India’s automotive sector is one of the largest in the world. India is the world’s 4th largest car manufacturer and largest 2 & 3 wheeler manufacturer. Here’s a quick look at export numbers:
> In FY 2019-20, over 6.77 lakh cars were exported from India.
> During the same period, over 35 lakh two wheelers were exported
> More than 5 lakh three wheelers were also exported during this period.
|Vehicle Type||Exports FY 19-20 (source)||Domestic sales FY 19-20||Remarks|
|Passenger Cars||6,77,311||27,73,575||Exports to about 175 countries. Germany leads with around 40 lakh cars exported around the world.|
|Three wheelers||5,02,169||6,36,569||India is the largest 3W manufacturer in the world.|
|Two wheelers||35,20,376||1,74,17,616||India ranks 4th in terms of highest dollar value worth of two wheeler exports. Motorcycles worth $2.1 billion were exported from India in 2018-19 with a 6.8% share of the global exports. China ranked first with 25.9% share worth US $7.7 billion. Source|
When it comes to electric vehicles, can the vehicles manufactured in India gain a foothold in the export market?
China is home to the world’s largest EV market.
A report notes that China is sitting on 40 million units of auto production capacity. With domestic demand running about half that level, state-owned automakers are ramping up exports.
According to an analysis by a website that tracks China’s motor industry, China exported more than 14 million electric 2Ws in 2019 at a dollar value of $2.8 billion USD. Tesla has managed to start exports to Europe from its Shanghai facility in 10 months since it was opened as the first Tesla plant outside of the US. Chinese EV manufacturers are also expanding overseas, and as this Oilnprice article notes – China exercises control over a large part of the global EV supply chain ranging from battery metals sourcing, critical mineral processing to battery manufacturing. China’s dominance in the chemical production of battery-grade raw materials stands at 80% of total global production. In 2019, 61% for cathodes, 86% of all anodes (natural and synthetic graphite) were produced in China while 100% of all natural graphite anode was made in China. Of the 136 lithium-ion battery plants in the pipeline to 2029, 101 are based in China. [Source: Benchmark Mineral Intelligence]. When it comes to electric car exports, numbers from 2019 show that the US led the market with over 30% share.
We collected industry leaders’ thoughts to understand what kind of opportunity lies in pursuing EV and EV component exports for the Indian manufacturers and what would it take for India to become an export hub for electric vehicles.
Electric Vehicle Exports and EV Component Exports
Dr Deb Mukherji – MD at Omega Seiki Mobility believes that rapid transition from ICE to alternate fuel vehicles largely dominated by battery technology, is an excellent opportunity for India to become a global hub of EV manufacturing, something which did not happen with IC engine vehicles. Their company has been receiving enquiries for its electric L5 3Ws from countries like the UK, Greece, France, Sub Saharan African countries and Latin American countries like Peru & Panama.
There are e-mobility related export opportunities in two areas: Vehicle Exports and Component Exports.
“In the vehicle category, I see export opportunities in low-end formats of 2 and 3 wheelers which India already dominates with ICE vehicles. We are also in an advanced stage of discussion for local manufacturing of our EVs in the Latin American region. In the components category, I see huge opportunities in India becoming a global sourcing destination in powertrain and electronics. The ecosystem already exists in these technologies – motors, electrical accessories, drive lines and electronics”, says Dr Mukherji.
Dr Mukherji also notes that modern vehicles need a huge amount of IT architecture as integration with embedded software is the key to new generation EVs. Indian IT workforce has the experience of working for the global OEMs from their India engineering centres, that can be leveraged to work on newly evolving EVs, designing in-wheel motors, controllers and electronics for Electric cars.
Exporting electric 3Ws
Bajaj Auto is the biggest Indian exporter of ICE 2Ws and 3Ws. In FY 2019-20, it exported 47 per cent of its production. In the EV category, the company launched e-Chetak last year. Although Bajaj has not launched an electric 3W in India yet, a company official shared that they are planning to export electric 3Ws starting Jan 2021 in response to the demand from overseas markets.
One of the pioneers of EV manufacturing in India, Hyderabad based GMW has started to export its e-3W Taskman SmartAuto to Europe earlier this year. Although traditional three-wheelers are used in the EU/UK for specific use cases such as tourism, exhibitions, campuses etc, GMW has started to sell both passenger and loader autos in these markets.
We caught up with COO Sri Harsha Bavirisetty to find more about their export experience so far:
1. How is the EU certification for your vehicle segment different compared to getting a homologation certificate in India?
The process is more or less the same. We have designed and developed the vehicle taking market requirements into consideration. The market has become environmentally conscious and choosy in terms of quality, reliability, durability and features of vehicles. The weather conditions, speeds, transmission systems, design, visual appearance and several other such aspects are completely different from India. Continuous design and development efforts enabled us to quickly make necessary upgradations to the vehicle to suit EU requirements.
2. What kind of market potential do you see for GMW electric 3Ws in Europe?
In the EU market, the current logistics solutions for hyper-local deliveries primarily consist of LCVs and ICVs. Many firms have been testing and trying smaller vehicles such as eCargo bikes and drone deliveries, but there is no proven model yet. At the same time, Europe has emerged as the second-largest electric vehicle market in the world. The market share of electric cars in Europe increased from 6.8% to 7.2% after the quarter of COVID lockdown, even as overall sales of vehicles of all types plunged during the second quarter.
With a clear need for small vehicles in the delivery segment and increase in demand for electric vehicles in the EU, we are perfectly placed to create and capture the last-mile delivery market in the EU/UK. Our conversations with logistics firms are going very positive, we will soon start the pilots in the last-mile delivery segment.
3. What are the current use cases of GMW e-autos in the EU/UK market?
We are exporting both passenger and loader e-autos. Passenger e-autos are being used for the same tourism and exhibition purposes. COVID-19 has caused a steep increase in eCommerce penetration globally. Since this trend is not visible among the offline retail players, businesses in the UK and EU have started to use our vehicles as food trucks and stores-on-wheels to reach their customers directly. This has created a unique environment to expand our footprint in both last-mile logistics and food truck segments.
Exporting Electric Bicycles
Partha Choudhary – President and CEO at Hero Lectro shares that overall India’s EV export is minimal at present and cannot be scaled without indigenous capability in tech and manufacturing. In India, Hero Lectro holds 80% share of the e-bike market and has also made strides in Europe through the acquisition of e-bike companies in Germany and the UK.
Europe is already a big e-bicycle market; more than 3 million e-bikes were sold in Europe in 2019. Here, e-bikes cost from anywhere between 2,500 Euros to 4,500 Euros depending on the brand, components and specifications – a price point that can be economically matched in India. However, the European e-bike market is currently heavily biased towards branded components (e.g. Bosch motors, Panasonic cells, Shimano gears etc.), and using these components can ramp up the price significantly negating the cost savings of making in India. The winning strategy is to design and develop high-quality components indigenously to ensure reliability and also realise the potential cost efficiency of making in India. Hero Lectro aspires to push the envelope via its own designs and tech rather than relying on importing off the shelf components for its bicycles from China.
E-bikes offer a functional improvement over regular push cycles and are also free from the range anxiety that comes with other segments of EVs, as one can always paddle home. Hero Lectro is hopeful that the Indian e-bike market will also pick up with increasing awareness about the environment, health benefits and effectiveness of e-bike solutions for the everyday short distance commutes.
To create a strong foothold in the EV export market, we understand the following pointers need timely attention from the Indias EV industry:
– Development of indigenous technology and manufacturing capability for powertrain components including motors and power electronics components to control quality and bring in cost efficiencies in the long run.
– The Government needs to pitch in with supportive policies especially for battery manufacturing to realise the vision of a fully Atmanirbhar India where India makes products not only for domestic but global markets without depending on foreign imports.
Cover image source: englishelectricmotorco.com
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