With Rising Demand, Tech Advancements, Govt Push in ’22, EV Firms Are Raring to Go in ’23

To circumvent the impact of increasing oil import bills, Indian government’s policy initiatives over the last couple of years has accelerated the adoption of e-mobility.

As per the Ministry of Heavy Industries estimates, in 2022, 7.47 lakh EVs were sold under the FAME-II Scheme, as compared to 2.37 Lakh sold in FY2021-22. Faster Adoption and Manufacturing of Electric Vehicles’ phase two (FAME-II), which was initially intended for three years ending March 31, 2022, was extended in 2021 by 24 months until March 31, 2024. Road Transport and Highways Minister, Shri Nitin Gadkari outlined that more than 18 Lakh electric vehicles were registered in the country. This number is expected to grow by almost three times to 50 lakh units by 2030.

The demand for EV has risen substantially, thanks to attractive economics and push by the government.

According to reports by RevFin Services – a financial technology (FinTech) digital lending platform focused on increasing EV adoption has stated that the industry is set to grow to USD 150 billion by 2030. EV firms unanimously agree that the repo industry is set to grow to USD 150 billion by 2030. The industry bigwigs reflect on the year gone by, and seem bullish about what lies ahead for e-mobility.

Gaurav Gupta, Chief Commercial Officer, MG Motor India, summarised the growth in EVs and the connected car technologies that pushed a perfectly packaged mobility platform as he said, “The shift towards electrified vehicles and advancements in technology, artificial intelligence, and the Internet of Things has enabled manufacturers to offer ‘Connected and Autonomous Vehicles’. Although the journey of connected vehicles has recently begun, with the 5G in place, new points of interface will emerge and offer new opportunities for the fast-emerging ecosystem of innovators. Such has been the advancement in technology applications that EV owners can now understand and view the battery percentage and charging stations from the comfort of their homes.”

The EV sector is always at the forefront when it comes to technology and innovation. MG Motor India, for instance, introduced India’s first SUV with internet inside – Hector, followed by what is touted as India’s first Pure Electric internet SUV – ZS EV and India’s first Autonomous (Level 1) premium SUV – Gloster. Add to the list India’s first SUV with personal AI assistant and Autonomous (Level 2) – Astor.

Private equity (PE) and venture capital (VC) investors have invested $982 million in the EV industry, as per Venture Intelligence data.

HOP Electric is a Jaipur-based electric two-wheeler manufacturer with a comprehensive ecosystem approach to electric vehicles business. Ketan Mehta, Founder & CEO, HOP Electric Mobility also envisions a brighter future for EV industry with rising levels of awareness among consumers, “Investing in EV mobility is becoming the go-to choice in India, especially because people are consciously making eco-friendly and sustainable choices.”

Against such a backdrop, the Government’s ambitious initiative worth INR 26,058 crore under Production Linked Incentive (PLI) Scheme for Auto under the New Non-Automotive Investor (OEM) category could facilitate the country’s manufacturing capacities in an unprecedented way, he believes. “Under this mandate, we will be investing more than INR 2000 crore in India in the next five years to boost HOP Electric’s chances of becoming a global energy mobility pioneer,” Ketan Mehta reveals further.

The sector sure seems to be capitalising on the favourable climate for EV. Finance seems to be particularly hot at the moment. Among many others, HOP Electric is a case in point, “We closed a strategic round of $2.6 million as part of an on-going $10 million pre-series fundraise, a morale booster for the entire HOP family. In year 2022, we have put in place a network of over 150 retail touchpoints, called ‘HOP Experience Centres’. We plan to cover 30% of India by next year.”

Revfin Services had recently raised Series-A round of funding worth $10mn in a combination of equity and debt. Revfin focuses on increasing electric vehicles’ adoption for under-banked & underserved.

Other firms, such as Lohum Cleantech, which is a climate technology business working on strategies on making the switch to battery power, are of the view that the domestic supply chain will receive an impetus. Rajat Verma, CEO & Founder, Lohum, says, “The outlook on the EV sector is positive, and we will be seeing growth in scale and quality simultaneously. Last year we saw a significant level of growth which is set to continue due to more efficient technologies, comprehensive EPR and BWMR implementation, and the continual growth of EV charging infrastructure. As India’s potential cell production capacity becomes clearer, the Fame-2 scheme receives extension, and circular economy policies take shape, we will see a pathway open up to indigenize the supply chain with efforts from leaders who have a clear mission backed by the relevant credentials.”

Capgrid Solutions, an end-to-end source-to-deliver company for the low complexity direct material spend focused on the automotive and EV industry, has set new goals for this year. Dheeraj Tiwari, Co-Founder and CEO of Capgrid Solutions shares, “2022 was the year of 0-1 journey for CapGrid and we are looking to go from 1-10 in 2023. We are already working with 2W (EV and ICE), 3W (EV and ICE), Tractor and Agri equipment and Heavy construction equipment manufacturers and looking to expand to serve Passenger and commercial vehicle manufacturers in 2023. We are having active conversations with leading players in the industry. CapGrid is targeting 30-50X growth of monthly revenue run rate in 2023.

Sameer Aggarwal, the Founder and Chief Executive Officer, Revfin sums up the sentiment running across the EC sector upon the close of 2022, “The year witnessed an optimistic evolution of EVs with the strong push from the government and the excitement towards EVs is growing not only in the private sector but also among the consumers across all cities. With the support from the Government of India and its policies, the electric three-wheeler transport category has emerged as the leader in terms of EV registrations, with 9.2 Lakh EVs registered. With the increasing pollution and initiatives by the central and state government in terms of battery safety, charging infrastructure and EVs, the Indian EV market, valued at $3.21 billion in 2022, is expected to grow to $113.99 billion by 2029, at a compound annual growth rate of 66.52%, according to a Fortune Business Insights report.”

“India has great potential to not only electrify its vehicles but also to become the world’s leading EV manufacturer, creating a significant amount of employment opportunities and boosting the GDP. The most critical challenge in this journey has been the lack of financing options for commercial drivers. In the coming years, EV financing will be the most important enabler of EV adoption,” concludes Sameer Aggarwal.