Leaders and surprising laggards in India’s EV space

In this article, we look at the size of the gap that exists between some of the most well-known original equipment manufacturers in the industry.

The strong momentum around India’s e-mobility transition has thrown up some surprises in terms of which of the country’s automakers are doing the most to adapt, and which ones are still dragging their feet. India’s EV sales are led by electric two and three wheelers, with electric cars also gathering a loyal base of customers. In this story, we examine just how big the gap is amongst some of the most prominent OEMs.

Electric two-wheelers dominated by start-ups, leaving legacy players behind

62% of India’s EV sales in the first quarter of 2023 came from electric two-wheelers, and Ola Electric, Okinawa Autotech and Hero Electric together accounted for just under 50% of the market by the end of 2022. This is both encouraging and concerning at the same time. With their individual market shares of 17.57% (Ola) and 16.47% (Okinawa), just two of India’s two-wheeler manufacturers (that are not even legacy OEMs but startups) today account for 34% of the country’s electric two wheeler sales.

Table 1: Market shares of India’s top e-two wheeler manufacturers 2022

Hero Electric is an offshoot of Hero Motors, which along with Bajaj (India’s best-known two wheeler manufacturer) and TVS Motors (India’s third largest two wheeler manufacturer), are India’s best-established two wheeler OEMs. Their motorcycles have a presence across 70–80 countries. For them to individually account for a mere 15.75%, 4.02% and 7.51% of the market share (respectively) highlights that at least Bajaj and TVS Motors have not invested enough funds and technical resources to adapt to India’s pretty apparent appetite for electric two wheelers.

On the other hand, Ola Electric’s manufacturing plant in Pochampalli, Tamil Nadu only went operational in August 2021 and its much-awaited product, the S1, logged over 100,000 bookings within the first 24 hours — an astounding sales record. Okinawa’s products have been available since 2015 and it has never been a brand that has relied on mass advertising. And yet today, they are India’s top electric two wheeler retailers.

Three other OEMs of note are Ather Energy, Pure Energy and Revolt IntelliCorp.

Ather’s first product, the 450X, was opened for bookings in 2020 and had sold 35,439 units by October 2022. The 450X is incredibly popular — the base model retails at around Rs. 172,000 (ex-showroom) — because of its appealing design and build quality, the 1,000+ fast charging points that its owners can access across India, and Ather’s subscription model that slashes the upfront payment cost and lets a user ride the 450X for as little as Rs. 999/month. This shows a high level of innovation on Ather’s part in terms of offering a quality product, but also in terms of making it affordable for customers to own or use the 450X across almost every income bracket. Likewise, Pure Energy’s eTryst350 (priced at Rs. 149,999) and Revolt’s rv400 (Rs. 125,000) are popular amongst the slightly higher-end motorcycle customer because of the products’ quality and value proposition.

This clearly indicates that there is a customer for practically all electric two wheeler price brackets, provided that the product offers adequate driving range and is reasonably well-built. It is thus surprising that both Bajaj and TVS Motors lag so far behind in this category despite the 123 years of cumulative product development expertise between the two. Bajaj sold 281,486 2Ws in India in December 2022 and exported 1.6 million units in FY22-23, while TVS sold 3.5 million 2Ws domestically in 2022 and exported more than 1 million units. Bajaj has three manufacturing plants across the country while TVS has four.

Their e2W market share is therefore not about a lack of access to a team of product developers, engineers and sales personnel, but possibly because each is waiting for the Indian e-mobility market to mature further before diversifying its product lineup. Unfortunately this stance means that India is losing out on a lot of progress around the electric two wheeler ecosystem (such as more charging points, more quality battery chemistries and more innovation in e-two wheeler ownership models), even though with their technical and sales expertise, both Bajaj and TVS could outsell the top performers. Table 2 highlights where India’s 2W manufacturers stand with respect to their EV commitments.

Table 2: EV sales and targets for India’s ICE 2W manufacturers

Electric three-wheelers

India’s electric three-wheeler market is being spearheaded by cargo vehicles, which is great news for goods and cargo businesses aiming for zero-emissions deliveries. Also Uttar Pradesh leads the country in e-rickshaw sales (403,411 units registered so far, followed by 117,885 in Delhi), and e-rickshaws are a vital component of electric last-mile connectivity.

Additionally, the e-three wheeler category sold a total of 404,143 units in FY2023, which was an impressive year-on-year growth of 118%.

The contrast around leaders and laggards in this segment is a lot less pronounced. In January 2023, the top three market shares were held by Mahindra (8.61%), YC Electric Vehicles (6.91%) and Saera Electric Auto (5.05%). The electric 3W is a rather niche space that traditionally has had much fewer OEMs than for two wheelers and car manufacturers, but it is witnessing the entry of a lot of new players on the back of the enormous growth potential for this segment. Bajaj, for instance, was supposed to debut its first e-three wheeler in April 2023, and as when the product is launched, it will inevitably drive its competitors to launch improved versions of their own offerings within a few quarters.

Table 3: EV sales and targets for India’s ICE 3W manufacturers

Electric cars

Electric cars make up less than 5% of India’s total EV sales at the moment. However, Tata Motors, with its Tigor EV and Nexon EV, commands 86% of the market share for e-cars. The Nexon EV is in fact India’s largest selling electric car and it sold more than 35,000 units so far. A distant second is MG’s ZS EV (9% of the market share) and Hyundai’s Kona EV at 1.6%. Unfortunately, most of India’s electric car sales are coming from foreign manufacturers (with the exception of Tata), that have set up shop in the country and are bringing in EVs that have been tried and tested in other markets.

The most surprising aspect for the sector is how despite being India’s most popular automaker, Maruti Suzuki is yet to launch a single EV for its customers. It sold 1.65 million cars in FY22-23 domestically but its only electric offering — the all-electric eVX SUV — is set to debut in 2024. Although, the carmaker has announced that it will launch an EV model every year from 2024 to 2030. Also, Toyota Motors, arguably the world’s largest automaker, has been dragging its feet with regards to EVs in the Indian market. This may be related to its global strategy where its CEO has insisted that Toyota will focus on building a hydrogen economy and cars that run on hydrogen fuel cells.

Yet, both the manufacturers are known for their reliability, re-sale value and the wide network of after-sales services available to their customers, so for them to not have released EV models sooner is a loss for the Indian customer. Maruti also exports 2.5 million of its cars to around 100 countries. Out of the regions it exports to, Chile wants to go fully-electric by 2050, and Kenya, Ghana, South Africa, Rwanda and Namibia have all outlined their individual EV targets. So it would be advantageous for Maruti to have its own lineup of electric cars ready for export, unless it wants to lose out to Chinese units.

On the other hand, the first mover advantage has paid off well for Tata Motors, which has done well to tailor the Nexon and the Tigor EVs to the Indian market both in terms of the cars’ specifications and prices. It has captured over 85% of the market share for India’s electric cars, which for any single manufacturer is unheard of. Tata was also one of the two OEMs — the other being Mahindra — to have developed an electric car in response to EESL’s tender for government electric cars in 2017. The cars were reported to have had issues with their actual driving range, but the Nexon and Tigor’s current ranges of 312 kms and 315 kms on a single charge indicate that the issue has been addressed in earnest.

Clearly, therefore, Indians want to buy electric cars and Maruti and Toyota are missing out on this customer base for reasons that are known only to them. The same goes for Royal Enfield and Suzuki for e2Ws. The brands enjoy a strong following — the former commands a premium on its range of motorcycles — and could rapidly transition to the electric powertrain if their managers and engineers so decided. India is proving with every passing month that it welcomes EVs, so it’s only what the automakers decide with their offerings that will determine their share of the EV market.

The article was first published by cleanmobilityshift.com.

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Aniruddha Bhattacharjee

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