Last week, a Bengaluru-based online bus aggregator ZipGo has announced its Rs 300 crore fund raise, and also said it would use the funds to transition its fleet to the electric vehicles. ZipGo is not the first one to bet on the electric vehicles, and also will not be the last one. In the year 1999, when the electric car Reva was launched in India, the Founder Chetan Maini wanted to usher in an electric vehicle revolution in the India. In the year 2010, Chetan had sold the company to Mahindra & Mahindra as only deep pockets could nurture and sustain a company like Reva, which got a second lease of life as Mahindra e2o.
But the market conditions are vastly differeing these days. The Zoomcar, in collaboration with Mahindra & Mahindra, has recently launched a fleet of electric vehicles. According to the Co-founder of ZipGo, Jitender Sharma, there is a huge infrastructure gap in India’s urban mass transport system. “Getting into electric vehicles, company wise, is economically more viable. Not only does it increase the energy efficiency by 30 to 40 percent, the total costs come down by 70 to 80 percent when compared with diesel or gas vehicles.”
As a part of the government’s electric mobility plan, the Centre is targeting the conversion of 30 percent of the country’s total vehicle fleet to electric in the upcoming 10 years. India is said to be fifth largest auto market in the world, and crude oil imports make up the single largest component of the country’s import bill at nearly $85 billion this year, according to data from the Oil Ministry’s website. Reports suggest India imports close to 82 percent of all its oil needs.
ALSO READ: What factors one must consider before choosing a chatbot platform
The government of India, in a report, said that switching to electric vehicles is estimated to bring down its crude oil import bill by a whopping $60 billion, and will also reduce emissions by 37 percent. “The government also has a national electric mobility mission plan. We are waiting for that,” says Chetan Maini, Co-founder and Vice Chairman of Sun Mobility. Greg Moran, Co-founder and CEO of Zoomcar, says,“We entered the electric vehicles space because it was a better way for last-mile connectivity. Most electric cars are small and compact; they are easy to manoeuvre, operate, and running costs are much cheaper.” Apart from Mahindra & Mahindra, others in the electric vehicle manufacturing space include two-wheeler manufacturers Ather Energy, Ultraviolette, and Ampere.
A Mumbai-based company, AutoNxt is looking to prototype an electric tractor, while Hero MotoCorp’s Avon is the popular choice of many companies. Delhi-based electric auto company SmartE procures electric autorickshaws from Kinetic Green and runs an auto-hailing service. “We launched with 30 vehicles more than two years ago. We used to move about 2,000 customers on a daily basis back then. Today, we move over 40,000 commuters per day. The company operated on strong unit economics, and was profitable for the financial year 2017,” says Goldie Srivastava, Founder and CEO, SmartE. Car manufacturers like Hyundai and Maruti are also set to launch a range of electric vehicles.
Looking to China
There are critics aplenty who question whether this ‘movement’ will last and if it is sustainable. For them, Jitender cites a Forbes article that states Shenzen in China went from zero to 16,000 electric buses in four years, reducing crude oil demand by 279,000 barrels per year. “Not to mention, if used in mass transport, EVs reduce pollution. Earlier, electric vehicles were expensive, but not anymore as Chinese manufacturers are looking keenly at Indian companies,” Jitender adds. News reports suggest Hyderabad-based Gold Stone Group is setting up a manufacturing facility at a cost of over $2 billion for Chinese electric bus maker BYD. It is also keen on manufacturing batteries for electric vehicles in India.
Taking charge
One of the reasons why the electric vehicle revolution has taken over India is that battery costs have come down significantly. Media reports suggest prices have dropped from $600 per battery unit to $250 last year. This is believed to further fall to $100 by 2024. The central government is planning a lithium-ion battery-making facility, which will be set up by Bharat Heavy Electricals. “We aim to set up about 100 interchangeable battery stations. This means you drive in to a Sun Mobility network, replace your battery, and drive your two-wheeler or three-wheeler away. It is cheaper this way because batteries make up 45 percent of a vehicle’s cost. By removing the battery cost with interchangeable systems, EVs becomes cheaper,” Chetan says.
Even charging infrastructure is better when compared to the one a decade ago and the government is working on different options to build a stable and a robust charging infrastructure. “Currently, with an average of 30 to 40 km drives, a car can be charged overnight. But with the government looking at an ambitious plan, the infrastructure needs to be in place,” Greg says. Ather Energy, which launched two vehicles this year, ensures the battery charges up to 90 percent in less than an hour. Two weeks before its vehicle launch, Ather launched its experience store and Ather Grid, a charging infrastructure for all electric vehicles, across 17 different locations in Bengaluru.
Goldie of SmartE says, “As India’s largest electric mobility company, we are extremely bullish about the space we are in and are seeing an unprecedented demand for our services. Having served over 25 million commuters in the last 36 months, we see a clear preference among users for shared electric mobility, which helps deliver a safe, comfortable, economical, and an environment-friendly experience. Further, as we have built EV charging infrastructure across three cities, a robust vehicle supply chain and highly-reliable energy partners, we have been able to successfully address some of the major concerns typically faced by an electric mobility startup.”
In February, Essel Infra announced its entry into the electric mobility space with an investment commitment of Rs 4,250 crore. Last week, it started setting up electric charging stations and battery swapping terminals across 20 cities of Uttar Pradesh. “In terms of manufacturers, photo-voltaic batteries and rare earth components will come from China, as will some sensors. Also, scalability depends on the cost of drop-in batteries, using solar energy to power batteries, building and distributing electric vehicles with energy infrastructure,” Chetan says. Around Rs 70,000 crore has been invested in the sector so far. Solar power, which cost Rs 10 per unit just five years ago, has now come down to Rs 4 per unit, and has become commercially viable.
Scandinavian countries like Norway and Sweden also have a strong EV infrastructure while France, Germany and the UK extend subsidies for EVs. The dominant players in the EV market are Nissan, Ford, Mitsubishi, and Tesla. All these cars have lifetime batteries pre-fitted in cars, and require charging stations. While there is strong speculation whether India can really achieve an all-electric vehicle mission by 2030, companies remain bullish on the shifts and changes seen in the market. It will be interesting to see whether India can move in the direction of electric vehicles like China.
