The numbers tell the story at Bengaluru-based Ather Energy, India’s top electric two-wheeler maker by revenue which manufactures the 450X and 450 Plus. In October 2020, Ather, now nearly a decade old, was still in low gear and sold 500 scooters. But a year later in October 2021, Ather, accelerated sevenfold to 3,500. Ather now is reportedly soliciting funding to hike output to one million two-wheelers annually, unfazed by competition from a pile of startups and traditional automotive companies that have launched or are aiming to launch electric two-wheelers.
For instance, there’s the Mantis sports bike from Orxa Energies. Two of the Bengalaru-based startup’s bikes (expected to start selling this August) are undergoing an arduous trial-by-fire, travelling 14,500 km from Bengaluru to Leh and back. They’re encountering all manner of climate extremes from the plains’ heat to the freezing Ladakh blasts. Their escort team will be carrying portable electric chargers but the bikes will also be ‘tanking up’ at local charging stations wherever available.
So what’s happened to the EV industry? Has it suddenly reached escape-velocity and is it spinning into a new orbit? EV sales have rocketed in the last year, particularly of two- and three-wheelers. In December 2021, EV two-wheeler sales totalled 24,725, more than quadruple the total sold in the same year-ago month.
Powering into the fast lane is a clutch of scooters from two-wheeler giants like Hero, Bajaj and TVS and companies like Ola Electric which have aggressive EV plans. Ola’s mega-factory has capacity to make two-million scooters annually (economies-of-scale will enable sharp-edge pricing) and can be increased to 10 million. Founder Bhavish Aggarwal has made it clear he’s shooting for the 10-million target.
Others with big plans include Simple One and Bounce, which will soon launch its Infinity scooter and is also looking to rapidly build a battery-swapping network in gated colonies and homes. Okinawa Autotech, another leading EV two-wheeler maker, is aiming to double its manufacturing capacity to two million units.
Prices, too, are cresting downward and range from ₹60,000, on par with IC-engined bikes on the roads, to ₹1.40 lakh for an Ather 450X. In automobiles, though, the EV demand pickup is much slower.
Faring best are the Tatas with their Nexon which is gaining popularity rapidly and a second model, the Tigor. Another one moving quickly is MG with its ZS EV (starter price ₹21 lakh). Mahindra, meanwhile, plans to launch 16 EVs over seven years: that includes eight SUVs and eight light-commercial vehicles. High-end players like Mercedes, Audi and BMW are also selling electric models in India, though with their price points they don’t expect big sales in the near future. Audi’s model, for instance, costs close to ₹1 crore.
It’s clear the gamechanger in four-wheelers is some way down the road: the Maruti-Toyota alliance is working jointly on a midsize SUV that’s only slated to be out by 2025. Maruti’s said to have hesitated about losing its independence before finally partnering with Toyota. The advantage is it’s building a completely new platform to serve a global market. The collaboration is looking at manufacturing 125,000 vehicles annually, of which, 60,000 will be for Indian consumers initially. The SUV is likely to be out in Europe by 2024.
Maruti’s biggest advantage is that it’s setting up India’s first lithium-ion cell manufacturing plant. Since batteries are the biggest cost, this gives the company a major advantage. Maruti has in the past been sceptical about EVs, saying it would only be 10 per cent of the market by 2025 compared with government estimates of 30 per cent.
Maruti did attempt to launch an electric WagonR but appears to have dropped this initiative. Last year, it had sounded more enthusiastic about alternative fuels like CNG — sales of its CNG vehicles climbed by 50 per cent in a slow-moving Covid-hit market in 2021.
Crucially for the EV sector, moving even faster than vehicle sales, is the growth of the electric-charging industry. One calculation is the country will need 400,000 charging stations to service two million EVs by 2026. Currently, there are only a few thousand charging stations but that looks set to change rapidly and the emergence of EVs is likely to trigger an entirely new universe of businesses catering to the new requirements.
Some firms are negotiating with residents’ welfare associations to put up charging stations in gated colonies. The Delhi government is planning to build charging stations at all state-run offices. Another company Park+ has 30,000 parking slots in the major metros and is looking to team up with charging companies. International companies like ABB and Panasonic have big plans to establish charging stations. Also, Tata Power has put up around 1,000 charging stations and aims to have 10,000 charging stations both in cities and along highways.
One company taking a different tack is Sunfuel Electric which is looking at the upper end of the four-wheeler market. Interestingly, Sunfuel has struck deals with luxury hotel chains like IHG and Radisson to install premium fast-chargers. So far, it has installed 50 chargers at 20 locations and aims to have 100 up this quarter and 500 by yearend.
“Discussions are on with almost every premium real-estate developer and hospitality group in the country,” says co-founder and managing director, Mathew Koshy. Sunfuel installs mostly AC chargers at places in the city where cars are parked for longer periods. Along the highways, it’s looking at putting up fast DC chargers that can top up vehicles in 45-minutes-to-an-hour.
All this is taking place against a backdrop of non-stop technological evolution. Battery performance is constantly improving, which gives vehicles greater range. Also, in the two- and three-wheeler market, for instance, there’s still the question of whether battery swapping will triumph over scooters that come with a battery. Battery-swapping has the advantage in that it cuts the price of the vehicle considerably. In four-wheelers, though, battery swapping is less of an option due to the weight factor and the need for different-sized batteries for different models.
As thinking on batteries evolves, market leaders like Ather Electric are looking at changing their strategy on batteries and looking at making batteries that can be used in other bikes than their own. It’s striking a charging deal with Hero Motocorp (which has a 35 per cent stake in Ather). Hero Motocorp has also struck a partnership with Taiwanese company Gogoro for battery-swapping. And companies like Charzer are focussing on setting up charging points at kirana stores with a bit of extra space.
Even if interest in EVs has grown dramatically, some analysts wonder if the production is getting ahead of the expected size of the market. But others say that underpinned by government subsidies and determination to cut fossil-fuel dependency, the EV revolution is now looking unstoppable on Indian roads.