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India could potentially be on the cusp of an EV boom, especially in the two-wheeler market. EV Update talks to Murali Krishna, founder of the leading EV web portal EVHUB.IN, about how the Indian market is shaping up.

EV Update: In general, how is the market for EV looking? Is it still in its early stages?

Murali Krishna: Although the sales are growing consistently, the electric bike market in India is still in its early stages. Almost every company is importing e-bike parts in CKD (completely knocked down) format, then assembling and selling them in local markets. But some big brands are working towards indigenous projects for developing parts in India. EV business owners are optimistic about EV market and investing hugely.

EV Update: Who are the domestic leaders in Indian EV bike and car manufacturing?

Murali Krishna: REVA is the pioneer in electric car category. Tata and Mahindra are developing electric vehicles but not yet commercialised. There are some small players in this segment who are yet to prove their existence in this market. In terms of two-wheelers, there are more than 125 electric bike companies in India as of now. No one of them leads this segment yet. That said, big players like Hero electric, Yo bikes, BSA motors, Ampere vehicles, Ultra motors are investing hugely on R&D, product quality and after sales service to capture the market share. The company that gives that best after sales service will become the market leader.

EV Update: Is the focus entirely on EV bikes, or are EV cars getting a look in as well?

Murali Krishna: The EV bike business is definitely leading the way in India. Indian two-wheeler brands like Hero and TVS are already in this business and now Yamaha is planning to enter into the Indian e-two wheeler market as well. Low speed electric two wheelers are most popular in India as licences and registration are not mandatory, and two-wheelers provide a smooth and safe drive as well.

Though [Indian automaker] REVA has been in the EV car market for the last ten years, its production is mostly for export to European countries. Mahindra’s acquisition of REVA has emphasised the importance of electric vehicles. All Indian four-wheeler leaders like Tata, Mahindra are working in EV development for their existing models, such as the Nano and Maximo. As electric vehicles have a drive range constraint, Indian users are still not motivated to use EV four-wheelers. Heavier battery replacement costs also act as a disincentive for consumers. Comparatively, two-wheelers are doing well due to the affordable costs – especially since the introduction of a government subsidy.

EV Update: What incentives is the government offering? And are there other government plans to help stimulate the EV market?

Murali Krishna: The Indian Government is providing INR 95 Crores (INR 950 million, or $21 million) for battery-operated vehicles subsidy. It is also providing R&D support in electric vehicles as part of the 11th five-year plan. But government still needs to increase the contribution so that full-fledged R&D can be done and develop indigenous electric vehicles in India.

A 20 percent subsidy is given on the ex-factory price for electric vehicle manufacturers. This reduces the cost on each electric bike by around INR 4,000 ($89) and around INR 100,000 ($2,238) for electric cars. The government has committed to subsidise 20,000 units of low speed electric two-wheelers and another 10,000 units of high speed two-wheelers during this financial year. In 2011-12, the number is set to increase to 80,000 units for low speed bikes and 20,000 units for high speed e-bikes.

The incentives are applicable to all electric vehicle manufacturers that have registered with SMEV [Society of Manufacturers of Electric Vehicles]. To register with SMEV, the manufacturer should have at least 30 percent indigenous content in their vehicles and should have significant retail and after sales operations.

EV Update: How would you describe consumer interest in India for EVs?

Murali Krishna: Despite frustration due to the fuel price hikes, consumers are not enthusiastic to buy an EV due to its low drive range, battery replacement cost and poor after sale service. This is because the parts are being imported and it adds to the cost and delivery time. Electric bike customers are mostly those who are fascinated by this new technology. As enthusiasts, they want to experiment.

EV Update: What are you predictions for the EV market over the next five years?

Murali Krishna: Over the next five years, India’s electric vehicle business will reflect the existing Chinese EV market. Currently there are more than 400,000 e-bikes on Indian roads, with a significant number being added every year. In coming years, we can expect many electric vehicle component manufacturers locally to support OEMs [Original Equipment Manufacturer], thereby reducing the product price and gaining better control over quality and lead time.

EV Update: Other than financial incentives, how could EV uptake in India be stimulated?

Murali Krishna: There are plenty of steps that could be taken. At an infrastructure level, electric bike lanes should be built to reduce interference with general traffic. Charging outlets should also be set up in shopping malls and market places, with credit card and smart card payments. Petrol based vehicles could also be banned from city centers.

From a research and development perspective, it is imperative to develop low-cost/high-performance battery technology, electric motors and other components locally. Also, vehicles should be developed for rural markets, which require extra mileage, weight carrying capacity and rough road reliability, among other factors.

In terms of government reforms, it would of course be helpful to increase the subsidies and incentives on various electric vehicle projects and products. The Government could also reform electric vehicle standards for Indian conditions by bringing all EV industry experts onto a single platform. Lastly, it would be good to introduce tax exemptions for imported components until the local market picks up.

Source: evupdate.com