Electric mobility post-COVID: EV sales growth to be driven by these four factors in India

Overall, as the sales of two-wheelers increase, electric vehicle sales will also grow in tandem or even faster than the ICE counterparts.

By:Updated: Jul 07, 2020 4:59 PM

electric vehicles , automobile sector, BS-IV vehicles, NBFC sector, Post-lockdown, CNG vehicles, post covid world, EV manufacturers, transport sector

As we move in to Unlock phase, post almost 3 months of lockdown, I can’t help but think about how it is going to affect our industry – Electric Mobility. Union Minister Nitin Gadkari has said that India will become the manufacturing hub for electric vehicles in the next five years. While addressing a webinar on, “India’s electric roadmap post-COVID-19”, the Union Minister was certain that the business environment will improve as the sales are expected to rise.”

Before we start on how it is supposed to happen, let us understand what is the ecosystem that we operate in and the opportunities which will affect us in the times to come.

Author: Nishchal Chaudhary, co-founder, BattRE Electric Mobility

As of now, only 25% of Indians own a vehicle of their own. Of this, 76 % of the vehicles are 2 wheelers i.e. 23 crore vehicles. India is currently the largest 2-wheeler market in the world and has sold 1.7 crore vehicles in the previous year. This data suggests that despite being an under-penetrated market, India adds a record number of vehicles on a yearly basis.

Also, if the vehicle penetration is low, then the question arises- How do Indians commute & what are the various public transport options available?

Local Commute pattern

If the vehicle penetration is so low, how do Indians commute? What are the various public transport options available?

Buses

Numbers

No of buses

16 lakh

Public Buses

1.7 lakh

No of passengers

7 crore

Average Bus carries

412

·        Every day around 7 crore people commute in 1.7 lakh local buses.
·        That’s around 412 people per bus.

Locals & Metros

Daily Passenger

Delhi Metro

47 lakhs

Mumbai

75 lakhs

Kolkata

7 lakh

 Total

1.29 crore

·        Approximately 1.3 crore people travel in local trains/metros every day.
·        Trains and metros are around 12 – 14 times more crowded as compared to their capacity.

That makes it a total of 8.3 crore trips per day in overcrowded buses, local trains, and metros. Even if we assume every traveler, travels to &fro that’s more than 4 crore people using public transport on a daily basis.

So, to sum it up, India is under-penetrated in terms of vehicle ownership, and a huge population is dependent on public transport for the daily commute.

As people come back to work post lockdown:

Of course, post lockdown it will be a huge challenge to maintain physical distancing in overcrowded public transport. A majority of the low-income commuters might prefer personal mobility – as it will be safer & convenient to travel.

What are the implications for the 2wheeler market in general and electric mobility in particular?

It is certain that the overall sales of 2 wheelers will see a boom post lockdown, owing to the need for personal mobility.

Overall, as the sales of two-wheelers increase, electric vehicle sales will also grow in tandem or even faster than the ICE counterparts. According to a study conducted by Frost and Sullivan – e-rickshaws, e-autos, and e- two-wheelers are the most promising segments for electrification in India and are supposed to account for over 4-million sales by 2025. The study also suggests that 30-40 percent of scooters in the country will be electric in 7-8 years.

Electric vehicle sales growth will be driven majorly by:

The major factors which will be responsible for the spurt in sales of the electric vehicles will be:

· Environment conscious segment: During the lockdown people have witnessed Cleaner skies, Crisper air – AQI levels at best over many decades, leading to a higher appreciation for the environment. A segment of environment-conscious people will like to move to Electric vehicles in addition to their ICE vehicles.

· Fuel Costs: The cost of renewable energy resources is also coming down and is supposed to remain viable in the upcoming future if compared to crude oil prices. Also, there has only been a spurt in the cost of fuel in the country in the last few weeks post lockdown.

· Lower-income segment: This is a huge segment of people who do not own any vehicle currently and are completely dependent on public transport. As their need is a basic vehicle which can take them from point A to point B – With a low cost of acquisition and low cost of running. In the past decade, we have seen 2 wheeler segments beating the GDP trends. Also, the government has lowered the GST on electric vehicles to 5 percent.

Also read: How car rental could be your new safety move against COVID-19 after lockdown

· Entry-level EVs will have a much higher acceptability for personal mobility, owing to

o Lower purchase price as compared to ICE vehicles

o Lower running cost as compared to even public transport

o Safer as compared to public transport – social distancing

o Ease of use, lighter weight as compared to ICE vehicles, easier to navigate, reduce travel time as compared to public transport.

o Better technologies have emerged in the past couple of years – longer battery life, faster chargers, and detachable batteries.

Conclusion

Electric Mobility which contributes to less than 1 % of the two-wheelers market can only increase from here. We are going to witness new segments with varied usage behaviors leading to the introduction of new products and new business models. New models in ride-sharing, peer to peer sharing, rentals, leasing are emerging and will offer a boost to this industry in a very big way.

If we are able to adapt ourselves to the needs of the new categories’ vehicle buyers/users, we have a very strong chance of seeing a V-shaped recovery in this segment.

Author: Nishchal Chaudhary, Founder & CEO, BattRE Electric Mobility

Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.

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