. 

This article delves into how electric tractors can catalyze the growth of the biomass industry in India.

The Booming Biomass Industry

India is an agricultural powerhouse, with a vast expanse of arable land and a predominantly agrarian economy. The agricultural sector generates a substantial amount of crop residues and organic waste. 

Historically, these residues were often burned in the open, leading to air pollution and the release of greenhouse gases. However, as environmental awareness grows, there has been a shift towards utilising biomass for energy generation.

The biomass industry in India has witnessed remarkable growth over the past decade. It encompasses a wide range of activities, from the generation of bio-fuels and biogas to the production of organic fertilisers, biomass power plants and other valuable byproducts.

This industry is not only creating new economic opportunities in rural areas but also contributing significantly to the country’s efforts in achieving renewable energy targets and reducing its carbon footprint. However, to fully harness the potential of biomass, mechanisation is crucial and this is where electric tractors come into play.

Challenges Faced By Traditional Tractors

While the biomass industry holds immense promise, it is not without its challenges. 

Conventional diesel-powered tractors, which are the backbone of Indian agriculture, contribute significantly to air pollution and greenhouse gas emissions. 

Moreover, the rising costs of diesel and its impact on the environment have led to a growing demand for sustainable alternatives.

The Electric Tractor Revolution

Electric tractors are emerging as a game-changer in the agricultural sector, particularly in the context of the biomass industry. 

These vehicles are powered by electricity, making them a cleaner and more sustainable alternative to diesel-powered tractors. 

By eliminating tailpipe emissions, electric tractors significantly reduce air pollution and contribute to a healthier environment for both farmers and the surrounding communities.

Here are some key advantages of electric tractors in the biomass industry

• Zero Emissions: Electric tractors produce zero tailpipe emissions, which is crucial for maintaining air quality in agricultural areas. This is particularly important in biomass farming, where organic materials are grown for energy production.
• Cost-Effectiveness: Electric tractors have lower operating costs compared to their diesel counterparts. The cost of electricity is generally more stable than diesel prices, which can fluctuate significantly. Additionally, electric tractors have fewer maintenance requirements, leading to long-term cost savings for farmers.
• Reduced Noise Pollution: Electric tractors are considerably quieter than diesel-powered ones, reducing noise pollution in agricultural areas. This not only benefits farmers’ health but also improves the overall quality of life for communities near farming operations.
• Enhanced Efficiency: Electric tractors offer instant torque and smooth acceleration, making them well-suited for the demands of agricultural work. They can efficiently power implements used for biomass collection, shredding and transportation. This can result in higher productivity and cost savings for farmers.
• Sustainable Energy Integration: Biomass residues can be converted into biogas or biofuels for electricity generation or use in electric tractors. This closed-loop system maximises resource utilisation and minimizes waste. The synergy between the biomass and electric tractor industries promotes a circular economy and reduces dependence on fossil fuels.
• Energy Independence: The adoption of electric tractors can drive rural electrification, especially in regions with unreliable or limited access to grid power. Farmers can use their tractors to generate electricity for their homes and communities, fostering economic development in rural areas. By utilizing electricity, which can be generated from renewable sources, electric tractors contribute to reducing dependence on fossil fuels and promote energy self-sufficiency.
• Government Incentives: Many governments, including India, are offering incentives and subsidies for the adoption of electric vehicles, including tractors. These incentives can significantly offset the initial investment required for transitioning to electric farming equipment.

Challenges And Considerations

While electric tractors hold great promise, their widespread adoption in the biomass industry does face some challenges:

• Initial Investment: Electric tractors are generally more expensive upfront than conventional tractors. However, government subsidies and incentives can help mitigate this cost barrier. Banks and NBFCs will play a crucial role in overcoming the challenge of higher upfront cost and allow funds access to a new tractor owner to access a more productive machine.
• Infrastructure: Rural areas may lack the necessary charging infrastructure for electric tractors. Developing a network of charging stations in agricultural regions is essential for their widespread adoption. Simplifying the charging of an electric tractor with an on board charger can be a great way to get around the charging infrastructure challenge. 
• Battery Technology: Continued advancements in battery technology are needed to improve the range and durability of electric tractors, especially in heavy-duty applications like biomass processing.

In Conclusion

The biomass industry in India is at the cusp of a transformative revolution, driven by the integration of electric tractors. These vehicles not only align with the industry’s sustainability goals but also address critical environmental concerns associated with traditional farming practices. 

The industry is rapidly expanding, presenting a unique opportunity to address environmental concerns, create employment, and bolster rural economies. As technology continues to evolve and infrastructure improves, electric tractors are poised to become an integral part of the country’s agricultural landscape, leading the way toward a greener and more prosperous future.

Electric tractors are poised to play a pivotal role in this revolution by offering a cleaner, more efficient, and sustainable means of biomass collection and processing.

Government support, industry collaboration, and technological innovation are crucial to overcoming the challenges associated with the adoption of electric tractors in the biomass sector. By harnessing the power of electricity, India can not only revolutionize its biomass industry but also pave the way for a greener, more sustainable agricultural future.

The synergy between the two sectors can lead to cleaner energy, reduced pollution, and improved rural livelihoods, making it a win-win for both farmers and the environment.

The post Driving Sustainable Change: India’s Leap Into Electric Tractors And Biomass Energy appeared first on Inc42 Media.

Electric vehicle maker Ather Energy has joined hands with Nepal’s Vaidya Energy, a subsidiary of Vaidya’s Organization of Industries & Trading Houses (VOITH), to export its flagship e-scooter model, Ather 450X, to the neighbouring country. 

As part of the partnership, the companies will also launch an experience centre in Kathmandu next month. Under the deal, Vaidya will not only facilitate the sales of Ather’s products but also set up fast-charging stations, Ather Grids.

“We see Nepal’s automobile market as a microcosm of the rising global consciousness over switching to cleaner mobility choices. In line with our ecosystem approach of market creation, we will also roll out our public fast-charging infrastructure, which has proven to be a huge differentiator for us in India,” Ather’s chief business officer Ravneet Phokela said.

He added that Ather is looking forward to leveraging Vaidya’s extensive experience and established expertise in the automotive retail sector to enhance the customer experience. 

Meanwhile, Ather will introduce its flagship model in two battery options — 2.9 kWh and 3.7 kWh, in the country. 

“Our vehicles not only offer a thrilling experience but also contribute significantly to cost savings, added convenience, and reduced commute times. We pledge to develop the whole ecosystem and focus on the customer experience, whether it comes to the product itself, its services and the infrastructure,” Vaidya Group CEO Suryansh Vaidya said.

Founded in 2013 by Swapnil Jain and Tarun Mehta, Ather is a Hero Motocorp-backed EV maker, which boasts its presence in more than 100 Indian cities, along with 150 experience centres. The company claims to have made India’s first smart and connected electric scooters.

Further, the two-wheeler EV maker asserts that it has more than 1,500 Ather Grids (fast-charging points) across India. With its 3 Lakh sq ft Indian manufacturing unit, the company is looking to expand its production capacity to 4.2 Lakh units per year, starting this financial year. 

Last month, Ather Energy posted an FY23 loss of INR 864.5 Cr, which soared more than 150% year-on-year (YoY). The losses incurred were largely on the back of a steep rise in expenses, which more than tripled during the period under review to INR 2,670.6 Cr from INR 757.9 Cr a fiscal ago.

In the first week of September 2023, the company raised INR 900 Cr from its existing shareholders — Hero MotoCorp and GIC — through a rights issue.

During the same month, there were reports that Zerodha’s cofounder Nikhil Kamath was all set to join the company’s cap table by investing via a secondary stake sale.

The post Ather Energy Partners Vaidya Energy To Ply Its E-Scooters In Nepal appeared first on Inc42 Media.

In recent years, the push towards greener and sustainable mobility has been continually increasing. One of the core challenges we’ve been facing with the rising pollution is caused by ICE vehicles. 

With the rapid growth in ecommerce and urbanisation, the number of delivery vehicles on the road has surged. It adds to air pollution, traffic congestion, and greenhouse gas emissions. 

Electrifying last-mile deliveries can significantly address this challenge by promising a more sustainable supply chain while delivering tangible benefits to businesses, drivers, and the environment alike.

The Urgency Of Electrifying Last-Mile Deliveries

In India, last-mile mobility and deliveries account for 66% of daily trips, which accounts for around 200 million journeys. While it has been facilitating convenience and connectivity across the nation, they are one of the major contributors to the rising pollution levels. 

The connection is clear: more kms covered equals a heavier environmental toll. Electric vehicles (EVs), being cleaner, greener, and more energy-efficient compared to traditional internal combustion engine (ICE) vehicles, hold the potential to drastically reduce pollution when used in delivery fleets.

The last-mile delivery model used by businesses these days could be more optimal. Currently, individual drivers usually have to use their own vehicles for making deliveries for different brands. 

They have to continually switch between multiple platforms for securing orders, from grocery delivery, ride-hailing, food delivery, and logistics apps. This process becomes inefficient since drivers can not anticipate which brand will have higher demand at specific times or locations. 

It exhausts drivers, increasing both their time spent and costs. This approach doesn’t support environmental goals or ensure long-term economic sustainability.

Fleet Electrification: Powering Sustainability In Supply Chains

The global automotive industry is undergoing a paradigm shift, transitioning from fossil fuels to alternative energy sources. Given the mounting pollution levels and natural resource depletion, environmentally conscious nations are increasingly turning to electric vehicles. 

With India’s commitment to reduce carbon emissions by one billion tonnes by 2030, the country is promoting the use of electric cars as the primary transportation for commuters. Over the past few years, the electric vehicle industry has experienced remarkable growth. 

Further, with India setting its sights on achieving zero net emissions by 2070, it is steadfastly working toward electrifying over 30% of new vehicles by 2030. This is where tech-driven companies come into play, revolutionizing the game by providing EVs as a service. Their innovative platform-based approach is aimed at promoting sustainability across the board.

A complete shift to electric vehicles can significantly diminish the carbon footprint associated with ICE two-wheelers, commonly used for last-mile deliveries. Simultaneously, tech-savvy companies are redefining the driver experience. 

They are establishing an ecosystem where drivers can seamlessly switch between different service-based platforms based on demand, optimizing vehicle utilisation and boosting driver earnings. 

Modern platforms, integrated with AI, facilitate the efficient management of vehicle charging and battery swapping. Concerns regarding charging infrastructure and battery availability are being addressed through real-time notifications, guiding drivers on when and where to charge or swap batteries, effectively eliminating range anxiety.

Huge Job Creation Opportunity

In the realm of last-mile logistics, the prospect of significant job creation looms large. 

This intriguing opportunity allows delivery personnel to switch to electric vehicles, presenting an environmentally friendly solution without requiring any financial investment on their part. 

This change has the potential to increase both employment and sustainability in the delivery industry.

Charting The Course Ahead

Electrifying last-mile deliveries not only significantly reduces carbon emissions but also yields sustainable long-term operational costs when compared to traditional petrol-powered vehicles. 

It will also lead to cleaner air, improved efficiency, and a genuinely sustainable supply chain. This is in line with India’s vision of electrifying the country’s fleet by 2030 while keeping the efficiency of deliveries intact. 

As we move towards an electrifying fleet, we are transforming last-mile mobility and forging a path towards a greener and prosperous future.

The post Revolutionising Last-Mile Logistics: Powering Sustainability In Supply Chains appeared first on Inc42 Media.

Electric Vehicles and India’s path towards adopting them have been making headlines for all the right reasons lately. The ‘will he or won’t he’ saga surrounding Elon Musk and Tesla’s plans for India has been taking up a lot of the headlines as we continue to speculate on their India plans. 

That is unfortunate at one level because there is so much more happening in the EV space. Recently, Mumbai saw the first electric double-decker bus in India from Switch Mobility come onto its streets powered by the Chalo platform. And not just double-deckers, we see public transportation in cities across India getting electrified with almost 2,000 electric buses sold in FY23. 

Not just electric buses, but electric three-wheelers and now even electric two-wheeler taxis. The massive advantages of operating an electric fleet over a fleet of aging and polluting internal combustion engine vehicles are manifold, from not just reduced operating costs but lower maintenance as well. 

Most, importantly, this has given state-run public transport corporations the ability to explore new models of operations that benefit both consumers and the state. And with the ongoing funding winter, shared mobility companies are focusing on profitability instead of just growth, and EV’s are playing a major role.  

But What About Intercity Travel? 

While many of you reading this would have noticed the growth of Indian aviation and the railways with the massive investments in infrastructure including the Vande Bharat Express trains, did you know that for many Indians buses remain the most affordable and in many cases the easiest and quickest way to travel. 

The overall size of the intercity bus transport market is estimated at over $15-20 Bn in India and with significant investments in highway expansion is growing at a 10% CAGR. But it has also been woefully ignored in terms of investment and technology innovation. This is why you hear of tragic accidents involving such buses far too often.

A clear change that can be driven is the electrification of intercity bus transport, these buses will not only be cheaper to run, but because of the in-built safety features of these buses, which could include multiple advanced driver assistance systems (ADAS), it would also make intercity buses safer to run.

Is High Capital Cost A Deal Breaker?

Of course, there are valid questions to be asked about the large capital costs of electric buses and also the charging ecosystem. The latter issue is being addressed rapidly, those double-decker buses for Mumbai, they are actually being driven down from the Switch Mobility factory in Tamil Nadu to Mumbai and being charged multiple times along the way. 

Particularly in the south and the west of India, networks of high-speed commercial Direct Current (DC) chargers are being established and this trend should also move to the north of the country soon. 

As such buses often take breaks every 250 km or so and a network of fast chargers, along with systems like ‘double gun’ chargers – that is the ability to charge from two separate points at once – will make it possible to re-charge a bus rapidly during a meal or comfort break.

Adoption of these new electric buses will also help operators reduce their operating costs and stay clear of the expenditure on fuel and lubricating oils for periodic maintaince. Using new models encouraged by urban public transport, private operators and the state transport corporations can collaborate on capital investments and streamline operations. 

In cases where states run intercity buses, they can collaborate with technology-driven private operators to run these services for them, with private players taking on the capital costs for setting up the infrastructure. 

By privatising the system, innovative financing models can be trialled for the electric bus ecosystem with manufacturers, private equity and traditional financial institutions working together. After all, state-run transport corporations are almost as indebted as state-run power distributions according to an Observer Research Foundation (ORF) report. 

In Conclusion

We should not waste time, as there is an urgent need to revolutionalise India’s intercity bus ecosystem and going electricity can be the answer. It can help cut costs, emit less pollution on the ground, but most importantly also offer a safer and more reliable service for customers. 

Once the charging infrastructure is established using the captive demand for EV buses, the same can remove range anxiety for other EV form factors including personal cars & bikes, commercial vehicles etc. A true revolution in ending ICE age is happening. 

The post Electrifying Inter-City Mobility appeared first on Inc42 Media.

The popularity of ebikes isn’t slowing down. Driven by an increasing inclination towards sustainability and rising fuel costs, ebikes have certainly become an e-mobility alternative. Recent stats suggest – the e-bicycle market valuation in India is projected to touch $2.08 Mn by 2026, higher than the $1.02 Mn recorded in 2021. 

The humongous jump in demand is further reflected by an increasing acceptance of EVs in India, starting from electric two-wheelers to now evolving into e-bicycles.

Though the sector is still at its nascence, Tier 1 cities like Mumbai, Delhi, Bengaluru, etc. are the leading drivers of e-bicycles’ growth where commuters look for affordability, sustainability and at the same time, an alternative that can offer an enhanced commuting experience.

Usually, there are two types of e-bicycles – throttle assist which allows the rider to shift into motor mode and move forward without pedalling and pedal assist which requires the rider to pedal the cycle manually.

The evolution of e-bicycles is gradually outpacing the demand for traditional bicycles as it minimises human effort by 70-80%. 

As the industry is innovating itself, several other factors are contributing to its phenomenal growth.  

Rising Fuel Costs

The sheer affordability of EV adaption is leading to soaring sales of ebikes in India. For decades, two-wheelers or scooters have been an affordable choice of personal mobility. A vast majority of the Indian population has relied on such transport options. 

However, the exponential rise in the cost of petrol has pushed customers to switch to electric two-wheelers. 

Constantly rising fuel prices are one of the most sensitive drivers for EV penetration in India. Simply put, the ownership cost is a one-time investment for the consumer while it is cheaper to run than fuel-powered vehicles. 

Technology integration for new-age customers

Gone are the days when people used to pay a few pounds extra for purchasing a GPS-enabled bicycle. In today’s digitally driven world, ebikes are increasingly being integrated with new-age technologies to supplement evolving customer needs. 

The modern ebikes are becoming a game-changer in the advanced and greener world. Apart from boasting a futuristic design, the ebikes are also backed by a range of data-driven technologies.  

As consumers are prioritising fitness and adventurous experiences, ebikes are demonstrating their game-changing capabilities. These vehicles present a range of data related to the location, speed, calorie consumption, distance travelled and information on battery life. 

Ease In Financing And Accessibility

Ebikes, especially e-bicycles are considered costlier than standard electric two-wheelers due to their futuristic design, engine, high-power battery and tech enablement. To ensure that higher cost does not inhibit its overall sales, many industry players have started coming up with easy financing options like EMIs.  

This makes the vehicle more affordable and easy to finance. 

Besides this, a few ebike players have started combining their online marketplace with offline sales networks to create a strong and lasting bond with customers. This captures the essence of an ebike by allowing the potential customers to walk in and get the touch and feel or maybe a test ride before plonking their money onto it. 

Additionally, it assures the customers about the ease of ownership, service and after-sales support during the lifecycle of an ebike. 

Government’s Intervention

The Indian government is continuing to support the EV industry by implementing several measures at the state and centre levels. India’s manufacturing infrastructure demonstrates enormous capabilities to develop EVs and ebikes at a reduced cost. 

Subsequently, the government is doing its part by offering financial incentives and subsidies for ebike manufacturing. The government is providing subsidies under FAME and so far, it has announced initiatives like PLI Scheme, Battery Switching Policy, Special Electric Mobility Zone and Tax Reduction on EVs. 

Bottomline

The government has already realised ebikes are the cornerstone in achieving net-zero carbon emission. The industry stakeholders and other players must work together and provide an opportunity to engage with customers directly, get feedback, and improve product features and service. Also, establishing deep ties with the cycling community can help promote e-cycling as a sustainable lifestyle.

The post Why Future Of Mobility Is Electric appeared first on Inc42 Media.

After Tesla, Vietnamese electric car maker VinFast has announced plans to set up an electric vehicle (EV) unit in India.

In its Q3 2023 earnings release, VinFast said it would invest $150 Mn- $200 Mn in India to set up a completely knocked down (CKD) assembly unit. 

The EV maker said the new facility will start operations by 2026 and will be capable of making approximately 50,000 cars per year in the first phase. 

The automaker said that it aims to leverage the EV market opportunity in India, which is growing fast but has seen only 1% penetration. 

“We aim for our vehicles to be present in up to 50 global markets and countries by the end of 2024,” it said in the statement. 

The establishment of VinFast facilities in these markets can provide access to government incentives for local manufacturing, relief from certain tariffs and taxes and access to raw materials at attractive rates, the company said.

It must be noted that the Indian government has launched a production linked incentive scheme of over INR 25,000 Cr to boost domestic production of automobiles and related components, including electric vehicles.

Commenting on the company’s plans for India, VinFast chief financial officer David Mansfield said, “VinFast is on track to meet its deliveries guidance and is well-positioned to expand in strategic markets such as Indonesia and India.” 

Like India, the company also plans to set up an EV unit in Indonesia. 

India, the most populous country in the world, has emerged as an attractive market for global brands across sectors, including EV makers, over the last few years. While EV adoption has picked up pace in the country, it is largely led by two-wheelers. This provides an opportunity for global electric car makers to grab a big share in the Indian market.

Currently, the likes of Tata, Mahindra and Hyundai sell electric cars in India. Ola Electric also has plans to manufacture electric cars in the country.

Prior to VinFast, Elon Musk-led Tesla announced plans to enter India. From renting office space in Pune to meeting the top government officials and ministers, Tesla is gradually taking necessary steps to launch the business in the country soon. 

In August, Tesla officials reportedly met union minister Piyush Goyal to discuss the acceleration of its plans to establish a manufacturing plant in the country. In addition to opening up an all new facility, the company is also planning to source EV components worth $1.7 Bn to $1.9 Bn this year from local vendors. 

The US-based EV giant also plans to set up a battery storage facility in India. 

In addition to Tesla, Audi and Mercedes-Benz are also in the queue to grab the opportunities in the Indian EV ecosystem. 

The post After Tesla, Vietnam’s VinFast To Invest $200 Mn To Set Up EV Unit In India appeared first on Inc42 Media.

Electric two-wheeler registrations fell marginally by 1.8% month-on-month (MoM) to 61,576 units in September as major brands in the category continued to struggle to regain the sales numbers witnessed prior to the FAME-II fiasco.

As per Vahan data on September 30, the month of August saw 62,683 units of two-wheeler EVs getting registered. In fact, the slight fall in registrations in September came after two consecutive months of increase.

Though Ola Electric maintained the top position among two-wheeler manufacturers, its escooter registrations declined over 3% MoM in September. The Bhavish Aggarwal-led electric mobility giant’s registrations stood at 18,138 units as against 18,716 units in August.

The slight slump in its vehicle registrations came despite the company starting the delivery of its new S1 Air escooter by the end of last month.

In July this year, Ola Electric’s vehicle registrations stood at 19,377 units.

Meanwhile, TVS Motor retained its second position in terms of registrations but saw a 3.6% drop in number of units to 14,917 from 15,473 in August.

Similarly, Ather Energy’s escooter registrations dropped 3.3% to 6,892 units in September from 7,126 units last month. 

As per a recent media report, the Bengaluru-based electric two-wheeler startup is aiming to double its market share in the escooter market to 25-30% by the end of FY24. Currently, Ather Energy has about 11% market share in this category.

On the other hand, Bajaj Auto has started to gain momentum in the two-wheeler EV market. Its vehicle registrations increased to 6,791 units in September from 6,573 units a month ago. The Indian two-wheeler major was just behind Ather Energy in terms of vehicle sales.

Meanwhile, after a significant slump since the beginning of this year, Hero Electric has also started seeing signs of recovery. Its escooter registrations rose 4.2% MoM to 816 units in September.

Hero Electric’s vehicle registrations stood at 783 units in August and 779 units in July, slipping from 6,400 units in January this year.

It must be noted that Hero Electric was among the companies which came under the government’s radar for misappropriation of FAME-II subsidies. The company, along with more than a dozen others, paid penalties to the Centre and faced other regulatory restrictions for this. 

Hero Electric, which previously sold low-range, non-premium escooters, also entered the premium escooter market with the launch of its A2B brand last month. 

Moving on, Jitendra EV, which saw a slump in its vehicle demand over the last few months, saw a rise in its registrations in September. The electric two-wheeler manufacturer, which was in the spotlight for all the wrong reasons over the last few months, including EV fire and violation of FAME-II norms, saw its vehicle registrations jump to 160 units in September from 24 units in August and 18 in July.

However, other major electric two-wheeler manufacturers such as Okinawa Autotech and Hero MotoCorp continued to witness a decline in EV sales. Okinawa Autotech’s vehicle registrations fell 13.8% MoM to 1,724 units in September, while Hero MotoCorp saw almost a 43% decline to 523 units.

Overall, EV sales, including all categories, fell to 1,23,087 units in September from 1,26,907 in August.

The post Ola, TVS Motor, Ather Feel The Pinch As Two-Wheeler EV Registrations Slip In Sept appeared first on Inc42 Media.

Electric vehicle (EV) charging infrastructure provider Bolt.Earth is in talks with investors to raise $20 Mn in its Series B round at a valuation of $100 Mn, sources told Inc42. 

The funding round will be led by an EV-focussed venture capital fund and will also see participation from the startup’s existing investor Prime Venture Partners, the sources said. The talks are in final stages and the round would value the startup at about 4X its last valuation, they added. 

“The fundraise is likely to close in a week or so,” one of the sources said. Another source said some of the angel investors exited the startup via a secondary sale share earlier this year, making handsome returns on their investments. 

A Bolt.Earth spokesperson declined to comment on the queries sent by Inc42 on the fundraise. 

Bolt.Earth, earlier known as REVOS, last raised $4 Mn from Union Square Ventures and Prime Venture Partners in 2021 at an undisclosed valuation.

Bolt.Earth Races Past Its Rivals

Besides providing EV charging infrastructure, Bolt.Earth, founded in 2017 by Jyotiranjan Harichandan and Mohit Yadav, also offers an operating system (OS) which, the startup claims, helps EV run smoothly and provides a seamless experience. The OS offers features like real-time updates, remote monitoring, and software support.

The startup, which competes with the likes of Tata Power, Ather Energy, and ChargePoint, seems to have marched ahead of its rivals in terms of setting up an EV charging network.

In a release last month, Bolt.Earth said its customers include businesses, real estate operators, individuals and government entities, among others. The startup claims to have installed over 30,000 charging points across more than 1,000 cities in India, while its OS is installed in more than 20,000 EVs in the country.

“Our network has dispensed more than 1,000MWh of energy, and equipped more than 50,000  users with smart, safe, and simple engineered devices that cater to EV charging needs. We currently partner with eight 8 of India’s top 10 two-wheeler EV OEMs,” the release said. 

Bolt.Earth partners with OEMs and EV dealers, who offer bundled services with the startup’s charging solutions.

The startup also has partnerships with public sector companies like Hindustan Petroleum Corporation Ltd, Delhi Metro Corporation, Bengaluru Metro Rail Corporation, and Indian Oil Corporation, private companies like Cyient and LTI Mindtree, and real estate developers like Prestige, Sobha, and Divyasree. 

These partnerships seem to have played a major role in making the startup the “largest electric vehicle (EV) charging infrastructure solution provider” in the country. 

India’s EV Boom

The development comes at a time when EV adoption in the country is on the rise due to rising awareness about tackling climate change and the government’s efforts to promote EVs to reduce reliance on fuel imports.

The Centre has launched schemes like FAME-II to promote EVs and production-linked incentive schemes to boost domestic manufacturing of EVs, EV components and batteries. Besides, various state governments have also launched EV policies to increase the share of EVs in total vehicles.

Consequently, the number of EV makers and their products have increased dramatically over the last few years, with EV registrations in India surging 700% since 2020. This has resulted in the development of an entire EV ecosystem, including charging infrastructure providers, battery tech startups and aggregators, in the country.

The rise of the EV ecosystem has also attracted investors and the sector has emerged as a hot favourite for PE and VC firms and others. Earlier this month, IPO-bound Ola Electric signed an agreement to raise $140 Mn in a funding round led by Temasek. Ola’s rival Ather Energy also raised INR 900 Cr from existing investors Hero MotoCorp and GIC.

Among other major funding rounds in the EV ecosystem, mobility service provider BluSmart raised $37 Mn in May this year and charging infrastructure provider Charge Zone raised $54 Mn. 

Even as the sector is flush with funds right now and competition is intensifying, with a number of automakers as well as startups building EV capabilities, the EV ecosystem would require huge investments over the coming years. India is currently home to 3 Mn EVs and the sales of EVs are projected to increase to 10 Mn by 2030. This would not only require EV manufacturers to make investments but also huge amounts of capital would have to be deployed to proportionally increase the EV charging infrastructure.

As per a report by government think tank NITI Aayog, an investment worth $267 Bn will be required in EVs, battery infrastructure, and charging infrastructure to make a full transition to EVs.

The post Exclusive: EV Infra Provider Bolt.Earth In Talks To Raise $20 Mn, Eyes $100 Mn Valuation appeared first on Inc42 Media.

Continuing its attacks on the Ministry of Heavy Industries (MHI), industry body Society of Manufacturers of Electric Vehicles (SMEV) has alleged that the ministry’s decision to remove some of the small and medium sector electric vehicle (EV) manufacturers from the FAME-II scheme has led to the government subsidy now being used to prop up the bottom lines of loss-making original equipment manufacturers (OEMs).

The SMEV made the allegation in a letter written to finance minister Nirmala Sitharaman, questioning the MHI’s request for more funds from the finance ministry for the FAME-II scheme.

It must be noted that as per a recent report, the MHI is expected to seek an additional INR 1,500 Cr-INR 1,700 Cr from the finance ministry for the FAME-II scheme.

“Going by the calculation of unpaid subsidies of INR 1,200 Cr and claimed back amounts of close to INR 500 Cr, the MHI has already held back INR 1,700 Cr that was due for payment,” Sanjay Kaul, chief evangelist of SMEV, said in the letter to the minister. “To ask for another INR 1,700 Cr is difficult to understand unless it is to make good its outstanding to these OEMs.”

As per Kaul, the bulk of the government subsidy is now being funnelled to loss-making companies that already have private investors’ funding support and are well-capitalised.

“The MHI’s actions to de-franchise the entire lot of small and medium sector OEMs from the scheme – who were mostly profit making, has led to a syndrome where the greater flow of government funding is being used to prop up the bottom lines of companies that are making substantial losses,” the letter read.

“It is worth asking if public funds should be put to use to cross subsidise well-capitalised, investor-fed, loss-making companies. In fact, to the credit of CEOs of some such companies, they are on record saying their enterprises do not need FAME subsidies,” it added. 

This is not the first time when the SMEV has highlighted its dissatisfaction with the issues with the FAME-II scheme. 

Earlier this year, the industry body, in a letter to government think tank NITI Aayog, said FAME-II scheme had turned out to be an “elitist” program after more than a dozen non-premium EV OEMs, including Hero Electric, Okinawa Autotech, and Ampere, were penalised for claiming the financial benefits in violation of FAME-II rules.

Later, deep-pocketed, loss-making players such as Ola Electric and Ather Energy also came under the government’s scanner after they were found to be artificially keeping their vehicle prices lower to get the demand subsidy under FAME-II. However, this didn’t have much of an impact on their EV registrations as they continue to see a rise in vehicle sales.

Under the FAME-II scheme, launched in 2019, the Indian government aims to support the electrification of public and shared transportation through demand incentives for 7,090 ebuses, 5 Lakh electric three-wheelers, 55,000 electric four-wheeler passenger cars, and 10 Lakh electric two-wheelers with a total budgetary allocation of INR 10,000 Cr.

However, the issues with the FAME-II scheme, including the cut in subsidy amount, have severely impacted the target of the scheme, as per the SMEV.

In its letter, the SMEV said that an allocation of INR 2,000 Cr was aimed for disbursement for the electric two-wheeler sector. The target was to subsidise 1 Mn such EVs at a pre-determined value of INR 10,000 per EV at a multiple of its battery rating.

“You may know that the target was missed by almost 50% – for two reasons. The subsidy amount married to battery capacity, produced an adverse outcome: the higher output, more expensive, premium segment EVs took away the lion’s share of the budget – quite contrary to the policy intent of shifting the largest, mass mover market first to EVs,” the industry body noted. 

Besides, the subsidy per kWh was revised to INR 15,000, which skewed the average subsidy payout per EV to such an extent that the budget ran out at halfway of the deemed target, the SMEV claimed.

“Now, due to the MHI’s actions of blocking subsidies to OEMs who were accused of using imported parts beyond the mandated timeline, INR 1,200 Cr is still retained by the MHI since January 2022 in unpaid subsidies,” it added.

Meanwhile, after a severe disruption earlier this year, electric two-wheeler sales have started witnessing a rise once again, led by Ola Electric, TVS Motor, and Ather Energy. A total of 5.97 Lakh two-wheeler EVs have been registered so far this year, as per Vahan data.

The post FAME-II Subsidy Being Used To Prop Up Bottom Lines Of Loss-Making EV Makers: SMEV appeared first on Inc42 Media.

Bengaluru-based two-wheeler electric vehicle (EV) manufacturer Ather Energy’s net loss surged over 150% in the year ended March 31, 2023. The Hero MotoCorp-backed EV startup reported a loss of INR 864.5 Cr in the financial year 2022-23 (FY23) as against a loss of INR 344.1 Cr in FY22, despite a strong growth in its sales. 

Operating revenue ballooned 4.3X to INR 1,783.6 Cr in FY23 from INR 408.5 Cr in the previous fiscal year. Ather Energy’s operating revenue stood at INR 80 Cr in FY21. 

The startup generates a majority of its revenue from the sale of its escooters. Including other income, total revenue stood at INR 1,806.1 Cr during the year under review as against INR 408.5 Cr in the previous fiscal year. 

Meanwhile, total expenses more than tripled to INR 2,670.6 Cr from INR 757.9 Cr in FY22. 

Ather’s biggest expense was the cost of materials. It spent INR 1,655.7 Cr on materials in FY23, a 4.5X jump from INR 365.1 Cr in the previous fiscal year.

Employee benefit expenses rose 2.9X to INR 334.9 Cr from INR 113.9 Cr in FY22. Employee benefit expenses comprise employee salaries, PF contribution, gratuity, among others. 

Advertisement expenses more than quadrupled to INR 203.8 Cr in FY23 from INR 45.5 Cr in the previous fiscal year. 

On a unit economics basis, Ather spent INR 1.5 to earn every INR 1 from operations. EBITDA margin improved to -38.3% in FY23 from -61.7% in FY22. 

Earlier this month, Ather raised INR 900 Cr from its existing shareholders Hero MotoCorp and GIC through a rights issue. 

Founded in 2013 by Tarun Mehta and Swapnil Jain, Ather is a major player in the Indian two-wheeler EV market. It currently offers two escooters – Ather 450X and Ather 450S.

Ather also claims to have the largest fast-charging network in the country. The startup currently has over 116 experience centres across 92 cities. 

The startup competes with the likes of Ola Electric, Simple Energy, and TVS.

The post Hero MotoCorp Backed Ather Energy’s Loss Shoots Up 2.5X To INR 865 Cr In FY23 appeared first on Inc42 Media.

Zerodha cofounder Nikhil Kamath is set to join the captable of the electric two-wheeler manufacturer Ather Energy.

While specific details are yet to be disclosed, an ET report indicates that Kamath will invest via a secondary share sale. 

The reports emerged just a few days after the Zerodha cofounder invested INR 100 Cr (around $12 Mn) in the listed online gaming startup Nazara Technologies.

Kamath also holds a stake in Licious and Third Wave Coffee Roasters, along with recent investments such as The Mainstreet Marketplace, Metaman, NAS Academy and Growth School.

Just two weeks back, Ather secured INR 900 Cr (around $108 Mn), in a rights issue from Hero MotoCorp and Singapore’s GIC. Hero MotoCorp, which already holds a 33.1% stake in Ather Energy, would invest up to INR 550 Cr in the EV startup’s rights issue. 

Initially, it was looking to raise $250 Mn at a $1.3 Bn valuation, however, shelved the plans amid prevailing market conditions, The Arc reported. The EV startup was valued at around $750 Mn during its previous round. 

Ather has two core products – the Ather 450X and the Ather 450S. The startup has been looking to expand its product portfolio and was looking to finance the same via the $250 Mn funding round.

Ather’s revenue stood at INR 1,806 Cr in FY23, a massive jump from INR 408.5 Cr in FY22.

For some context, Ola Electric, India’s largest electric two-wheeler seller, accounted for almost a third of all the electric scooters sold in India in August, according to government statistics available on the VAHAN portal. The startup also recently launched a new generation of electric scooters and announced four electric bikes, taking its total current and planned products to nine.

Ather Energy is also facing a hit to sales since the rollback of the government’s Faster Adoption of Manufacturing of Electric Vehicles (FAME-II) subsidies this June. In that month, Ather sold 15,420 units, a number which fell to 6,835 units in August.

The post Zerodha’s Nikhil Kamath Set To Join Ather’s Captable Via A Secondary Sale appeared first on Inc42 Media.

Several electric vehicle (EV) startups, including Ather Energy, Altigreen Propulsion Labs, Ultraviolette Automotive, and Simple Energy, have registered and received certificates for recycling battery waste, as per the information available on the Central Pollution Control Board’s (CPCB’s) portal for battery waste management.

The development follows the Centre notifying Battery Waste Management (BWM) Rules, 2022 in August last year.

Besides the EV startups, automotive majors, including Mahindra & Mahindra, Tata Motors, and MG Motor India, have also received certificates, as per the EPR (Extended Producer Responsibility) portal for battery waste management. 

The companies have been granted a five-year certificate to facilitate proper management of lithium-ion battery waste.

It is pertinent to note that the BWM Rules, under the concept of EPR, mandate producers of waste batteries, including battery importers, to collect and recycle them. All these stakeholders are responsible for ensuring the use of recovered materials from battery waste in new batteries.

Under the new rules, battery waste producers are mandated to either recycle the waste batteries themselves or send them to battery recyclers registered with relevant state pollution control boards. 

The new rules replaced Batteries (Management and Handling) Rules, 2001. 

As per the CPCB’s portal for battery waste management, a total of 1,225 battery waste producers have been granted certificates over the past few months, while the total number of received applications stands at 1,766.

On the other hand, the total number of battery recycler applications stands at 17. However, none of them have received certificates so far. These recyclers include Batx Energies, Eco Energy Regeneration, and Sungeel India Recycling.

Some of the major lithium-ion battery recycling startups, including Attero, Lohum, Ace Green Recycling, and Metastable Materials, do not figure in the list of companies which have applied for registration.

However, as per a report by The Indian Express, the registration of recyclers on CPCB’s portal for battery waste management is still in the testing phase. The board is reportedly collating stakeholder feedback on portal-related processes.

As per the report, the portal is expected to become fully operational in the coming weeks.

With the rise in the number of EVs and electronic gadgets like mobile phones, it has become imperative to focus on recycling lithium-ion batteries. This will not only benefit the environment but also support India’s homegrown lithium-ion cell manufacturing industry and bring down the cost of EVs going forward.

Speaking to Inc42 earlier, several industry experts said that though BWM Rules were a step in the right direction, there was a need for clearer regulations and processes to ensure that the norms were followed.

The post EV Startups Ather Energy, Altigreen, Ultraviolette Register For Recycling Waste Batteries appeared first on Inc42 Media.

Driven by an increase in awareness towards cutting down carbon emissions, innovation and availability of multiple options, India has witnessed a sharp 700% jump in the number of electric vehicle (EV) registrations since 2020, suggests Vahan data.

In 2020, when India had just about started welcoming and accepting EVs, the sale of such vehicles stood at 1.25 Lakh units. Erickshaw was the most popular category among EVs.

However, this number jumped to 10.25 Lakh units in 2022, as more companies and startups came out with their EV products and customers started adopting the technology. In just over eight months of 2023, the number of EV registrations currently stand at 10 Lakh units.

Despite significant challenges, including fire and other safety incidents related to EVs in India, controversies around the usage of low-quality Chinese batteries, policy revamps, weak charging infrastructure, and the general reluctance of buyers to adopt EVs, the its sales of EVs have grown by 2X-3X year-on-year (YoY) in India since 2020.

EV sales currently account for a little over 6% of the total vehicle registrations in the country this year across petrol, diesel, CNG and other fuels. While the EV share is still significantly low in the automotive market, this is an increase from a mere 0.7% market share in the year 2020.

Besides, we must note that there has also been a major trend shift in the EV market after 2020. From 2021, sales of electric two-wheelers started taking the dominant position in the EV market as compared to erickshaws earlier. 

Meanwhile, there has also been a sudden uptick in the sale of commercial electric three-wheelers and autos. So far in 2023, electric three-wheelers have seen total vehicle registrations of around 3.7 Lakh units while the number stands at 5.6 Lakh units for two-wheelers. 

As per the government’s latest data, the total number of EVs in India till August 3 this year stood at 28.3 Lakh units across the country, excluding Telangana and Lakshadweep. 

It is pertinent to note that in March this year, Minister of State (MoS) for Heavy Industries Krishan Pal Gurjar said India was home to 21.7 Lakh registered EVs. Despite a few dips in the months of April and June, the month-on-month (MoM) increase in EV sales has also been momentous this year. 

Tackling The Challenges Head On 

During the summer of last year, a number of EV fire incidents grabbed the headlines one after the other. Ola Electric, Okinawa Autotech, Pure EV, and some other less-selling escooter companies got caught in controversies following those incidents.

As the number of fire incidents started increasing, some of them even claiming lives, several manufacturers came under the probe initiated by the Indian government to find out the reason behind the fires.

The probe found that EV batteries and battery management system (BMS) lacked certain basic safety features or were of inferior quality. 

Soon after, the government tightened the battery testing norms, with the Ministry of Road Transport and Highways mandating the amended AIS 156 and AIS 038 Rev.2 standards for different EV categories. 

While the battery safety standards started receiving increased attention, the Ministry of Heavy Industries (MHI) started taking a close look at domestic value addition by EV original equipment manufacturers (OEMs) in the second half of last year.

It also came to the fore that EV OEMs, particularly in the two-wheeler space, were using a substantial amount of Chinese components in their vehicles.

A dozen electric two-wheeler manufacturers, including Hero Electric, Okinawa Autotech, Revolt, and Ampere, among others, came under the government’s scanner for allegedly claiming FAME-II subsidies without adhering to the minimum localisation norms.

Amid this, the government held back the release of some FAME-II subsidies. This resulted in EV sales taking a hit. Given that two-wheelers currently drive the EV market, total EV sales also slumped for a few months. For instance, the total number of EV registrations in November 2022 was at a record high of 1.22 Lakh units. In January this year, it fell to 1.03 Lakh units.

While sales just about began seeing an uptick after that, the government took a number of other measures for violation of FAME-II norms which again hit two-wheeler sales.

The MHI put an embargo on some of the manufacturers from listing their sales on the official National Automotive Board (NAB) portal and began penalising the OEMs. The central government issued notices to return the subsidy amounts that the government has passed on to the OEMs found guilty of violating norms.

On the other hand, Ola Electric, Ather Energy, TVS Motor, and Hero Motocorp came under a fresh probe for allegedly selling their chargers and proprietary software separately at an added price to keep the vehicle prices under the INR 1.5 Lakh cap to avail the FAME-II scheme.

Amid all this, total EV registrations again dipped to 1.02 Lakh units in June after a record 1.58 Lakh registrations in May. 

Two-wheeler vehicle registrations dipped to almost a 12-month low of 46,034 units in June, hurt by the government’s decision to cut subsidy benefits under FAME-II and the OEMs’ decision to raise vehicle prices.

After finding many two-wheeler OEMs flouting FAME-II norms, the Centre cut the incentives to 15% of the ex-factory price of electric two-wheelers from 40% earlier. It also cut the demand incentive to INR 10,000/kWh from INR 15,000/kWh.

Under the FAME-II scheme, the government aimed to support the electrification of public and shared transportation through demand incentives for 7,090 ebuses, 5 Lakh electric three-wheelers, 55,000 electric four-wheeler passenger cars, and 10 Lakh electric two-wheelers.

As per the government’s latest data, a total of 8.47 Lakh electric vehicles have been sold by EV manufacturers to consumers under the FAME-II scheme, as on July 28, 2023. Of this, 7.53 Lakh units were two-wheelers.

In the Economic Survey 2022-23, the government projected the domestic EV market to grow at a compound annual growth rate (CAGR) of 49% between 2022 and 2030 to hit 1 Cr units in annual sales by 2030. 

While policy revamps to tighten the loopholes have created some major lag in EV sales, improvement in charging infra, battery and vehicle technology, and easier access to finance will play a crucial role in driving up EV sales in the country going ahead.

The post Despite Hurdles, EV Registrations In India Up 700% Since 2020 appeared first on Inc42 Media.

In recent years, India has emerged as a trailblazer in the sustainable transportation revolution, focusing strongly on electric vehicles (EVs). The Government’s proactive measures have significantly boosted the EV sector, leading to increased sales and a thriving startup ecosystem. 

By 2030, the EV two wheeler market is expected to reach 22 Mn units, representing 80% of the overall market. According to Blume EV Primer 2.0 report, EV three wheeler’s new sales are projected to reach 85% penetration, and EV four wheeler sales are set to surpass 900K units by 2030. 

This growth potential has positioned the EV sector as an attractive market for investors seeking impact and substantial returns. This has resulted in significant investment in the EV sector, fuelling further innovation and growth and driving India towards greener transportation.

Identifying The Key To Empowering Mass EV Adoption

The Indian EV space is the third largest in terms of the number of companies (next to the US and China) and fourth highest in funding (after the US, China, and Sweden). EV startups in India have raised a cumulative total of $2.5+ Bn and saw a 117% year on year growth in 2022. However, India’s vast geography demands further innovative solutions to address challenges like charging time and range anxiety to propel mass EV adoption.

In this context, battery swapping has emerged as a promising solution for short-distance vehicles like two-wheelers and three-wheelers. It is particularly beneficial for last-mile delivery companies as they could reduce downtime by instantly swapping batteries. Moreover, innovations like battery swapping make EVs more practical yet eco-friendly in the private vehicle segment.

In the B2B segment, fleet operators can pass the benefits of Government incentives and subsidies down the value chain, thereby making EV adoption more accessible and financially viable for ride-hailing companies and end customers. 

Additionally, a few players are developing a connected ecosystem to offer a robust e-mobility infrastructure capability in the B2G, B2C and B2B domains to accelerate mass adoption of EV transportation. 

Accelerating Progress Through Government Initiatives

Favourable government support and policies and ample funding are imperative to ensure mass EV adoption and further expand the EV ecosystem. 

Supportive policies are essential to establish clear battery-swapping regulations and boost consumer and investor confidence.  

Expanding subsidies like the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme can make EVs accessible to a broader population. Also, incentives for domestic battery manufacturers, like Product Linked Incentive (PLI) scheme, may reduce import dependency. 

Moreover, skill development programs and reduced regulatory burdens for EV-specific financing companies can strengthen the ecosystem.

Government’s FAME Scheme: A Hidden Doorway To Venture Debt 

To encourage EV adoption, the Government introduced the FAME scheme in 2015, providing subsidies to manufacturers and infrastructure providers. However, in the second phase of FAME, which has been extended till March 2024, subsidies have been paid with a 100-day lag, creating a working capital challenge for companies.

However, for companies delving into the EV ecosystem and in the growth phase with a requirement for additional capital, Venture Debt (VD) could emerge as one of the prominent solutions, bridging the financial gap during this transitional period and propelling growth in the green mobility sector. 

Such amalgamation of innovation, government support, and VD can accelerate India’s green mobility revolution, with notable startups like Battery Smart and Sun Mobility leading the way.

From Top To Bottom: Synergy Between The Stakeholders

Building and nurturing a sustainable transportation ecosystem through EVs require a synergy between the government, fund lenders (particularly venture debt providers) and EV companies. 

While the government of India plans to enhance renewable energy production and lay down 10,000+ circuit kilometres of transmission lines to support the EV charging infrastructure, venture debt provides essential working capital to EV startups. 

With such financial and infrastructural boosts, EV companies are focusing on innovations fuelling efficient battery manufacturing and smart charging to prevent grid overload during peak periods. This synergy propels the entire EV ecosystem and its growth.

Collaborative Progress To Lead A Sustainable Future

EV companies in India are the powerhouse of innovations, benefiting various stakeholders. 

Battery swapping offers quick charging solutions, increasing delivery partners’ income potential and reducing logistics companies’ operating costs. 

For the Indian government, promoting sustainable development through EVs leads to fiscal benefits from EV sales. 

Additionally, the EV sector offers promising growth opportunities to investors with a green edge, empowering entrepreneurs and contributing to India’s economic growth. 

Collective efforts of the government, startups, venture debt providers, and investors create a greener, more sustainable, and prosperous future. India’s embrace of EVs sets a global example, demonstrating the connection between sustainable mobility, economic growth, and societal well-being.

The post Fuelling The Future: How Venture Debt Is Empowering Green Mobility In India appeared first on Inc42 Media.

Despite challenges, India’s electric vehicle (EV) industry has shown remarkable resilience and growth. Both domestic and foreign companies, in collaboration with the Indian government, have pledged substantial investments, totalling over INR 1 Lakh Cr, over the next 5-10 years. This commitment mirrors the confidence that stakeholders have in the potential of the Indian EV market.

Before delving deeper into understanding the factors driving the burgeoning Indian EV revolution, it’s essential to highlight that Union Minister for Road Transport and Highways, Nitin Gadkari, reported an astonishing 300% increase in EV sales in 2022. Furthermore, he anticipated that the Indian EV market would reach $266 Bn by 2030.

Additionally, India currently boasts around 3 Mn registered EVs (according to Vahan), with projections estimating sales of 10 Mn EVs by 2030, generating employment for 50 Mn individuals.

The EV boom is evident in the remarkable shift in sales trends. Between January and July 2023, EV sales skyrocketed 131%, surging from 25,100 units to 58,076 units. In contrast, internal combustion engine (ICE) vehicles recorded a mere 5% growth, bringing the total to 2.2 Mn units from 2.1 Mn units during the previous year.

India is home to over 700 EV startups, showcasing the industry’s dynamic nature. Concurrently, established ICE manufacturers have accelerated their transition to the electric vehicle segment. The industry is at a pivotal juncture, driven by urbanisation, environmental concerns, and government policies, leading to a surge in the adoption of electric two-wheelers and three-wheelers.

According to Sandiip Bhammer, the founder and co-managing partner of Green Frontier Capital, which has its investments in EV startups such as BluSmart Mobility, ElectricPe, Revfin, and Battery Smart Swap Stations, India is poised to excel in the electric two- and three-wheelers segments within five years, driven by indigenous technologies and robust local supply chains.

“India has the potential to lead the global EV ecosystem, spanning battery research and manufacturing, software solutions, and sustainable battery recycling. This transcends transportation – it’s about reshaping India’s energy paradigm, advancing sustainability, and setting global benchmarks, especially for developing economies mirroring India’s socio-economic structure,” Bhammer said.

On A Rapid Growth Trajectory

EVs encompass multiple market segments and offer diverse opportunities. These segments include original equipment manufacturers (OEMs), EV financiers, deeptech enablers, charging station providers, battery manufacturers, assemblers, BMS providers, and many more.

Each of these emerging markets presents fresh opportunities for startups and provides a competitive advantage for early entrants. Unlike other emerging markets like cryptocurrency and gaming, the growth of the EV industry is inevitable.

Amit Gupta, the cofounder and CEO of Yulu, credits the substantial traction within various segments of the EV industry to the rising environmental consciousness and supportive government policies. These segments encompass EV ownership, mobility as a service (MaaS), and battery as a service (BaaS), among others.

In its report, NITI Aayog estimates that the cumulative demand for 120 GWh of batteries during 2017-2020 would have incurred a cost of $24 Bn for imported packs if a domestic industry had not developed. In contrast, establishing a $6 Bn-$9 Bn pack assembly industry in India would significantly reduce costs, presenting a massive opportunity for Indian startups and companies to assemble batteries and manufacture cells.

Understanding the math, prominent companies like Ola, too, have made substantial commitments to battery manufacturing. Ola has plans to invest INR 7,614 Cr to build battery cells and four-wheeler EVs in Krishnagiri, Tamil Nadu, and an additional INR 4,106 Cr in constructing a 500K sq ft ‘Battery Innovation Centre’ in Bengaluru.

Similarly, Tata has signed a deal to establish a lithium-ion cell factory with an investment of about INR 13,000 Cr ($1.58 Bn). Ola aims to build a 100 GWh battery plant, while Tata targets a 20 GWh capacity.

Other major players, too, have committed significant investments, with Hyundai planning to invest $2.4 Bn over the next 10 years. Maruti Suzuki and Toyota are also allocating substantial investments of $1.3 Bn and 630 Mn, respectively, towards their EV lineups.

Besides, the government has also announced a couple of production-linked incentive (PLI) schemes to bridge these supply gaps. One of them, with an outlay of INR 25.9K Cr, is designed for the auto component sector. The other one, with an allocation of INR 18.1K Cr, is meant to bolster the advanced chemistry cell (ACC) battery industry at a pan-India level.

Reliance New Energy, Ola Electric and Rajesh Exports were earlier shortlisted under the PLI Scheme for ACC battery storage.

The effort will reduce the overall cost of manufacturing by significant margins. The plants under PLI schemes are expected to be operational by 2024-end, according to industry experts.

The development of charging infrastructure, aggregation of public charging stations, real-time vacancy information, and component manufacturing are also the key imperatives of an evolving EV ecosystem.

EV Players Are Collborating Not Competing

In pursuit of the ambitious 2030 goals, the Indian EV sector has seen significant partnerships and initiatives taking shape, and, along with fintechs, EV is another area where we have witnessed an increased collaboration between startups and giants.

Unsoo Kim, MD and CEO of Hyundai Motor India, had earlier emphasised the pivotal role of strategic partnerships in expediting EV adoption among customers, aligning with the national objective of achieving carbon neutrality.

This collaborative spirit holds the essence of India’s burgeoning EV landscape. Rather than intense competition, the industry is witnessing a surge in collaborations. For instance, Tata Power has joined forces with Hyundai Motors to develop fast-charging infrastructure. Mahindra & Mahindra is contemplating a partnership with Volkswagen for their modular electric drive matrix (MEB) platforms.

Earlier this year, Uber India inked an agreement with Tata Motors to supply 25,000 EV sedans by the next year. Uber has further expanded its partnership portfolio, collaborating with EV fleet partners Lithium Urban Technologies, Everest Fleet Pvt Ltd, and Moove to deploy 25,000 electric cars on the Uber platform in India over the next two years.

Uber has also forged a partnership with Zypp Electric to introduce 10,000 EV two-wheelers in Delhi by 2024. Uber has additionally announced a partnership with SIDBI to unlock INR 1,000 Cr in financing.

Meanwhile, Amazon India has set ambitious targets, aiming to transition 50% of its end-mile fleet to EVs by 2030. The company has already established partnerships, including one with TVS Motors to supply 100,000 iQubes during this period.

Neuron Energy, a battery assembly startup, is actively engaged with multiple brands in the two-wheeler battery segment and is exporting its products to various countries, including Africa, the Middle East, Sri Lanka, Bangladesh, and Nepal. Furthermore, the company has plans to expand its horizons by exporting solar batteries to Africa by 2024.

“Neuron Energy has also forged a partnership with an Italian manufacturer to export golf cart batteries to the US and Canada. With an extensive lineup of projects, the company aims to capture a larger market share and achieve substantial sales growth in the dynamic and rapidly expanding EV industry,” said Pratik Kamdar, the CEO and cofounder of Neuron Energy.

Building The Big EV Infrastructure

India currently boasts nearly 8,000 public charging stations, a notable achievement considering the country has sold around 3 Mn EVs thus far.

According to the International Energy Agency (IEA), India is one of the top five countries in the world in terms of EV/EVSE (Electric Vehicle Supply Chain). Clearly, there’s a big gap to fill in.

Among key players in this charging infrastructure landscape, Tata Power has taken the lead by installing over 4,000 EV public and semi-public charging stations across 250 cities. Similarly, Ather has made strides with over 1,400 charging stations operational in 99 cities. Notably, battery charging startup Bolt has surged ahead by installing more than 30,000 charging points.

The Indian government, with its eyes set on the future, has an ambitious plan to establish 46,000 public charging stations nationwide. It is also providing incentives to stimulate the development of these charging stations under the FAME II initiative.

Parallely, India has also ventured into the concept of battery swapping. The Telangana government has piloted 50 battery-swapping stations, while Delhi Transco Limited (DTL) has installed over 250 battery-swapping stations in Delhi. Further, Sun Mobility, in collaboration with Amazon India, has laid out plans to deploy over 2,000 battery-swapping points by 2025.

Notably, Maharashtra has embarked on a substantial $2.5 Bn partnership with Taiwan’s Gogoro and a local automotive systems supplier to establish electric vehicle (EV) battery-swapping and charging stations.

Seeing a significant opportunity in ‘energy as a service’, Yulu created Yuma Energy in a joint venture with Magna International.

Yuma Energy is currently doing close to 500,000 swaps a month and expects a 50% QoQ growth for the next couple of years. The business currently has a network capacity of a million battery swaps a month and will double this capacity in the next 3-6 months. “In the next five years we are confident that we will be able to expand to the top 25-30 cities in the country with a capacity of over 50 million swaps per month, while maintaining strong unit economics,” said Gupta.

Amit Gupta of Yulu believes that India’s increasing adoption of EVs owes much to the government’s timely measures aimed at incentivising indigenous EV and battery manufacturing through various PLI schemes. However, Gupta also emphasised the need for dedicated policies to promote Mobility-as-a-Service (MaaS) solutions such as shared electric two-wheelers and Battery-as-a-Service (BaaS), which are essential for the holistic growth of the Indian EV industry.

Meeting The Big Finance Gap

In the first seven months of 2023, India notched up impressive cumulative sales of 8,38,766 electric vehicle (EV) units, underscoring the strength of the market.

Nevertheless, challenges persist, primarily revolving around the perception of higher upfront costs associated with EVs. To tackle this issue, lenders have begun introducing innovative financing models aimed at making EVs more accessible to the Indian consumer.

Sameer Aggarwal, the CEO and founder of Revfin, emphasises the need to educate consumers about the long-term cost savings and environmental benefits associated with EVs. Given that EVs tend to be pricier than their internal combustion engine (ICE) counterparts, financing has played a pivotal role in popularising them among consumers.

Several startups, including Revfin, AMU Leasing, and Ecofy, have ventured into the EV financing space to meet the growing demand from consumers.

However, several key hurdles remain when it comes to leveraging EV financing to bolster India’s EV ambitions.

Moving on, Nehal Gupta, the director of AMU Leasing and EMFAI, acknowledges the higher upfront cost of EVs stemming from advanced battery technology being a prominent concern. Addressing this necessitates innovative financing models to enhance EV accessibility.

Moreover, addressing concerns related to the total cost of ownership, including potential battery replacements, is crucial to instil confidence in both consumers and lenders. As the EV market matures and technology becomes more cost-effective, these challenges are expected to gradually diminish.

Another pertinent issue is extending loans for used EVs. Sumeru Shah, business head-EV of Ecofy highlights the difficulty in determining the residual value of these vehicles, as very few have run a full cycle of the entire battery warranty period or the battery life.

“Unlike ICE vehicles, which have a well-established secondary market influenced by supply and demand dynamics, EVs currently rely on estimations based on algorithms for battery life. OEM assurances play a significant role in determining the residual value, which differs from the ICE vehicle market’s pricing structure for second-hand vehicles,” added Shah.

The EV financing gap will go away as the industry as well as the battery technology gets more mature, believe experts.

ICE Majors VS EV Startups: The Battle Ahead

With a few exceptions like Tata Motors and Mahindra, the electric vehicle (EV) sector in India has largely been led by startups such as Ola Electric, Ather Energy, Bolt, and Yulu, just to name a few.

However, in recent years, major players like Hero MotorCorp, TVS, Bajaj, Tata Motors, Suzuki, Mahindra and Mahindra, Hyundai Motors, MG Motors, and others have announced ambitious plans for the Indian EV market.

It’s also important to note that Ola Electric is backed by Tata and Hyundai, while Hero has more than 35% stake in Ather Energy. This raises concerns about whether a large section of EV startups are adequately equipped to compete with these industry giants.

Sushant Kumar, the founder and MD of AMO Mobility, an electric scooter and bike manufacturer based in Noida, affirms that the entry of established internal combustion engine (ICE) players into the EV market will indeed intensify competition for EV startups. Established brands are likely to draw more attention, potentially reducing the market share of EV startups. Consequently, this may raise entry barriers for new players.

However, Kumar believes that this increased competition can stimulate innovation in the sector, ultimately leading to more affordable EV prices. This innovation will benefit both EV manufacturers, especially startups, and consumers.

According to Bhammer, ICE manufacturers entering the EV space present both challenges and opportunities. Their presence underscores the potential of EVs, leveraging their brand equity and established supply chains. However, these established players also carry legacy constraints. In contrast, EV startups are known for their agility and innovation but face challenges related to scaling up operations and ensuring quality.

From an investor’s perspective, this healthy mix of competition is likely to drive innovation, enhance consumer choices, and open avenues for potential collaboration between startups and established players, fostering growth in the EV industry, Bhammer pointed out.

Miles To Go?

Multiple industry stakeholders and experts agree that the government has made commendable progress in the electric vehicle (EV) sector.

Kamdar of Neuron Energy says, “The Centre has played a pivotal role in fostering the growth of the EV industry by giving tax benefits, subsidies, and investing in infrastructure. The development of a strong manufacturing infrastructure, including battery production facilities, assembly plants, and supply chain networks, is essential. Investments in infrastructure by both domestic and foreign companies are likely to determine India’s competitiveness in EV manufacturing at a global level.”

However, is this enough?

While companies like Tata, Mahindra, Hyundai, MG Motors, Ola Electric, Uber and other stakeholders have set a higher bar for themselves, this is not going to help achieve the 2030 target, experts believe.

The gap between the projected sales of two-wheeler EVs and actual sales has been increasing, and the Society Of Manufacturers Of Electric Vehicles (SMEV) estimates that the gap will only widen if the government keeps reducing incentives.

In a bid to achieve its EV ambitions, Bhammer recommends several accelerators that India can employ. These encompass the expansion of charging infrastructure in both urban and rural areas.

Additionally, there needs to be consistent government backing through subsidies, tax incentives, and incentives for both manufacturers and consumers. Public awareness campaigns highlighting the economic and environmental advantages of electric vehicles (EVs) can also stimulate adoption.

Furthermore, promoting research in battery technology to enhance the efficiency, affordability, and adaptability of EVs to India’s unique conditions is crucial. Lastly, there should be a strong emphasis on education and training programmes aimed at cultivating a skilled workforce proficient in EV technology.

This is important as, despite the higher initial cost, the total cost of ownership (TCO) of a 4-wheeler EV is much cheaper than that of ICE counterpart. According to a NASSCOM report, for a period of 10 years, TCO is INR 3.78 per Km cheaper for an EV than that of an ICE counterpart. For 3W, ICE is 60% costlier for the same period.

Another significant effort is to reward carbon credits where they are due. Carbon credits can be offered to EV manufacturers, users, charging station providers, and others. This could offset costs by an estimated 5% to 15%, depending on their utilisation.

While a lot is happening behind the scenes, India seems to be well abreast of its EV goals. Although there are a few hiccups, the tailwinds driving the Indian EV space are too strong a factor contributing to its growth.

[Edited by Shishir Parasher]

Update: September 18, 2023 | 7PM

The Bolt.Earth logo in one of the images has been updated.

The post Inside India’s Electric Ambitions: Decoding The Forces Fuelling The EV Revolution appeared first on Inc42 Media.

With the increasing adoption of electric vehicles (EVs) in India, the financial landscape supporting this emerging technology has evolved significantly in recent years. Banks, non-banking financial companies (NBFCs), and fintech startups are now collaborating to provide various financing options, reducing the initial costs associated with purchasing EVs.

Notably, there has been a surge in collaborations between EV original equipment manufacturers (OEMs) and lenders to improve access to loans for EV buyers. For instance, Ather Energy, a prominent electric scooter manufacturer, has recently partnered with Bajaj Finance, IDFC First, and Hero FinCorp to offer 60-month electric two-wheeler loans to EV buyers.

Similarly, Ola Electric has entered into partnerships with Shriram Finance and other financial institutions to facilitate vehicle sales through accessible loan options.

In the commercial vehicle sector, Omega Seiki Mobility has joined forces with Punjab National Bank to assist its dealer partners in providing enhanced retail financing solutions to customers.

Despite these positive developments within the vehicle industry, the EV financing market still faces several fundamental challenges, according to the industry experts that Inc42 spoke with.

Notably, these challenges range from high-interest rates to a general lack of understanding about EVs and apprehensions about their battery life.

On World EV Day, we aim to explore the reasons behind the reluctance of traditional NBFCs and banks to offer EV financing options. Additionally, we will discuss how these issues could be addressed to accelerate India’s EV ambition.

Before delving into the complexities of these challenges and the opportunities they present, let’s take a brief look at the landscape EV financing in India.

We must note that these players are some of the pioneers in the EV financing market, which, as per last year’s NITI Aayog report, is expected to grow to over INR 45k Cr-INR 55K Cr by 2026.

EV Financing In A Complex Landscape

The loan market for internal combustion engine (ICE) vehicles has evolved over several decades, while the EV industry is relatively new. This makes it complex for both loan providers and consumers to determine the resale value and lifespan of an EV.

Another significant challenge is the absence of a robust second-hand market for EVs, making the resale value more uncertain compared to ICE vehicles. This uncertainty often renders traditional term loans less suitable for EVs, prompting financiers to avoid such risks.

Moreover, due to the perceived higher risks associated with EVs, interest rates for EV loans are generally higher than those for ICE vehicles, particularly in the non-premium categories. Hence, this discrepancy is particularly noticeable in the case of electric three-wheelers and low-speed two-wheelers.

According to the NITI Aayog report from the previous year, depending on the vehicle segment, the down payment for EV loans can be up to 20% higher, and EMIs can reach 1.5-1.8X that of ICE vehicles. This applies to short-term loans too.

Additionally, the cost of batteries constitutes a significant portion (40%-50%) of the total EV cost, yet they have a shorter lifespan. Consequently, it becomes essential to offer tailored financing solutions for different types of EVs.

Has The Industry Matured Enough?

Speaking with Inc42, Sandeep Divakaran, ED and CEO of Greaves Finance, highlighted the unique nature of EV financing compared to traditional vehicle financing. He emphasised that understanding the lifespan of Li-ion batteries in various vehicles, taking into account factors like ride conditions, usage patterns, and ambient temperatures, is crucial in assessing the overall longevity of EVs.

To address this, Greaves Finance has adopted an asset lifecycle management approach. This method allows the NBFC to gain a comprehensive understanding of battery performance over time, enabling the provision of customised solutions to customers, rather than relying on traditional loans.

Not only this, the approach also enables the company to predict the resale value of EVs to encourage greater adoption of these vehicles.

Similarly, Bengaluru-based EV financing startup Vidyut Tech has taken a distinct approach by separating the financing for batteries and vehicle chassis. This separation allows Vidyut to offer tailored financing solutions, specifically designed for commercial L5 vehicle buyers.

Xitij Kothi, the cofounder of Vidyut, opined that in the EV context, the upfront cost of the vehicle is higher due to the battery, and assessing the vehicle’s residual value is complex, given battery lifespans vary based on usage and other factors.

To address this issue, Vidyut provides batteries on lease to customers.

However, this is not followed by most EV financers, particularly traditional banks and non-EV focussed NBFCs, which makes their financing products less suitable for commercial three-wheeler buyers. 

While banks like SBI, Axis Bank, and HDFC Bank provide EV loans at lower interest rates compared to ICE vehicles, they are often for four-wheelers and premium category two-wheelers. 

Pankaj Gupta, the CEO of Mufin Green Finance, opined that customers of EV players like Ola Electric, Ather Energy, or TVS Motor, who largely have good CIBIL scores, do not face many challenges in getting loans from banks. However, these banks hardly provide loans to the buyers of e-rikshaws, e-autos, or electric three-wheeler cargos, as a majority of these users are largely new to credit and bring more risk to the table.

“This is where NBFCs and other financing startups are trying to find their niche today,” Gupta added.

Here, it is pertinent to note that the borrowing cost of NBFCs is high. There is an augmented asset and credit risk associated with financing these EVs, leading to users paying a higher interest rate while repaying loans.

As per last year’s NITI Aayog, NBFCs charge 1%-7% higher interest rates for passenger EVs compared to ICE vehicles and 1%-8% higher rates for cargo EVs compared to commercial ICE cargo vehicles. Furthermore, the loan tenure for EVs is generally shorter, ranging from 24-42 months compared to 24-60 months for ICE vehicles. 

Banks offering loans for electric two-wheelers in both low- and high-speed segments charge 1%-4% higher interest rates compared to ICE vehicles, while NBFCs impose 1.5%-3% higher interest rates than ICE vehicles.

This disparity becomes more glaring when three-wheelers and commuter two-wheelers are leading the charge in EV penetration in India. Of the 9.9 Lakh EVs sold in India so far in 2023, 57% were electric two-wheelers, while three-wheelers comprised 37%, as per Vahan data.

However, according to experts, the existing disparity in the EV financing ecosystem, pertaining to repayment terms, can be solved to a great extent if the government brings the EV industry under the ambit of priority sector lending, which is a long-pending demand for EV players. Besides, this will also increase the scope for lenders to spread across the EV ecosystem.

How Priority Sector Lending Status Could Speed Up EV Adoption

Mufin Green Finance’s Gupta believes that bringing EVs under priority sector lending will give a big boost to EV adoption in the country as capital will increase. He added that many investors will then be willing to expose their capital to risky products like EVs.

Echoing similar sentiments, Kothi said that once EVs come under priority sector lending, major lenders will look forward to deploying their capital in the segment. 

“Bank will deploy capital either via their existing NBFC partnerships or they will partner with EV financing startups, which will definitely increase the supply of capital and liquidity in the market. However, this might not have a direct impact on bringing down the interest rates.” Kothi said.

We must note that in January 2022, NITI Aayog and Rocky Mountain Institute (RMI) and RMI India released a report outlining the importance of priority-sector recognition for retail lending in the electric mobility ecosystem. 

The former CEO of the government think tank, Amitabh Kant had said that financial institutions have an important role to play in accelerating the adoption of EVs in India.

“RBI’s PSL (priority sector lending) mandate has a proven track record of improving the supply of formal credit towards areas of national priority. It can provide a strong regulatory incentive for banks and NBFCs to scale their financing to EVs,” the former CEO of Think Tank had said then.

Meanwhile, Greaves Finance’s Divakaran says that once the priority sector lending norms come into the picture, it will not only increase the capital but also bring down the cost for end consumers.

While this was one of the major demands of the industry in the Union Budget of 2023 as well, no such announcements were made by the Finance Ministry.

Nevertheless, some updates are expected on this front in a few months.

Moving on, a few other policies and regulations also need changes to address the fundamental challenges in EV financing, and the disparity in GST rates is one of them.

While Li-ion batteries, separate from vehicles, attract an 18% GST, vehicles, along with batteries, are taxed at 5%. But if the industry has to emphasise looking at options to finance batteries separately from vehicles, bringing the battery GST rate on par with the vehicle would go a long way in giving a boost to EV adoption.

What’s At The Core Of EV Financing Opportunities

As per NITI Aayog’s data, the two-wheeler EV market size is going to be as large as INR 35K Cr-INR 40K Cr by FY26, leading to a financing market size of INR 13K Cr-INR 15K Cr.

While the challenges are many, we must note that there has been an exponential increase in the number of financing options available for EVs in the last 2-3 years. An increase in the number of financing startups and NBFCs as well as certain government policies, have made this possible.

In the case of electric four-wheelers, green loans offered by the likes of SBI and Union Bank allow a 20-25 basis points (bps) discount, along with a higher tenure of up to 10 years.

Besides, under Section 80EEB of the IT Act, electric car buyers can claim tax savings of up to INR 1.5 Lakh on interest paid towards the EV loan.

Earlier this year, the Small Industries Development Bank of India (SIDBI) launched a financial scheme to fund the purchase of 50K EVs in the country.

Though the government has rolled out various other policies to push the adoption of EV two- and three-wheelers, these segments are yet to receive major support from state governments. 

According to Sushant Kumar, founder and MD of AMO Mobility, the low-speed electric two-wheeler segment is in dire need of financing. 

“With proper and timely access to financing solutions, we can make two-wheelers more affordable and boost the overall EV segment’s growth,” he said.

The post Driving Change: How EV Financing Is Supercharging India’s EV Goals appeared first on Inc42 Media.