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Metropolis Desk-
The assembly line at a new facility in Hosur, a city in southern India close to Bangalore, is bustling with lightning-fast activity.
Every 90 seconds, employees in black uniforms produce a brand-new electric scooter as management assesses the company’s soaring sales.
Two-wheelers are moving at electric-powered speeds, according to Tarun Mehta. Mehta, 33, is the CEO of Ather Energy, a producer of electric scooters that has recently experienced a surge in demand.
According to him, the business was selling 200 units monthly three years ago. It now easily sells 15,000 copies every month.
Mehta told CNN that revenues were “soaring.”
This is what India’s massive personal car market, which is expected to grow to be a $100 billion sector by 2030, looks like when it electrifies it. In the nation with the largest population, two- and three-wheelers predominate, outnumbering other forms of transportation like cars by a factor of nearly four.
Walking down a street in Bangalore or New Delhi suffices as evidence. In many busy roadways, electric mopeds that cost as little as $1,000 are already common. Environmentalists and the government promote them as a way to reduce some of the poisonous smog that frequently engulfs major cities across the nation.
In the previous three years, registrations for these vehicles have increased by more than 10 times nationwide. Many vibrant rickshaws in the Indian capital that were originally propelled by human pedaling now move people about the city using batteries.
Established firms have made significant investments to electrify their products, including Hero MotoCorp, the largest two-wheeler manufacturer in the world.
India is attempting to become more environmentally friendly, to have electric vehicles (EVs) account for 80% of two- and three-wheeler sales by the end of the decade and a third of all private automobile sales by that time. The nation aspires to serve as an example for other developing countries by doing this.
But to get there, experts say several big hurdles stand in the way, including bringing down prices and improving infrastructure.
“Over the last three years, a significant amount of momentum has been brought into the market,” said Brajesh Chhibber, a partner at McKinsey who also serves as co-chair of the company’s think tank on India’s future mobility. According to him, there were one million electric vehicles sold last year, up from “an almost negligible number of units three years ago.”
“What a leap,” you say. Strong state backing has propelled the movement, especially through a program called “FAME,” or the Faster Adoption and Manufacturing of Electric Vehicles.
The program, which began in 2019, is investing more than 100 billion rupees (about $1.2 billion) in EV consumer subsidies and establishing thousands of EV charging stations throughout the nation.
The recent wave of adoption has been greatly influenced by subsidies.
For instance, Bain estimates that after accounting for federal and state subsidies, the price of a high-speed two-wheeler in Delhi may now only be 15% to 20% higher than its diesel-powered equivalent, as opposed to up to 30% otherwise. That has contributed to encouraging many customers to switch.
Ather, which sees the transition as nothing short of a “revolution,” is one of dozens of startups benefiting. It joins at least 55 other EV manufacturers that have sprung up to meet demand, according to government data.
India, however, is just getting started. Despite hitting a milestone, the 1 million units sold last year is a mere drop in the bucket compared to “India’s total two- and three-wheeler fleet stock of 250 million — leaving immense room for sustained growth,” according to the World Economic Forum (WEF).
Because public transport is relatively underdeveloped, these types of vehicles — scooters, motorcycles, and rickshaws — are hugely important, accounting for a staggering 80% of all vehicle sales.
The trend gives the country a leg up as it shifts to EVs because such vehicles are typically used more for daily short commutes versus long-distance drives, according to experts.
In a report published in December of last year, Bain predicted that two- and three-wheelers would be “the vanguards for EV adoption,” in part due to customers’ potential lack of range concern and increased reliance on “the adequacy of home charging.”
Early adoption by delivery and logistics firms, who are drawn to the cheaper operating costs of switching to electric and efforts to reduce their carbon footprints, is another motivating driver.
E-commerce behemoth Flipkart and meal delivery juggernaut Zomato are two examples of businesses that have already committed to using only EVs as of 2030, according to Bain.
However, analysts claim that three primary problems still exist despite the publicity and promotion.
India’s charging infrastructure lags behind other countries as well. According to a July statement from the Ministry of Heavy Industries, authorities are striving to remedy this by establishing new charging networks in 68 cities across 25 states as well as dozens of motorways or expressways.
However, India is one of the largest countries in the world, with thousands of cities, 28 states, and several undeveloped, sprawling rural areas.
This indicates that there is still more work and funding to be done in the nation. In a research published in November, the WEF estimated that $285 billion would be required to fully electrify India’s two- and three-wheeler markets.
The absence of charging facilities, according to BluSmart CEO Anmol Singh Jaggi, is his “biggest hurdle.” BluSmart is an Indian ride-sharing firm with an all-electric fleet.
Although we have created some very large super hubs, he said to CNN, “We still feel deeply constrained by the presence of large-scale charging infrastructure.” “I believe the government should take additional action in this area, beyond just financial incentives.”
And despite hefty subsidies, some buyers are still unconvinced about EVs.
More education is required, according to experts, as consumers raise concerns about the safety, dependability, and worth of battery-powered automobiles. Some customers think this model’s pricing is still too exorbitant.
Chhibber claimed that more time was needed for individuals to realize the financial advantages of switching to electricity, such as fuel or maintenance cost savings.
Two-wheeler manufacturers claim that, given India’s relatively high fuel prices, buying an electric scooter or motorcycle can result in savings of more than a year compared to operating a car with a combustion engine.
The purchase of electric vehicles is still somewhat hesitant, according to Chhibber. “Overall, the equation will balance out in the future as battery prices decline and vehicle manufacturers achieve scale.”
Both officials and business owners concur. The owner of a fleet of over 4,000 vehicles, Jaggi, claimed he has long been optimistic about forecasts “that the cost of batteries will continue to drop, and the efficiency of the batteries will continue to rise.”
Many young entrepreneurs like us would have possibilities thanks to it, he claimed. “This is an opportunity that comes along once in a century.”
Source- CNN Business
