Neil Banerjee
SME Futures spoke to Mayank Jain, Director, Crayon Motors on how EV sector’s growth will pan out in India and what are the necessary steps that the government needs to take to make it easier for the masses to switch to electric- run vehicles.
Excerpts from the interview:
According to some estimates, there are around 550 EV start-ups in the country. What exactly are they involved in?
The EV sector is a new and evolving business. Hence, it offers various prospects for development and research. Starting with products and moving on to services, start-ups can be found everywhere. The products include vehicles, drivetrains, batteries and other equipment.
The services include providing specialised consulting in materials associated with BAAS (Battery as a Service), deliveries and much more. Some emerging sectors in the EV space are the development of autonomous driving and self-balancing. These are the key sectors in which the EV space is spread out. However, there are a variety of diverse service and product solutions that are being supplied by various start-ups.
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There was a 168 per cent increase in the sale of EVs in 2021. How do you see the market in the next 5 years?
For the next five years, the sales of EVs will only go upward. In the past few years, the industry was sort of conducting a dip test to evaluate consumer acceptance. But we can see that the demand for EVs is constantly rising. In addition, the constant development in the government’s policies has also increased consumer confidence and it’s set to get higher in the long run. There might be some short-term blows but overall, the industry will boom. Government support and incentives are very beneficial for this sector.
There are many challenges in front of the EV sector. Which do you think is the biggest of them all?
In India, battery technology is still in its early stages, and one critical point to remember when discussing the challenges and adoption barriers of the EV industry are the country’s weather conditions. Battery prices are high, which raises the overall EV cost; however, the easy availability of EV financing can definitely solve this problem. In recent times, we have seen that the government has constantly been in talks with the World Bank to introduce a risk-sharing mechanism to compensate the banks that are providing loans for electric vehicle purchases.
Don’t you think that there is a lack of charging stations in the cities? How can it be solved? Shouldn’t they be standardized?
For two/three wheelers, we don’t see many challenges as they mostly operate in the small range. So, they do not demand the higher charging infra, but for 4W/commercial vehicles, the Indian Government has been working tirelessly to improve the infrastructure for public EV-charging stations by involving both public and private organisations.
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Many private players have stepped up to establish charging stations for vehicles and build a large network across the country. Additionally, in the previous budget, the government had put significant weightage on introducing battery swapping technology to the Indian masses and many start-ups and private giants have dived into this segment. These broad initiatives will go a long way in meeting the needs of the Indian people.
Many people want to embrace green mobility, but the high cost prevents them from doing so. What are your views?
Our initial costs may seem to be somewhat higher, but we must also consider the extremely low on-going costs of an electric vehicle, which completely changes the equation and the cost of ownership. Apart from this, the FAME scheme from the central government and various subsidies like GEDA (Gujarat government’s scheme to encourage e-mobility) are helping customers to minimise the initial owning cost.
Urbanisation is growing at breakneck speed. Don’t you think that town planners should chalk out a policy on public transport that runs on electricity?
Yes, with the urbanisation rush, many things have been upgraded, and mobility should be advanced as well. Only electric vehicle adoption can make this scenario viable.
The adoption of EV 2w-4w for personal transportation, as well as the electrification of shared transportation, such as taxis or cabs, will benefit the environment and reduce the carbon footprint. We can already see the adoption of electric vehicles (E-buses) in public transport. Electric three wheelers are becoming very popular as a means of last mile connectivity for goods and passengers.
Not only in transportation, but also in industrial, social, personal, and consumption patterns, changes must be made over time. We need to start believing in India’s Cop27 theme, ‘LiFE – Lifestyle for Environment’, and adapt accordingly.
There are very few options today when one goes to buy EVs. How can start-ups play a role in this?
The EV industry in India is still in its infancy with start-ups playing a critical role. India is a price-conscious market, and Indian consumers are constantly looking for good value. The formula that the start-ups must master is to come up with an EV that is suitable for Indian conditions at an affordable price. However, a large number of players have recently forayed into India’s EV market. As a result, consumers will soon be spoilt for choice. Therefore, manufacturers with faster turnaround times will be able to better serve them.
Don’t you think that there should be more start-ups which can make EV batteries — lithium technology and li-ion batteries?
Yes, because in the long run, this will serve as a stepping stone towards Atmanirbhar Bharat. Start-ups are mostly a part of the battery manufacturing setup. Interesting advancements are being made in that area to extend battery life, make batteries safer and reduce costs.
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There are numerous opportunities for start-ups that are interested in entering the EV cell business, as it is difficult to imagine India’s future mobility without EVs. However, as we have seen in the past, there are some bottlenecks, such as supply chain challenges for importing lithium cells and BMS, logistical issues and India’s diverse weather conditions. The establishment of cell manufacturing facilities is a capital-intensive industry, but many enterprises are showing interest in this endeavour.
In the future, when the demand for EVs surges, so will the demand for electricity. How will we meet such high demand?
This is a good question. As the demand for electric vehicles grows, so will the demand for electricity, but the amount of electricity required to run an EV two-wheeler for hundreds of kilometres is only a few units. Also, the EV sector in India is still in its early stages, so we can expect it to improve.
Apart from this, Smart Grid technology is getting developed, and the use of renewable natural resources such as solar, wind, geothermal, biomass and low-impact hydro facilities will help to meet the electricity demand as well. Initiatives offered for the charging of vehicles during off-peak hours and the introduction of battery swapping technology will help to fulfil the rise in demand for charging infrastructure due to the surge in the number of EVs.
How can start-ups raise awareness to change the public perception about EVs?
Only by consistently innovating and expanding technology can the EV sector grow exponentially. This is a costly endeavour for a single enterprise to sustain, which is why technology sharing will become critical. Range anxiety is a major concern for the Indian EV ecosystem. However, the development of battery swapping, and fast charging technology can be critical in combating it.
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The central theme of the EV sector must be safety, which will give customers the confidence to purchase an electric vehicle. After sales service and a good customer experience will also play a vital role in changing consumer sentiment because it creates awareness with the help of the strongest marketing strategy which is called word of mouth.
Not only the start-ups but the whole EV ecosystem has to work together to raise awareness and to change public perception. Growth in the EV sector can happen exponentially only by consistently innovating and expanding technology. This is an expensive affair for an individual enterprise to sustain, which is why technology sharing will become crucial.
