The electric vehicle (EV) landscape in India has experienced significant evolution, driven by advancements in battery technology, shifting consumer attitudes, and declining battery prices. This evolution has particularly impacted the two-wheeler and three-wheeler segments, which have seen rapid growth in EV adoption. These segments offer a variety of product options catering to different consumer needs and price points.
One of the reasons for the success of electric two-wheelers and three-wheelers is their well-defined usage patterns, which make them suitable candidates for electrification. The range offered by these vehicles is typically sufficient for most daily use cases, further enhancing their appeal to consumers.
The combined sales of electric two-wheelers (857,052 units / + 36%), and e-three-wheelers (581,696 units / + 66%), accounted for an overwhelming 94.25 percent of the Indian EV market in 2023.
Moreover, businesses have recognised the benefits of adopting EVs, particularly in B2B applications such as last-mile delivery. The lower operating costs associated with electric vehicles enable companies to maximise their profits and returns quickly. This has led to a growing implementation of EVs in commercial fleets, where companies can leverage the economic advantages offered by electric mobility solutions.
It is this class of vehicles that has been registering the maximum growth, inviting a flurry of new entrants to venture into the automotive space in the country over the last few years. And, among these startups, there is one common intent — that is solving the peculiar mobility problems faced in India by virtue of their unique business ideas, and value-driven product offerings.
However, operating in a vast, and dynamic market like India poses its own challenges, and as the EV industry in the country evolves, and competition intensifies – particularly with legacy players that have deep pockets stepping up their EV assault — staying profitable, and even breaking even — could be a tough task for the newcomers which must balance new investments and scale, and meet customer expectations, to make a mark for their brand.
To deliberate upon these challenges, and opportunities, Autocar Professional and Autodesk partnered to bring a unique conversation, InnerCircle: A CXO Roundtable, to delve into the nuances of the EV industry in India. The two-part series, which was held in Bengaluru on February 20, followed by Pune on February 22, saw some of the most renowned personalities from the Indian EV startup ecosystem come together, and share their learnings, and experiences in overcoming the challenges, and enabling the ecosystem to be better prepared for the future.
In Bengaluru, the panel conceded that the e-mobility transformation in India is particularly redefining the last-mile mobility segment, which has seen a significant emergence of mobility-as-a-service (MaaS) solutions over the course of the last five years.
According to Amit Gupta, Co-founder and CEO, Yulu, “It makes us proud and privileged to be amongst those who are the early adopters of e-mobility in the country. When we started Yulu back in 2017, we wanted to enable mobility for the masses.”
Gupta revealed that the company faced several initial hurdles, pertaining to the design of its low-speed two-wheeler, and encountered quality issues related to parts like the shock absorbers, tyres, chassis, and even the battery pack. “However, we leveraged data and technology, and did a lot of innovation on the product to find the right product-market fit. Seven years later, we are at the knocking doors of hitting profitability at the EBITDA level, likely in the next quarter,” Gupta added.
Ranjita Ravi, Co-founder and CEO, Orxa Energies, the Bengaluru-based electric motorcycle startup which is building high-performance products for riding enthusiasts, said that the growing aspiration of young India is driving demand in the relatively niche segment it operates in. “Succeeding in the EV domain requires engineering a robust technology stack ground-up, and we have developed a full-stack EV solution, which has also been proven in aerospace. That has helped us validate our technology, and make it reliable, and robust, before finally going to market.”
“Fresh thinking, coupled with several transversal and cross-industry skills really help innovating a new product,” Ravi added. Orxa’s competitor and EV motorcycle startup Raptee too aims to completely transform the consumer experience compared to traditional ICE offerings, and says the exercise calls for a completely different approach. “In our case, it includes bringing a high-voltage powertrain,” said Jayapradeep Vasudevan, Chief Business Officer, Raptee EV.
Vasudevan explained that aesthetics, performance, and accessibility are some of the key drivers in the mid-size premium motorcycle segment, and if a company meets these parameters, the chances of success become higher. “However, given that the ecosystem for such an all-electric powertrain has been non-existent in India, there have been significant challenges, calling for vertical integration, and the in-house manufacturing of the smallest components. Except for some mechanical parts, we have designed and developed everything ourselves,” he pointed out.
According to Detlev Reicheneder, Senior Director, Business Strategy Design and Manufacturing, Autodesk, “The big opportunity for startups lies in the product. Compared to the industry incumbents, they have a unique opportunity to change the business models, and several startups are bringing innovative business models to serve the customer in a different way. While traditionally, an OEM seldom has a role to play once the product is sold, a startup can continue to add value to the product over time, and bring insights into its operation.”
“Startups can leverage data to incentivise customers, and therefore, come up with interesting business ideas. While incumbent players have well-established processes, that is where the opportunity for startups lies. Successful startups change the way they design, engineer, and even manufacture products, and apply modern technologies such as cloud, and AI. They must collaborate extremely efficiently, and use tools that enable them to be agile, and flexible,” Reicheneder pointed out.
Functionality, TCO key drivers
As per Nirmal NR, CEO, Three-wheeler business, Greaves Electric Mobility, “Functionality and total cost of ownership (TCO) are the two key parameters that matter the most in the last-mile mobility segment dominated by electric three-wheelers. These vehicles need not be the most good looking, but enable our customers to earn their livelihoods daily.”
“Electric three-wheelers are the low-hanging fruits in the electrification journey, and therefore, 50% of all three-wheelers today in India are already electric,” he added. Amit Singh, Head, New Initiatives, Altigreen Propulsion Labs, said, “While there is a strong acceptance towards electrification, there are some ground challenges, particularly with respect to electricity, swapping, and subsidy. At the end of the day, India’s electrification story is not hinged on subsidy, and the entire ecosystem is coming together to deliver a complete experience to the consumer. This is enabling the transition to take place at a faster pace.”
According to Amit Rao, Head and VP – Strategy, Planning and Marketing, Sun Mobility, “It has been a journey for people to consider battery swapping, and the way Sun Mobility is solving this problem is by virtue of our battery which is interoperable across e-2ws, and e-three-wheelers – both cargo and passenger-carrying vehicles. While this enables us to get more out of the same asset, we end up needing lesser resources for the same vehicle parc.”
Pankaj Sharma, Co-Founder, Log9 Materials, said, “The future certainly looks promising, and while lithium prices have seen a 10x reduction in the last decade, coming from USD 1,000 per kWh to USD 100, India might not be able to leverage the benefits owing to its miniscule consumption. Of the 400GWh cumulative global battery production in CY23, India’s demand comprised only 2GW. Therefore, we are a mere drop in the ocean, and need demand, and scale for the situation to improve. India needs to create what it needs, rather than stand last in the queue,” Sharma explained.
Mohan Raj, Managing Director, Tucker Motors, shared his viewpoint and said, “The government policy with respect to EV charging infrastructure varies from state to state, and must become centralised. While we see good penetration of fast chargers in Kerala and Karnataka, Tamil Nadu, for instance, is far behind. This is an impediment, and the government must give more subsidies for installation of fast chargers.”
Indigenisation creating ecosystem
As EV volumes in India continue to be on the upswing, with total EV sales at more than 1.5 million units, across vehicle categories, contributing to over 6 percent of all vehicle sales in the country in CY23, there is a growing push towards localisation of various EV components, technologies, and services in India. As per Tobias Nowak, Head of Engineering, SEG Automotive, “We started developing a 48V motor for e2w and e-three-wheeler applications five years ago, and have over 125 local suppliers for the housings, and copper windings of our starters, and generators. Barring the PCB chips, and magnets, our products have over 90 percent localisation levels. While it is still cheaper to import these components into India at the current volumes, the localisation aspect acts as a key enabler during initiating talks with our potential customers.”
Dwarka Simili, Head of India Propulsion Engineering Centre, BorgWarner, said,
“While scale is one of the key components to grow our India business, technology is the enabler. As BorgWarner, we are transitioning from being a component supplier to a systems-and-solutions provider, and offering more value to our customers. We must deliver solutions that address our local needs through innovation and technology.” The panel agreed that indigenous product development with a focus on innovation are likely to solve scale, as well as cost challenges, specific to the Indian market.
Need for open, agile design tools
On February 22, the InnerCircle was hosted in Pune, inviting key CXOs representing the most promising EV startups from India’s Western automotive hub. The panellists shared their viewpoints related to the challenges with respect to the EV ecosystem, and according to Krishan Kohli, President and CEO, Kalyani Powertrain, “Fast forwarding innovation to commercialisation is key, and if we look at the EV ecosystem, the biggest challenge presently lies in the supply chain, and how it can be addressed to drive faster adoption across vehicle segments. Unless we get the supply chain streamlined, it would be hard for EVs to achieve price parity with ICE.”
According to Prasad Telikepalli, Co-founder and Group CTO, Matter, “While product lifecycle management (PLM) talks about the vehicle until it comes off the manufacturing end of a traditional OEM, with EVs, the problem extends further to managing the vehicle through its entire lifecycle. Furthermore, the digital thread is not just about systems engineering, but connecting it back to the dealership, aftersales, and service as well. Therefore, the existing PLM tools do not understand the business disruptions or opportunities unfolding with EVs.”
“The engineer-tool relation is highly underestimated when it comes to the faster development process, and since startups must rely on freshers with less experience, a lot of time goes into training of the workforce. Moreover, any forceful deployment of a particular tool leads to inefficiencies and problems at later stages,” stated Aditya Puppala, Co-founder and CTO, Speedloop Auto.
Sumeet Dhar, COO, Electra EV, said, “Contrary to ICE, which took over a century to perfect, e-mobility startups have tried to perfect their technology within a span of less than a decade. While this is primarily because of the democratisation of technology that is enabling companies to develop faster, technology suppliers must focus on reducing the time even further. If a technology company can offer tools deployed in the design of motors, controllers, and battery packs at a democratised price, the scale will go through the roof.”
According to Nilesh Bajaj, CEO, Vayve Mobility, “So far, automotive design tools have been developed to cater to the needs of legacy players, however, new-age companies are not following similar workflows. Therefore, technology suppliers must find ways to make their entry barriers lower, and generate revenues later in the journey, as the startup begins making money, thereby looking at a more collaborative way of revenue sharing.”
Detlev Reicheneder, Senior Director, Business Strategy Design and Manufacturing, Autodesk, acknowledged and said, “Our vision is that data must sit at the centre, regardless of where it comes from. Therefore, companies must have the capability to share and collaborate on the same data, and one must be able to collaborate in an easy and efficient way.”
“Startups happen when there is a gap in the market, and the availability of humongous information allows for the superficial problems getting easily solved, it is the critical ones which require deeper solutions,” said Kapil Shelke, Founder and CEO, Tork Motors, while Chintamani Sardesai, CEO, Nexzu Mobility, added, “There is need for a root-cause analysis on this front.”
Uday Singh, Co-founder and COO, Attron Automotive said, “We also face similar problems, and hiring talent, especially when one is moving towards electronics is tough. Candidates are only versed in skills in a particular software, whereas it takes different tools to carry out different simulations and design workflows. We need to bridge this gap.”
Adopting a community approach
The panel came to a consensus that while a growing industry-academia connect can go a long way in solving the challenges related to design and development, as being faced by early-stage startups, however, introducing more multi-disciplinary tools and adopting a community approach to design, will go a long way in making it a win-win situation for technology suppliers and their customers.
“While there is no simple answer to such complex problems, a potential approach could be in the form of a community, which we believe is extremely important, and helps us gain access to students whenever we are introducing a new technology. There are several student communities working on building race cars, and other projects, and it is astonishing to see students create some extremely innovative products,” said Reicheneder.
Hemant Kabra, Founder and MD, BGauss Electric, conceded and said, “Ensuring easy integration and usability, especially for students coming fresh out of colleges, would enable startups to leverage their resources in the best possible manner without losing time on training.”
Parikshit Kadam, COO, Kabira Mobility, added, “For us to reduce our product development time, the time required to learn a new tool must be cut down as well. The entire process must be simplified and a designer must be able to acquire the necessary skills to use a software within a matter of a few weeks.”
“The way IT services were democratised in India, and led to a rapid influx of the younger generation into the sector, engineering services must also follow the same path. The industry will have to take cognisance of the same,” concluded Sardesai of Nexzu Mobility.
This interview was first published in Autocar Professional’s April 1, 2024 issue.
