EV Adoption Low Despite Buoyant Sales: Windmill Capital

Mobility Outlook Bureau
09 Nov 2022
04:07 PM
1 Min Read

Upfront costs of EVs are usually higher compared to internal combustion engine vehicles and a major barrier to their adoption.

An EV Being Charged

The sale of electric cars (e4ws) surged 268% to 18,142 units in H1FY23 compared to just 4,932 units sold during the same period last year as per a study done by Windmill Capital, a SEBI registered Research Analyst (RA) and a wholly-owned subsidiary of smallcase Technologies.

Cumulative retail sales of electric two-wheelers (e2w) during the first half of FY23 was 277,910 units. The exponential 404% growth is due to a lower base of 55,147 units last year. Monthly e2w sales crossed the 50,000 unit mark for the first time in August 2022, improving further to 68,324 units in October.

High Cost A Barrier

The Centre's support, active participation from the industry and high fuel prices are all positives for the EV industry. The final issue for their adoption is the total cost of ownership (TCO) which is the sum of all costs involved in the purchase, operation, and maintenance of a given asset during its lifetime.

Upfront costs of EVs are usually higher compared to internal combustion engine (ICE) vehicles and this is a major barrier to their adoption in the price-sensitive Indian market. However, one also needs to consider the subsidies related to EV purchase and their lower operating cost. According to  WRI - India, in the two-and three-wheeler segments, EVs are more economical than their ICE counterparts while e4ws are more viable for commercial purposes.

Tata Motors is the clear leader in the e4w space and sold 15,518 units during the first half of FY23, a market share of nearly 86%. The company offers Tiago EV, Tigor EV, and Nexon EV in this space.

Tata Motors plans to introduce 10 new EV models by 2025 while Mahindra & Mahindra will launch five between 2024 and 2026.

E2W Space

The Indian e2w space is a lot more competitive with the top three players commanding over 50% market share. Okinawa Autotech is the leader with 18.8%. The Gurugram-based company has seven EV brands and a 300+ strong dealer network.

Ola Electric, which sells EVs under the S1 brand, holds the second spot with cumulative sales of 44,801 units and a market share of 16.1%. Hero Electric holds the third spot, selling 43,388 units and a 15.6% share.

Greaves Cotton-owned Ampere Vehicles is in 4th place with 13.6 . Hero Motocorp-backed Ather Energy, TVS Motors, and Bajaj Auto are the other major players.

Abhishek Jadon, smallcase manager and VP - Windmill Capital said EVs have got a boost from Centre and and state subsidies. Beyond this, exemption of stamp duty on the purchase of land for EV production, reimbursement of SGST for EV manufacturers, tax exemptions on electric tariff etc have also helped.

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