Electric Vehicles in India: A Forward Looking View

#News(General) [ via IoTForIndiaGroup ]

[ Stellaris Venture Blog ]

We discussed in our last article why it is hard to stop the EV tsunami and despite that why India has little to show at present.

Short Term

In the short-term, we expect mass market adoption to be led by two-wheelers and three-wheelers, specifically for commercial applications, where the TCO economics work out favourably for EVs. We compared TCOs for an ICE scooter (such as an Activa), a 100 cc bike, and a hypothetical e-scooter, for consumer and commercial use cases. The results for the commercial use case are shown in the table below.

For consumer use cases, an e-scooter’s TCO is ~40% higher than an ICE scooter, and close to 2X for an entry level 100 cc bike. Also, consumer use case will require 3rd party swapping or charging networks, which may take time to evolve given the ‘chicken-and-egg’ nature of the problem there. Finally, a consumer business also involves significant brand-building and distribution, and hence we do not see it taking off before the commercial business in the short run.

The conclusions of an analysis for 3W comparisons are also similar, but it is better to look at results on the ground in this case. India has 1.5M+ e-ricks on the road today, more than the total number of electric passenger cars sold in China since 2011. In addition to the economics, the vehicle’s form factor – which allowed for initial traction through lead-acid batteries which are well understood in India – also supported rapid take-off. Other structural factors for take-off have been the lack of registration requirements for this category, the easy availability of cheap Chinese imports, and the presence of ~2000 assemblers all across the country.

A short note on mobility, which we had alluded to earlier in our post. We have already seen that the economics of a scooter-sharing business – where the fixed cost of a driver is no longer borne by the service provider – are fundamentally different to other modes of urban transport. EVs will make the economics even more compelling, and help accelerate the shift towards shared mobility in urban areas.

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