As more traditional automakers are going electric, India is also ramping up its efforts to join the EV race.
For instance, Gujarat aims to have at least two lakh 0.2 million EVs on the roads of Gujarat by 2024. The state government has launched policies to include charging infrastructure and tax subsidies to reach this goal (1).
An era of environment friendly transportation to come in Gujarat.
With an aim to witness 2 lakh electric vehicles on the roads of Gujarat in next 4 years,Chief Minister Shri Vijay Rupani declares Gujarat Electric Vehicle Policy 2021 pic.twitter.com/YdNVGjE1zq
— Gujarat Information (@InfoGujarat) June 22, 2021
India’s leaps regarding EV innovation could soon make the country a worldwide competitor in the e-mobility industry.
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The Competition is Fierce
China has emerged as the top leader in the EV market (2).
According to a report by InsiderEVs, last year, almost 6.5 million new passenger plug-in electric cars were registered worldwide, an almost 108% increase from the 3.1 million in 2020. The average market share of EVs also improved to about 9% (including 6.1% BEVs), compared to 4% in 2020 (including 2.8% BEVs).
Moreover, looking closely at the top 20 most popular plug-in models, Chinese models dominated the list in January.
BYD, a Chinese automaker, had sold more EVs in China than Tesla last year, with their sales jumping over 70%. And out of those top 20, 17 were Chinese plug-in cares, including seven from BYD. And the remaining three, Tesla Model 3, Tesla Model Y, and Volkswagen ID.4, are also produced partially in China.
A year ago, there were only 9 Chinese models in the top 20, and only two, two years ago.
Nonetheless, the Tesla Y Model beat all Chinese plug-ins and stood at the #1 position with over 32k units. However, while Tesla’s Model Y is rising, its Model has noted its lowest monthly result since April 2021.
Refer to the below image to learn about World’s top 10 selling plug-in cars in 2021:
As you can see, Tesla witnessed a strong year in 2021. However, in the first month of 2020, it is no longer a match for China’s BYD, which witnessed about 93,263 units, compared to Tesla’s 51,302 units. Meanwhile, the joint venture between the SAIC-GM-Wuling is in the third position.
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China’s BYD Continue to Zoom
One of BYD’s most popular models is the Song Plus DM-i-plug-in-hybrid. It went on sale last March, and its price starts from about 150k Yuan (or about 23,600 USD).
According to an analyst at a Chinese brokerage firm, Zheshang Securities, the Model sells so well because of its far better fuel economy than other competing gasoline vehicles within the same price range (3).
In China, BYD is known for its electric cars and hybrids, part of what China calls “new energy vehicles.” However, until 2020, gasoline-powered autos made up most of its sales volume.
Last year, the company decided to take a sharp turn away from gasoline cars, and sales in that segment dropped almost 40% to only 130k vehicles.
Meanwhile, sales of its plug-in-hybrid witnessed a sixfold growth to 270k vehicles, and electric vehicles more than doubled to 320k. Overall, its sales increased 70% in 2021, and estimates suggest that BYD could double its sales to 1.5 million this year.
BYD is on par with the new energy vehicle category against SAIC-GM-Wuling Automobile, a joint venture with its 4,500 USD electric car (4). BYD has captured the market for moderately priced hybrids and electrics. The Song Plus DM-i is part of a series of models named after Chinese dynasties like the Qin and the Yuan.
Many of BYD’s hybrids and electric vehicles are priced between 100k to 200k Yuan, well below Tesla’s electric car models that start at about 300k Yuan. At the same time, SAIC-GM-Wuling’s low-priced models are taking off in rural China.
BYD, which was formed in 1995 as a maker of rechargeable batteries, was quick to diversify its businesses over the years. It had entered the automotive industry in 2003. Even today, the company wins contracts to make smartphones and build monorails (5).
Notably, BYD had also jumped into manufacturing disposable masks in early 2020 when the COVID-19 pandemic had hit the world.
The rising demand for hybrids and EVs has changed the dynamic at the Shenzhen-headquartered firm.
“There has been a complete shift in priorities regarding passenger vehicles this year,” told a person familiar with internal discussions at BYD to NikkeiAisa.
Reportedly, the company aims to win new customers by expanding its ocean series, which features designs targeting young people and complementing the dynasty lineup.
Besides, it is also working on its overseas expansion and increasing its manufacturing capacity. Last year, BYD started exporting passenger EVs to Europe, and earlier this year, a model went for sale in Australia.
Assembly plants for passenger cars are limited to a few locations, including its headquarters in Shenzhen. However, the company is moving forward with its plan to expand its facilities in at least ten more locations.
Reports from local media suggest that the capacity to make passenger cars stood at about 600k in 2020 and the volume could surpass 3 million in the upcoming few years.
Profitability is one of BYD’s main challenges. Despite higher vehicle sales, net earnings in the second and third quarters of last year fell short of the year before.
One of the key causes is high input costs. BYD is vertically integrated, meaning it builds automobiles and the batteries, electronics, and other components that go into them, making it vulnerable to supply chain costs. BYD is looking to spin off parts-manufacturing divisions. In late January, a semiconductor subsidiary gained approval to float on Shenzhen’s startup exchange CHINext. BYD will be able to look for alternative suppliers after the listing.
A shortage of higher-profit flagship models is another source of concern. Only a few BYD cars cost more than 200,000 yuan, and almost none cost more than 300,000 yuan, whereas Tesla dominates.
Meanwhile, non-Chinese automakers are becoming more competitive. Volkswagen wants to increase sales of its ID series of next-generation electric vehicles. These automobiles are priced between 200,000 and 300,000 yuan. This year, the first of Honda’s e:N electric cars will be available.
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E-Mobility in Asia
In addition, experts also predict that E-mobility is a primary focus in Aisa as young individuals are more likely to purchase electric bikes and scooters, especially in China and India (6).
At the same time, range anxiety is still a major concern of EV adoption in India since it only has about 1,700 public charging stations (7).
The situation is not very different in the United States, where the EV charging network has only now started to expand with 5 billion USD funds over the upcoming five years (8).
Nonetheless, whether it is India, the US, or China, whichever nation builds its charging network will be able to scale first and have a huge competitive edge.
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Driving EV Sales in India
According to industry analysts, Maharashtra, Uttar Pradesh, Karnataka, Delhi, And Tamil Nadu are the frontrunners to becoming the “EV Capital” in India.
For instance, on January 18th, the state government of Tamil Nadu, home to Chennai, which is often touted as the “Detroit of India” for its automaking prowess (9), took the front page ad in The Economic Times to announce that the same was India’s preeminent “EV Capital.” The state also bragged about its 2.5 billion USD investment commitments from EV makers like TVS Motor, Ather Energy, and Ola Electric (10).
While it is not uncommon for state governments to boast in ads in India, this one appeared pointed; besides appearing in the Tamil Nadu edition of the paper, it also made an ad in Karnatak, a neighboring state which is also boosting its operations for the title of “India’s EV Capital.”
In 2020, Karnatak had received a rude shock when Ola, India’s major ride-hailing company had, chose Tamil Nadu over Karnataka to set up its 312 million USD e-scooter factor (11).
According to Pooja Kulkarni, CEO of a government agency focused on state’s investments, Guidance Tamil Nadu (12), “The ad was to send out a message. We want to thank all our partners and tell them that we are proud to partner with all these investors who repose their confidence in the state. And we wanted to make a statement of it.”
As India continues to move towards its net-zero goals by 2070, investments in the EV sector are also on the rise. Many states are looking to get a share of the industry that comes with it and appear to be in a race for India’s EV capital title.
More than 15 Indian states have launched EV policies that include several perks like cheaper land, tax subsidies, and charging and battery infrastructure in the last two years. All of these states have made ambitious promises to promote investments in EV manufacturing and increase the share of EVs on their roads (13, 14).
According to reports, Delhi is leading the way with more than 10% of its total care sales as electric vehicles. In addition, the state has also subsidized up to 50% of EV purchase costs for two and three-wheelers. Delhi also has lower-cost charging stations across malls, theaters, and housing societies (15).
However, According to a senior research analyst, Trupti Deshpande of CSTEP, Center for Study of Science, Technology, and Policy (16), being the “EV Capital of India” is not something states can declare.
According to Deshpande, there are no data-based means of making such a judgment. Identifying any state as the EV center in the future should be based on factors like the state’s GDP, promised investments, emissions impact, etc., and people’s lifestyles. “I don’t think any jurisdiction can claim to be the EV capital right now,” she remarked.
EV manufacturers such as Ola Electric, Ather Energy, and TVS Motor have invested 2.5 billion USD in India. E-mobility has the potential to propel India’s automobile industry to new heights, thanks to increased funding, car innovation, and government incentives.
Source :- https://timesnext.com Author :- Team Rucha Joshi Date :-April 04, 2022 at 11:51AM