The electric vehicle revolution in the Indian two-wheeler market has created big opportunities, and as a result, the segment has seen the entry of numerous players. Many of them are reporting good progress and are making additional investments even as the charging ecosystem is evolving in the country. Hero Electric is the largest electric two-wheeler brand in the country, and it has embarked on a massive expansion plan for future growth. CEO of the company Sohinder Gill talks about the electric two-wheelers, supply chain industry, challenges and the growth outlook. Excerpts:

How would you describe the electrification in the two-wheeler segment?

The conscious shift to sustainable solutions and increased fuel prices has fuelled the demand for electric 2Ws in the country. Furthermore, the Government's push towards electrification with a revised FAME II subsidy structure and state-wide policies has helped steer the segment tremendously. At Hero Electric, we have witnessed a hockey stick growth with upward sales momentum, which has driven us to expand our production capabilities at our Ludhiana plant to 5 lakh units from 1 lakh. We will manufacture more than 1 million EVs by 2025. The EV penetration will continue to grow in the coming years with the Government's aim to have sales penetration of 30% for private cars, 70% for commercial vehicles, 40% for buses, 80% for two and three-wheelers by 2030.

Do you see the supply chain industry gathering pace for E2W?

As demand for electric two-wheelers is surging, the supply chain has been marginally strained. But, once the manufacturing capacity and other facilities are in order, the pace will gradually pick up. So far, there is limited traction in the EV space however, more companies are now investing in the segment like manufacturing, infrastructure, battery/cell chemistry, etc. There is a strong push from the Government to promote the production of cell technologies, components, etc., with PLI and ACC PLI schemes. Further, implementing these schemes will ease supply chain stress aiding the segment growth in coming years.

How are OEMs ensuring quality standards in EV manufacturing?

OEMs have multiple checkpoints during the production stages of an electric two-wheeler to ensure the quality of the products. These standards are defined for product specifications, process workflows, and work instruction. It is imperative to note that EVs have fewer moving parts, which means lower maintenance costs and needs. The SAE standard has set the acceptance criteria for the lithium-based rechargeable system used in electric vehicles. Moreover, the ‘Charging Infrastructure for Electric Vehicles – Guidelines and Standard’ states the role of various stakeholders of central and states to ensure quality developments across the country. At Hero Electric, safety is of utmost priority that is ensured by our R&D team through various checks during the production process. Moreover, we only use the highest quality materials and parts to make the vehicle safe for our customers.

What is your growth outlook for electric two-wheelers in 2022?

Overall, the electric two-wheeler segment is projected at 60-70% adoption by 2030 and 80% penetration by 2050. As the sector grows, we anticipate multiple challenges and opportunities in 2022 like charging infrastructure, easy and faster loan approvals, etc. It will increase in demand with significantly increased competition, considering consumers' understanding of the potential and benefits of making the EV switch.

While India is the largest two-wheeler market with 17% segment space, with 1 EV per 125 vehicles in India. The segment’s heightened interest and investment are estimated at ₹94,000 crore in the next five years.

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