India Electric Vehicles Industry Snapshot

India: Performance of Electric Vehicle Industry

Quarterly Update: Q1 FY 2021 (Apr’2020 – Jun’2020) August, 2020

We Deliver the Authored by: Swetabh Singh, Senior Consultant (Automotive Practice) India Advantage

FY 18 FY 19 FY 20 FY 18 FY 19 FY 20

Over 80% of e-2W sales constitutes of low speed e-Scooters. Market is highly unorganized and dominated by low speed e- Transition to high speed scooters and bikes has been witnessed rickshaws. e-Auto (high speed variant) has shown significant since FY 2019. All leading players like Ather Energy, Hero growth especially in Tier 1 cities driven by shared mobility Electric, Okinawa, etc. are adding high speed variants to their companies like Smart-E, Ola, etc. portfolio Sales: e-Cars (Nos.) Sales: e-Bus (Nos.) CAGR: 68% 3,600 CAGR: 31% 3,400 600

400 350

1,200

FY 18 FY 19 FY 20 FY 18 FY 19 FY 20

In FY 20, several global companies like Hyundai, MG Motors, Segment has witnessed 50% growth in FY 20 where sales are Great Wall, etc. have entered the segment. Earlier, only TATA primarily driven by State / City Transport Utilities backed by Motors and Mahindra Electric operated in the segment serving government incentives. Olectra (JV with BYD) hold ~ 60% of mainly to Government and commercial fleets aggregators market share Source: SMEV, GoI, Tecnova Research, Industry Reports & Journals 2W: Two Wheeler; 3W: Three Wheeler; CBU: Completely Built Up; DHI: Department of Heavy Industry; EV: Electric Vehicle; e: Electric; FAME: Faster Adoption and Manufacturing of Hybrid and Electric Vehicles; FY: Financial Year; GST: Goods & Services Tax; Li: Lithium; MBBL: Model Building Byelaws; Nos: Numbers; Q: Quarter; SKD: Semi Knocked Down; VC: Venture Capitalist

We Deliver the India Advantage • e-2W segment has witnessed significant growth and has attracted over USD 600 Million of investments in last five years • e-2W sales in FY 2020 stood at 152,000 Units and has witnessed growth of 20% over previous year • Electric Cars had stunted growth primarily due to limited available options. However, with the entry of players like Hyundai, MG, etc. along with new offerings from existing players sales is expected to rise in coming years • Sales of e-3Ws has declined marginally in FY 2020 while is expected to rise steeply in the Facts & near future, driven by increasing cost advantages over its Internal Combustion-Engine Figures counterparts • Sales of high speed electric (top speed >25 kmph) e-2W has declined in FY 2020 (~28,000 units) compared to FY 2019 (~ 32,000 units) primarily on account of increased localization criteria (50%) to avail subsidy under FAME II scheme • Sales of high speed e-3W, first launched in Q4 FY 2019, has shown significant growth in FY 2020 (~90,000 Units) compared to 250 Units in FY 2019 driven by B2B sales & growth in shared mobility • e-2W, e-Auto will continue to be the most promising segments in India’s electric mobility journey while e-rickshaw will play a crucial role in providing last mile connectivity

Major Investment • Yulu Bikes, an e-bike rental startup, raised funding of USD 3.96 Million from Rocketship (USA based VC) • Great Wall Motor collaborated with Maharashtra Government, reaffirms plan to invest USD 1 Billion • Ola Electric Mobility acquired e-Scooter manufacturer Etergo BV based out of Amsterdam • Euler Motors raised USD 2 million in its pre-Series A funding round for setting up manufacturing and R&D facility, building indigenous Li-ion battery pack New Launches Upcoming Events

• Transport India Expo: Delhi, 20 -22 Oct 2020

• Audi e-Tron launch pushed to October 2020 • India Energy Storage Week: Mumbai, 2-6 Nov 2020 • Ampere Electric launched “Magnus Pro” electric scooter • Green Vehicle Expo: Bangalore, 8-10 Nov 2020 • Gemopai Electric launches “Miso” electric scooter • World EV Show: Delhi, 26 -27 Nov 2020 • BGauss, a new entrant in the Indian EV space, had • 11th EV Expo: Delhi 18 – 20 Dec 2020 revealed its two scooters “A2” and “B8”

Source: SMEV, GoI, Tecnova Research, Industry Reports & Journals 2W: Two Wheeler; 3W: Three Wheeler; CBU: Completely Built Up; DHI: Department of Heavy Industry; EV: Electric Vehicle; e: Electric; FAME: Faster Adoption and Manufacturing of Hybrid and Electric Vehicles; FY: Financial Year; GST: Goods & Services Tax; Li: Lithium; MBBL: Model Building Byelaws; Nos: Numbers; Q: Quarter; SKD: Semi Knocked Down; VC: Venture Capitalist

We Deliver the India Advantage Government Initiatives & Policies Photo from Unsplash

• FAME II: with budget of USD 1.4 Billion launched in April 2019 • Guidelines for EV Charging Infrastructures Revised (June 2020): De-licensing, priority electricity connection including open access to grid ‒ Tariff for electricity to the EV public charging stations (PCS) shall not be more than the average cost of supply plus 15% ‒ Battery Charging Stations will be treated at par with the PCS ‒ Captive stations cannot be used for commercial purpose • Amendments to MBBL: EV charging infrastructure for residential & group housing buildings • DHI revised Phased Manufacturing Plan for FAME II eligibility • Rationalization of Taxes & Duties ‒ GST on EV reduced to 5% from 12% ‒ Duty exemption on import of Li Ion Cells for Battery packs ‒ Additional income tax deduction of 1.5 lakh (USD 2,109) on the interest paid on loans taken to purchase electric vehicles • Customs duty on CBU of electric commercial vehicles increased to 40% from 25% while for SKD electric buses, trucks and 2Ws it has been raised from 15% to 25% • Government to scrap registration fees for EVs • Delhi has rolled out Electric Vehicle Policy 2020 • Karnataka government to waive registration fee, stamp duty for EVs • Uttar Pradesh cabinet approved road tax relief to EV manufacturers

We Deliver the India Advantage Guidelines for EV Charging Infrastructures Revised (June 2020): De-licensing, priority electricity connection including open access to grid

Photo by Unsplash

We Deliver the India Advantage Quarterly Summary: High Speed EV

High Speed Electric Vehicle Sales: January to June 2020

16,434 16,146 13,619

6,135

901 1,277

Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20

• High Speed Electric Vehicles constitutes of vehicles with top speed of over 25 kmph • High speed electric vehicles with current share of ~ 16% of total electric vehicle sales in FY 2020 has a longer gap to fill given the affinity & preference of Indian customers for low speed vehicles being an economical alternative • High Speed EV sales registered a decline of ~82% in Q1FY2021 (8,313 Units) compared to previous quarter i.e. Q4 FY 2020 (46,199 units) • EV sales has witnessed fall in Q1 FY2021 amid slowing economy due to COVID -19 induced lockdown • Sales of high speed EVs have hit the lowest in April 2020 registering a decline of 95% compared to January figures • However, sales in June 2020 has witnessed steep rise (~600%) compared to Apr - 2020 indicating sales normalization trend in EV market

High Speed e-2W Sales: January to June 2020 High Speed e-3W Sales: January to June 2020

12,781 551 822 12,550 314 810 114 9,937 715 155 575 664 575 431 1395[VALUE] 101 285 614 201 356 4,124 [VALUE] 90 480 157 759 569 866 369 294 [VALUE] [VALUE] 286 151 [VALUE] 578 467 331 56 30 331 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Ampere Ather Hero Electric Okinawa Revolt Others* High Speed e-3W: Cargo High Speed e-3W: Passenger

• Sales of high speed e-2W in Q1FY2021 has witnessed a • Sales of high speed e-3W in Q1 FY2021 has witnessed a decline of 74 % (2,444 units) compared to Q4 FY 2020 (9,555 decline of 84 % (5,869 units) compared to Q4 FY 2020 (36,644 units) units) • Sales in Apr 2020 was worst hit due to CoVID-19 pandemic • Sales in Apr 2020 (815 units) was worst hit due to CoVID-19 falling ~97% compared to January figures pandemic falling ~94% compared to January figures (13,128 • However, sales in June 2020 has witnessed a significant units) growth (1,850%) compared to April 2020 • However, sales in June 2020 has witnessed a significant • Top 4 players constitute ~ 75% of market share of high speed growth (450%) compared to April 2020 e-2W market • Market share of e-3W passenger vehicles constitutes ~96% of • *Others include players like Jitendra New EV, Avon Cycles, total high speed e-3W sales Avan Motors, etc.

Source: SMEV, GoI, Tecnova Research, Industry Reports & Journals 2W: Two Wheeler; 3W: Three Wheeler; EV: Electric Vehicle; e: Electric; FY: Financial Year; kmph: Kilometers per hour; Q: Quarter; SMEV: Society of Manufacturers of Electric Vehicles

We Deliver the India Advantage Electric Mobility Post COVID-19 Photo from Unsplash

Key Headlines

• Electric Vehicle sales, excluding e-rickshaw, witnessed 20% growth in FY 2020

• India can become electrical vehicle manufacturing hub in 5 years: Nitin Gadkari, Minister for Road Transport & Highways

• Okaya Power collaborated with Charging Interface Initiative (CharIN E.V.) to develop advanced EV chargers

• Ather Energy partners with P2P scooter sharing platform

• Tata AutoComp partners Tellus Power Green on EV infrastructure

• RR Global plans to enter electric two-wheeler space under brand name Bgauss

• MG Motor India signed an MoU with Tata Power Ltd to set up fast charging stations

• Tata Nexon EV now India’s highest selling electric car: Outsells Hyundai Kona, MG ZS

• Mahindra tweaks EV strategy, to focus on electric three-wheelers

• Kia, Hyundai and LG Chem join hands to identify EV startups globally for investment

• Industry demand EV should comprise 20-25% of government’s new purchases

• FICCI urges Government to extend FAME-II for two years to boost EV demand

• Housing societies, malls must reserve 20 per cent parking for e-vehicles in Delhi

• India’s electric story will continue to be dominated by light mobility post COVID-19

Source: SMEV, GoI, Tecnova Research, Industry Reports & Journals 2W: Two Wheeler; 3W: Three Wheeler; CEO: Chief Executive Officer; EV: Electric Vehicle; e: Electric; FICCI: Federation of Indian Chambers of Commerce and Industry; FY: Financial Year; IoT: Internet of Things; MoU: Memorandum of Understanding; M&A: Merger & Acquisition; MNRE: Ministry of New and Renewable Energy; NITI: National Institution for Transforming India; OEM: Original Equipment Manufacturer; SMEV: Society of Manufacturers of Electric Vehicles; USD: United States Dollar

We Deliver the India Advantage Electric Mobility Post COVID-19 • COVID-19 global pandemic situation has led to complete supply chain disruption in the EV space and brought an extended halt to the manufacturing in India for over three months due to high reliance on imports of power electronics especially from China

• The industry is expected to pick up by Q3 FY 2021 with onset of festive seasons & sales getting back to normal

• Lockdown has given a context to realize positive impact on environment (pollution level dropped ~ 50%) if we remove conventional vehicles off road. Hence, government will push harder to promote cleaner mobility in the country

• India is drifting towards ‘atmanirbhar’ (self-reliance) in the wake of the pandemic hence, large-scale import substitution in the EV space is anticipated

• “Business houses are taking a leap of faith and beginning to invest in EVs, sensing an opportunity in batteries and IoT and EV-specific components” Shinder Gill, CEO Hero Electric & Official Spokesperson, SMEV

• e-2W & e-3W will continue to be the growth engines fuelled by various drivers, of which strong governmental push and affordability would play key roles.

• MNRE, along with NITI Aayog, is working on a battery manufacturing policy, wherein the government plans to offer upfront fiscal subsidy to local lithium battery manufacturers while for other components such as power trains, supply-side incentives can similarly trigger localization in addition to the demand generation.

• In light of the enormous opportunity emerging from localization drive for manufacturing batteries, power electronics, etc. among others, it is estimated that value chain of EV in India will reach USD 4.8 Billion by 2025.

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