 "Continue FAME subsidy till EV penetration touches 10%: Greaves Electric CEO")
The government subsidy for the purchase of electric vehicle (EV) to the vehicle makers should continue till the market reaches an EV penetration of 8-10 per cent, said a top official of Greaves Electric Mobility Private Ltd.
"FAME (Faster Adoption and Manufacturing of (Hybrid & Electric Vehicles in India-II) subsidies have played a critical role in encouraging consumers to adopt EVs. It is essential that the subsidy allocation to OEMs (original equipment manufacturers) continues, till the market reaches an EV penetration of 8-10 per cent," said Sanjay Behl, CEO and Executive Director of Greaves Electric Mobility Private Limited (GEMPL).
Greaves Electric Mobility is a subsidiary of Greaves Cotton Limited (GCL).
During the first half of the current fiscal the Greaves Mobility logged a revenue of Rs 599 crore selling electric two (Ampere) and three wheelers (ELE rickshaw, Teja electric autos and cargos).
The company has retailed 70,390 two and three wheelers as of year-to-date (YTD) FY23.
"We have been at 13 per cent market share in the two wheeler category as of YTD 2023. At Ranipet, our largest EV production facility, we have produced nearly 75,000 electric scooters till December 2022. Our production capacity is 250,000 units in a single shift and can be ramped up to 5 lakh in 2 shifts," he told IANS in an interview.
"We are one of the early pioneers in India's EV story. Since its foray into e-mobility, Greaves has raised and committed Rs. 1,500 crore to develop the 'Make in India' EV ecosystem. With increasing demand for EVs, we have the capacity to ramp up production to one million units annually."
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Q. On the trend you see in the sales of EV in India...
A. We see an upward trend in sales for all the segments. Electric two wheelers sales is expected to increase in the future, penetration to increase up-to 10-15 per cent by FY25 and is likely to see penetration of 20-30 per cent by FY27-30. The E-rickshaw segment is doing well and it will continue to do well as it offers higher savings to auto drivers. With low cost of operations, e-rickshaw drivers can earn more than a normal rickshaw puller and with greater comfort. With the rise of battery swapping services, e-rickshaw drivers are also able to overcome range anxiety as they can swap discharged batteries at a swapping station and get back to the road within a few minutes.
With the increase in working population, autos fulfill the demand for last mile mobility. The cargo segment will continue to grow, driven by the e-commerce industry and hyper local delivery requirements of on-demand food, groceries and other such services.
Q. On the industry sales numbers for two wheelers, three wheelers and autos. Where does Greaves Electric figure in this?
A. As of December FY2023, sales of electric two-wheelers stood at 5.07 lakh units, E3W stood at 2.77 lakh units. We have retailed 70,390 E2Ws & E3Ws as of YTD FY23. Ampere 2Ws, have a market share of 13 per cent.
Q. How ready is India for mass adoption of EVs?
A. India is ready for a rapid increase in EV adoption and this is driven by many factors. These include FAME II subsidy, higher fuel prices, improved battery and range (reducing range anxiety), new and existing players coming out with better products, increasing awareness of benefits of EVs and adoption by consumers, more players developing the charging infrastructure, localised EV supply chain and more. EVs offer a better total cost of ownership (TCO) and our Indian consumers find this appealing.AA
Q. How do you create a compelling reason to buy an electric scooter, three wheeler and autos without any fear (like the petrol fired ones). The challenges being cost, charging networks, infrastructure?
A. While the upfront cost of EVs is higher, their operating costs are significantly lower. Two wheeler customers find EVs appealing as monthly operating costs are significantly lower, and they mostly charge their EVs at home. In the case of three wheelers, the bottom of the pyramid customers is drawn to the higher savings proposition of EVs. Total Cost of Ownership is an important driver of the "EV purchase decision".
Q. It is said much of the technological developments are happening in the passenger vehicles segment and not in the two wheelers. For example, it takes longer time to charge a two-wheeler as compared to an electric car. What is your company planning to do on this?
A. Technology development is aligned to the product and use cases. An electric car today takes longer to charge at home than a typical E2W. Yes, there are some fast-charging solutions for four wheeled passenger products based on the demand from customers. The technical solution of fast charging scooters is available for two wheelers too, and depending on demand from customers, companies including Greaves Electric will offer the same.
Q. I understand three-wheeler EVs are selling more owing to battery swapping facility which is not there in the case of two wheelers, your views.
A. Battery swapping is still a niche play and does not see widespread deployment. E3W are selling for their TCO and comfort advantage over ICE (internal combustion engine) counterparts.
Q. With EVs, India is shifting its import dependence from Middle East (oil) to China -- lithium ion and rare earth materials. How can India be self-sufficient?
A. It is estimated that India's Li-ion battery demand will grow from the current stage of 3 GWh to 20 GWh by 2026 and 70 GWh by 2030, according to a report by Arthur D Little. It is important to reduce import dependency and make India self-reliant with a robust, localised EV ecosystem. The manufacturing of cells requires substantial capital investment, is complex, and requires a global supply chain of raw materials. However, we are likely to see significant cell supply localization in India by 2030.
The government has approved the Production Linked Incentive (PLI) Scheme 'National Programme on Advanced Chemistry Cell (ACC) Battery Storage' for achieving manufacturing capacity of 50 Giga Watt Hour (GWh) of ACC (advanced chemistry cell) for enhancing India's Manufacturing Capabilities with a budgetary outlay of Rs 18,100 crore.
This PLI scheme for Advanced Chemistry Cell (ACC) (Rs 18,100 crore) along with the already launched PLI Scheme for automotive sector (Rs 25,938 crore) and Faster Adaption of Manufacturing of Electric Vehicles (FAME) (Rs 10,000 crore) will enable India to leapfrog from traditional fossil fuel-based automobile transportation system to environmentally cleaner, sustainable, advanced and more efficient EV based system.
Q. Localisation levels in the industry and for your company? What are the items you import and from where?
A. We are committed to aMake in India' with a high level of localization and components obtained domestically. We only import items that are allowed as per FAME, like cells, battery management systems (BMS), semiconductors and thermal materials. We recently unveiled six new electric two and three wheelers at Auto Expo 2023, and all of them have been designed, engineered, developed and made in India.
Strengthening our localization play, Greaves has forayed into e-powertrain suite, which will be characterized by cutting-edge design, engineering, materials chemistry, weight and aesthetics that will be customized to the needs of OEM customers. The entire powertrain portfolio will be manufactured in-house, which again attests to our 'Make in India' strategy.
Q. On your distribution network in the rural areas? Sales in rural areas for the industry and for your company.
A. Ampere has a sales of 50 per cent in Tier 1-2 towns and 50 per cent beyond the Tier-2 markets
We are one of the early pioneers in India's EV story.A Since its foray into e-mobility, Greaves has raised and committed Rs. 1,500 crore to develop the 'Make in India' EV ecosystem.A With increasing demand for EVs, we have the capacity to ramp up production to 1 million units annually.
(Venkatachari Jagannathan can be reached at v.jagannathan@ians.in)
--IANS
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(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)