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Traditional auto players power up EV play

G Balachander Chennai | Updated on February 18, 2021

Car and two-wheeler makers ramping up production and charging stations

Home-grown traditional players in the automotive segment continue to make progress in the electric vehicle segment in the post-Covid period with a slew of initiatives even as the EV market in India continues to evolve.

While Covid-19 applied brakes on the development of EV ecosystem in the country, the past couple of months saw some improved activity in the EV market with the gradual opening up of cities.

While the EV market witnessed proliferation of e-rickshaws, other segments were yet to adopt in a big way. But, of late, the electric two-wheeler segment is witnessing a lot of activity with the entry of many new players, mostly driven by the Central and State governments’ promotion schemes, growth of gig economy, traffic congestion in urban areas, and of course, rising fuel prices. Post FAME-II, sales of electric two-wheelers were adversely impacted as eligibility requirements became stricter. Also, the EV ecosystem is not something to brag about.

New entrants

While new entrants are trying to get aggressive in the Indian EV market, traditional players that have taken a plunge in electric car, two- and three-wheeler segments don’t want to be seen out of the EV game or caught unprepared when the inflection actually happens. Each one of them is chalking out different strategy to grow in the respective vehicle category.

Despite having a lead, Mahindra Electric seems to be going slow on electric cars for now while channelising its focus mostly on three-wheelers, where it is reported to be doing well. Its ‘Born EV’ strategy is expected to prepare the company for meaningful EV transition in the core portfolio over the 4-5 years.

As the FAME scheme is not favourable towards electric cars (incentives available only for 35,000 commercially registered cars over three years with capping on max vehicle price), carmakers find it difficult to justify investments into EVs with the current level of demand. Moreover, with low volumes, Indian carmakers’ access to global supply of key EV components including battery packs becomes challenging, said Suraj Ghosh, Principal Analyst — South Asia Powertrain Forecasts, IHS Markit.

But, among the home-grown carmakers, Tata Motors appears to the most focussed on electric cars and has achieved gains with a differentiated strategy. It already has two electric cars in its portfolio and more products are in the pipeline. Also, it has set up more than 300 charging stations in 26 cities and on several prominent intercity routes across India. It is planning to scale this up to 700, across most major cities and highways by March 2021.

“India is a diverse market and will provide substantial growth opportunities for players across the EV value chain spanning products and services. OEMs have started to invest in fine-tuning their product portfolios, infrastructure and tie-ups. With the optimism OEMs are demonstrating, the right policy and regulatory initiatives along with standardisation of technology will ensure that India will see a significant acceleration of EV adoption,” said Vinay Raghunath, Partner and Leader, Automotive sector, EY India.

Two-wheeler segment

In two-wheelers, the adoption of electric two-wheelers is happening in pockets limited to metros and tier-1 cities currently.

While there are numerous players selling electric two-wheelers in these locations, traditional companies such as TVS and Bajaj are treading the EV path cautiously. For example, TVS recently launched its electric scooter iQube in New Delhi, a year after launching it in Bengaluru. While it will introduce the same in more cities in the coming months, the company is also developing a few more electric two-wheelers.

Ampere Electric, part of the Greaves Cotton, continues to expand its electric two- and three-wheeler volumes with a significant network ramp up, while it also roped in former Yamaha India marketing head Roy Kurian to drive its EV business. It added more than 80 outlets since unlock. Its electric two-wheeler business has now 300 dealerships across 230+ locations. Greaves Cotton aims to become an integrated player in last-mile e-mobility with strong presence in electric two- and three-wheelers.

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Published on February 17, 2021
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