In May 2023, electric two-wheeler registrations crossed the 1 Lakh mark for the first time, even though the government slashed subsidies under its FAME II scheme
From manufacturing at scale to providing easier ownership options, Indian EV makers are taking many initiatives to accelerate the adoption of EVs in the country, says Mehta
Hop Electric will invest more than INR 2,000 Cr over the next five years to build new products and charging infrastructure
Governments and businesses around the world are stepping up their efforts to promote electric vehicles (EVs) to reduce transport-related emissions and combat climate change, and India is no exception. The country has made significant strides in EV adoption, particularly in the two-wheeler segment.
In May 2023, electric two-wheeler registrations crossed the 1 Lakh mark for the first time, despite the government’s decision to slash subsidies under its FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme.
Although some saw this move as a blow to the EV industry, many opined that it would hardly derail the government’s ambitious plan to make 80% of the country’s two and three-wheelers electric by 2030.
While the country is investing heavily in EV infrastructure, including charging stations and battery swapping stations, private players, too, have boosted their endeavour to innovate and ramp up R&D in the space so that these vehicles could be made more affordable for the masses.
However, there is a dire need for the government and private players to be on the same page for the larger good of the country and the world at large.
According to the cofounder and CEO of EV manufacturer HOP Electric Mobility, Ketan Mehta, the active collaboration between policymakers and private players has the potential to put the country’s EV industry and adoption on a high-growth trajectory.
However, the CEO believes that the government has done its bit by providing the necessary launch-pad to private players, and it’s time for the industry to gradually reduce its reliance on government subsidies.
Founded by engineers Mehta, Nikhil Bhatia and Rahil Gupta in 2019, the Jaipur-based startup manufactures electric two-wheelers (motorcycles and scooters).
In an interaction with Inc42, Mehta talked about the growth drivers, challenges the future outlook of India’s EV market.
Here are the edited excerpts
Inc42: Tell us how EV makers, like yourself, are helping the government achieve its target to electrify all two-wheelers by 2030.
Ketan Mehta: In line with the government’s push for sustainable mobility, prominent EV players are actively engaged in developing in-house technologies, conducting R&D to improve EV performance and exploring technologies that enhance the vehicle experience with applications like AI, IoT and telematics.
EV players are also working towards establishing an extensive network of charging infrastructure across the country, which happens to be one of the most significant challenges for the EV industry.
At HOP, we are developing a first-of-its-kind decentralised network of smart batteries, home chargers and charging & swapping stations called the HOP Infinity Energy Network. We have already launched a pilot with five swapping stations and 50 batteries in Jaipur and are now aiming to expand to more cities and states.
I believe that collaborative efforts are nurturing the growth of the domestic EV industry and will definitely contribute towards India’s sustainable future.
Inc42: The FAME II subsidy cut has garnered mixed responses, with some arguing that it could make EVs more expensive for consumers. What are your thoughts on this?
Ketan Mehta: From price-sensitive customers to mid-segment and luxury aspirants, all types of consumers are becoming increasingly aware of the benefits of owning an EV.
I feel the government has done its bit by providing the necessary launch-pad to private players, and it’s time that we gradually reduce our reliance on subsidies.
Consumers don’t buy a vehicle just for the sake of commuting. They look for new-age features such as biometric-recognition systems and other solutions that enhance their driving experience. Hence, a well-packaged product that offers sustainability and performance is a must to hold the interest of potential customers.
Right-value products for the masses will definitely shape the EV segment going forward. From manufacturing at scale to providing easier ownership options, we are taking many initiatives to accelerate the adoption of EVs.
Inc42: Speaking of price-sensitive customers, what initiatives are EV stakeholders taking to ensure affordability? Tell us how this could unlock India’s EV potential.
Ketan Mehta: There is a remarkable transformation in the lending space and financial institutions now weigh environmental factors into their decision making.
This allows them to offer special rates to individuals purchasing EVs, thus encouraging the adoption of sustainable transportation. So, you can say that easy financing options have become the catalyst for the cause.
Meanwhile, OEMs can make vehicles more affordable by pricing them competitively and developing them with specific target audiences in mind. It’s a well-known fact that EVs are costlier than ICE (internal combustion engine) vehicles as the battery cost increases the price of vehicles.
In such a scenario, offering a Battery-as-a-Service option sweetens the deal! This helps separate the battery cost from the vehicle purchase price and customers pay a fee depending on the usage of batteries.
Inc42: One of the biggest challenges for the domestic EV industry is its over-dependence on the imports of EV cells. How can indigenous EV battery manufacturing fuel EV adoption in such a scenario?
Ketan Mehta: The vision of ‘Atmanirbhar Bharat’ aims at self-reliance across sectors and the country seems to be on the right track.
In July this year, India joined the coveted Mineral Security Partnership (MSP), a US-led collaboration of 14 countries, which is aimed at catalysing public and private investments in critical mineral supply chains. Interestingly, India is the only developing nation among the 14 nations under MSP. This gives us some strategic advantage in securing crucial resources to increase the production of indigenous EVs.
Further, the recent discovery of lithium reserves in Rajasthan’s Degana, after Jammu & Kashmir, will only strengthen India’s position in the EV market.
I think the commitment towards localising the EV supply chain is vital if we want to achieve self-reliance. Both public and private sectors should focus on developing a robust ecosystem of domestic suppliers for raw materials, components and spare parts used in EV manufacturing. This move will curtail dependence on overseas sourcing, strengthen local manufacturing and enhance India’s self-sufficiency in the EV space.
Inc42: Do you think that the growing demand for sustainable mobility is driving investment in EV startups?
Ketan Mehta: In an era where connected, digital and sustainable mobility is the need of the hour, there is a need for investment and a conducive regulatory framework.
According to the Economic Survey 2022-23, the domestic EV market is expected to touch 1 Cr units in annual sales by 2030. Such aspirational numbers require capital for vehicle production and charging infrastructure.
In terms of institutional funding, the EV startup ecosystem raised a record $1.66 Bn in funding in 2022, up 117% YoY. And this is just the tip of the iceberg! I am confident that the sector will continue to attract investor interest with the same spirit.
Last year, we closed a strategic round of $2.6 Mn, as part of our ongoing $10 Mn pre-Series A fundraiser. Our strategic investor, a listed company, has previously supported us in becoming a successful mandate holder of the government’s ambitious Production Linked Incentive (PLI) scheme. We remain committed to investing more than INR 2,000 Cr in new products and charging infrastructure over the next five years.
Inc42: Could you shed some light on how you are utilising these funds? Also, tell us how you are creating a holistic EV network to boost EV adoption.
Ketan Mehta: We have taken a platform-based approach to our product development strategy. We are working on four platforms and will be launching 12 new products on these platforms in the next five years.
- Platform Nimbus: This is a utility-based platform to develop vehicles in both B2B and B2C spaces. These vehicles will be equipped with multi-battery architecture swap support and we are targeting Indian and African markets with these vehicles
- Platform Alpha: This is a B2B-focussed platform for B2B applications, such as hyperlocal deliveries, food deliveries and last-mile deliveries, in the ecommerce sector.
- Entry-Level Scooter Platform: We are designing scooters for new or first-time buyers (typically those who are looking for affordable and easy-to-use modes of personal transportation).
- Platform OXO: Through this platform, we will be launching different motorcycles both in the commuter and sports segments.