A Space to Watch Out for: EV’s Impact Rests on the Way it is Marketed!

The EV segment is poised to follow a high growth curve in the India market. A positive investment outlook and aggressive marketing strategies are expected to shape the Indian EV growth story over the next three years.

Some Highlights:

1. “Projections by the India Energy Storage Alliance (IESA) estimate that the Indian EV market will grow at a CAGR of 36% till 2026.” 

2. “The government should facilitate easy term financing for EV manufacturers and carry out awareness campaigns for popularizing the use of EVs among the general masses.” 

3. “Various stakeholders in the clean energy value chain do not have clear roadmap yet to market EV cars aggressively.” 

Going electric has not been new for Lords Automative. Headquartered in Mumbai, Lords have been in the business of developing eco-friendly, sustainable, and renewable energy products for different market sectors for over two decades. Lord’s Mark Industries has worked closely with Government of India on many projects. Its Founder, Mr Sachidanand Upadhayay, was instrumental in promoting recycled paper to all government departments. He was also involved with the Government of India for the promotion of the Balbharti concept and suggested the free distribution of textbooks to underprivileged students as a means to promote Right to Education.

Their foray into the EV space happened through their new venture of Lord’s Automative. We spoke with Sachidanand Upadhyay to understand how the market is expected to grow and what the key enablers for this space are.

Q. The transportation sector in India, at present, uses 96% of fuel which is non-renewable. Reducing greenhouse gas emissions of the transport sector will be challenging due to the continuing growth in passenger and freight activity. Given this, how do you see the transition to renewable energy happening by 2050?

A firm push from the government is required for promoting clean transportation technologies and accelerating the adoption of e-mobility solutions. These hold the key to decarbonizing India’s transport sector in a sustained manner. It has been estimated that railway transport is the most fuel-efficient mode of transport and as compared to fossil-fuel driven vehicles has the lowest emissions per kilometre transported. Loading of trucks on freight trains for long-distance freight haulage can make significant cost difference, and it will also make positive contribution to the environment.

The government must also pass a resolution mandating commercial heavy vehicles – plying inter-city and inter-state – to go emission-free. Following this, the government can promote the use of e-loaders and e-garbage vehicles on a mass scale to create a sustainable transport ecosystem within city limits. This can lead to a considerable lowering of greenhouse gas emissions.

Phasing out fossil-fuel vehicles in a planned manner and mainstreaming the use of e-vehicles in the country’s private and public transport systems can lead to a seamless transition to renewable energy by 2050.

Q. Where and how will Lords Automotive market its latest electric vintage car that the company plans to launch by January 2022?

We are planning to market our electric vintage car initially only across major tourist destinations in India. We are in talks with the Ministry of Tourism, Government of India to promote this EV vintage car. The look and feel of these cars can be enjoyed by car enthusiasts and tourists by paying a minimum fee.

We are also looking at promoting our unique vehicle by collaborating with tourist resorts and iconic vintage hotels. Through our strong dealer network and a well-prepared and well-organized marketing team we are in talks with clients, with whom we plan to tie up. We will launch our promotional activities for the EV vintage car soon.

Q. What has been the response to your electric scooters under the brand Zoom?

We have received a remarkable response for our electric scooter marketed under the brand Zoom. This has helped consolidate our position as one of the most popular e-scooter brands in India. Within a short span of 7 months, we have sold more than 5000 scooters through our 300-strong Pan-India dealership network.

Q. There are many challenges that block the Indian EV segment’s free-flowing growth, such as perceived high costs,   infrastructural inadequacies and charging-related inconvenience. Do you agree that because of these the Indian EV industry has been on the back seat?

We do not think that the Indian EV industry has been on a backseat. The value of the Indian Electric Vehicle Market has been pegged at USD 5 billion in 2020. It is expected to register a CAGR of above 44% from 2021-2026 and reach USD 47 billion by 2026. As per some other estimates, by the India Energy Storage Alliance (IESA) the Indian EV market is slated to grow at a CAGR of 36% till 2026. In the same period, the EV battery market in the country is likely to clock a CAGR of 30%.

However, lack of a countrywide charging infrastructure, price differences between EVs and Internal Combustion Engine (ICE)- driven vehicles, lower resale values of EVs owing to high depreciation and ensuring EV battery supply and recycling are significant challenges in setting up a robust EV ecosystem in the country.

Nevertheless, the negative perception about EVs will also soon be overcome with e-mobility gaining mass acceptance among the population, especially the millennial generation.

Q. Availability of adequate charging infrastructure is indeed one of the key requirements for accelerating the adoption of electric vehicles in India. In this regard, what is your battery swapping solution?

So, we have developed battery swapping solutions which we plan to launch by end-of this year. These stations will be – GPS-enabled and engaged in continuously monitoring the movement of drivers. If the battery charge is about to drop, an app will notify the driver about the range of his vehicle. An integrated infrastructure connecting the app with the GPS through a Virtual Memory System (VMS), battery swapping system and the customer’s individual battery ensures that the customer always remains in the loop and does not have to face any battery-related challenges.

Q. What are the challenges on the capacity building front?

The government should promote the sector more vigorously and incentivize local small and medium players to invest in the sector. Seamless technology transfer initiatives, access to liquidity, taxation benefits and the right policy support will encourage an increasing number of companies to enter this sector thus positioning it on a high-growth trajectory.

Q. The government provides many tax incentives through its FAME program. What is the kind of tax structure currently available, and what are the policy interventions you would want to see for enabling a more conducive environment for the EV segment?

Under the Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II), the government increased the demand incentive for electric two-wheelers from the earlier uniform subsidy of Rs 10,000 KWh to Rs 15,000 per KWh for all EVs, including plugin hybrid vehicles. Under this measure, provisioning was also done for capping incentives for electric two-wheelers from 20% earlier to 40% of vehicle cost.

The government must pass on these incentives to the customers in the form of direct cash transfer within stipulated timelines. The government should also facilitate easy term financing for EV manufacturers and carry out awareness campaigns for popularizing the use of EVs among the general masses.

Q. Are various stakeholders marketing EV cars aggressively enough to make people see the value in going for cleaner mobility options?

Various stakeholders in the clean energy value chain do not have clear roadmap yet to market EV cars aggressively. Nevertheless, there is increasing awareness and realization among the concerned entities on promoting clean mobility options for transitioning to a low-carbon economy. A positive investment outlook and aggressive marketing strategies are likely to shape the Indian EV growth story over the next three years.

Q. Finally, which states are catching up with the EV segment faster than others, and what are the reasons for that? Can you share the best practices of the ones doing well?

Gujarat, Karnataka, Maharashtra, Uttar Pradesh, Andhra Pradesh, Kerala, Madhya Pradesh, Tamil Nadu and Punjab are in the forefront when it comes to adopting EV vigorously. They have been pursuing a robust electric mobility agenda through supply side initiatives for manufacturing and demand side initiatives for incentivizing consumer and charging infrastructure investments.

They are also focused on creating dedicated manufacturing zones for EVs and setting up specified timelines for transitioning from ICE-driven vehicles to EVs. These initiatives will help transition to clean transportation goals in a sustained manner.

Q. In light of ambitious commitments of PM Modi at COP26 Summit, how do you see the EV segment shaping up in the next few years?

EVs will form a core component in the global fight against climate change. Policy initiatives like FAME for subsidizing EV production and charging infrastructure, clarity in guidelines for EV battery disposal and recycling, investing in battery research technologies and creating a user-friendly EV policy framework will be a key to building a robust EV ecosystem.

The EV segment in the country is set to achieve a high-growth curve and ensure the fulfilment of climate commitments made PM Modi at the COP26 Summit.