Electric two-wheeler sales in India registered over two-and-half fold increase, reaching 8,46,976 units in 2022-23 over the previous fiscal. As more and more people opt to make this transition in India, we at Clean Mobility Shift, asked two-wheeler EV firm HOP Electric Mobility co-founder Nikhil Bhatia about the potential of the electric two-wheeler segment in the country and the opportunities and challenges associated with it.
Future of EV markets in India
Bhatia exuded confidence about the growth of the EV market in the country and explained why he is so bullish about the sector. He believes that a lot of other startup Original Equipment Manufacturers (OEMs) will jump into the EV bandwagon and the market will be accessible to many new firms. There will be a more democratised market in India, he feels and insists that one would see less of big brands and more and more of new players coming up.
He also shared his mantra on how an increase in EV sales can be achieved. The level one involves targeting conversion of all the Internal Combustion Engine (ICE) vehicles sales into EVs. Once that is done, then comes level 2 where one evolves new ways to further ratchet up EV sale numbers. “Achieving level one will take another five-year journey. The space is very huge,” he says.
In India, Ola Electric, Okinawa Autotech and Hero Electric together accounted for just under 50% of the market by the end of 2022. With their individual market shares of 17.57% (Ola) and 16.47% (Okinawa), just two of India’s two-wheeler manufacturers startups, today account for 34% of the country’s electric two wheeler sales.
Hero Electric (15.75%) along with Bajaj (4.02%) (India’s best-known two wheeler manufacturer) and TVS Motors (7.51%) are the country’s best-established two wheeler OEMs. Ather Energy, Pure Energy and Revolt IntelliCorp are other OEMs of note. Although numerous startups have jumped into the segment, these companies are among very few who have managed promising EV sales.
However, Bhatia feels there is a lot of potential for growth as the motor and battery technology is already commoditized.
“There will be very limited exclusive expertise. It will all be around better services, products, designs, and technology stacks. Any firm which covers these aspects a little better will be able to service the market well. There will be more independent players. At least 15-20 new brands will establish themselves in the market in the next five to seven years,” he said in the interview.
Market shares of India’s top e-two wheeler manufacturers 2022
|Company||Market Share in % (CY22)|
|TVS Motor Co.||7.51|
|Being India Energy||2.04|
HOP Electric Mobility works towards bringing sustainable products and technologies and are building the next generation energy mobility ecosystem that makes it easier to switch to electric vehicles. HOP Electric offers HOP the OXO, LEO, and LYF electric scooters. HOP LYF is the company’s entry-level low-speed offering. On the other end of the spectrum is its high-speed offering, the OXO, which now carries a price tag of Rs 1.48 lakh ex-showroom.
HOP Electric’s expansion plans
Bhatia said for the last six months, the company was not expanding very fast because of uncertainty in Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME-II) subsidy. However, the firm has now taken a call to proceed without it. “By the end of this year, we are looking at 400 more exclusive retail counters across the country. If everything falls into place, we should be selling close to 20,000 vehicles this year,” he said.
The Ministry of Heavy Industries' (MHI’s) had recently decided to slash the FAME II subsidy of electric two-wheelers to Rs 10,000 per Kwh from the Rs 15,000 per Kwh.
Fig 1. L HOP Electric OXO Model
Why are EVs here to stay
“The benefits of EVs are evident,” Bhatia says, arguing that not many people understand why EVs are beneficial. Elaborating about their benefits, he said if one is incurring a cost of 25 p/ km by running a HOP vehicle, driving any other EV in this category will also incur the same cost or perhaps one or two paise more but there would not be any milestone difference.”
“Why will this (EV) market be there? If you take a petrol vehicle and put one litre of petrol, only 45% of its energy will get converted and come to the wheels. This is very different in EVs. You get more than 90% efficiency in EVs,” he said. What this has done is bring down the cost from Rs 2.50 which would be incurred by an ICE vehicle to 25 paise/km in an electric vehicle,” he explains.
Apart from that, he argues, there are so many periphery advantages to EVs like the ability to track and trace everything about the vehicle, understanding its cell level data, among others.
Bhatia said India is perhaps the world's biggest e-rickshaw market and there is no single brand that rules the roost in that space.
“The market is big purely because of one reason – it has changed the lifestyle of that person. The person who used to earn Rs 300 earlier (after putting physical effort to drive the rickshaw) , now earns Rs 800 through an electric-rickshaw. When a product genuinely solves a lifestyle problem, helps somebody earn better, move better, that product will automatically scale up.
“It will not require a subsidy. There was no subsidy for e-rickshaws, there were no Hero or Bajaj promoting e-rickshaws but still we have more than 17 million e-rickshaws on the roads. That's a big number,” he said, asserting that there is immense scope of growth in this along with other segments.
He also expects that very soon there will be a price parity in the e-two wheeler section and once it comes, it will trigger the increase in EV sales. “The Price parity pocket for the two wheeler segment in India is around Rs 1 lakh. Only five to six per cent people can go for Rs 2 lakh price point. The masses will only trigger when you offer the right product at the right value,” he said, asserting that although this has not happened till now, it is not long before it does.
Is government doing enough to boost EV sector
Bhatia feels that the government has done sufficient work till now as it is supposed to be a facilitator and not create a market. Subsidies (provided by the government) are good amplifiers for a little while. But they do not allow the market to evolve on its own, he says.
He argued that there is a need at present to have simpler policies. The simpler the process is, the faster its implementation. That in turn allows companies like HOP Electric to do more innovation in this space – some financial, some product-related among others. “And only then perhaps we can crack open the market much faster,” he opined.
Environmentally-sustainable practices in EV industry
Asked about environmentally-sustainable practices and whether the battery recycling ecosystem is missing in the Indian context at present, Bhatia said HOP has inked a pact with another firm so that every battery that is being discarded goes for recycling.
“There are guidelines on battery recycling. There are no definite mandates that everybody has to do it. The way the government came out with the scrapping policy, it's not a mandate but if 15 years has gone by, the government is incentivising those who are scrapping the vehicles. Similarly for battery recycling there is no dedicated mandate that one has to comply, but yes, anything that makes business sense will automatically happen,” he said.
Speaking about the challenges being faced by the EV industry at present, he said supply chain is at an early stage and the mainstream automotive suppliers need to figure out a way to enable multiple people in the market and “open up their libraries to more people, so that multiple things can be developed”.