Ever since India embarked on its electrification journey, there was a flurry of activity among the country’s automakers. Players with a significant market presence began announcing their all-new electric line-up, while ones that were yet to make a launch began accelerating their plans to make the most of the positive market sentiment.
In all of this, the Indian EV space is attracting growing interest from European mobility companies that want to be early movers in this space.
Prajyot Sathe, Research Manager, Mobility Practice at Frost & Sullivan, says the electric vehicle market in India has become one of the most attractive markets for automakers worldwide.
“Sensing the market’s tremendous potential, all the players in the value chain, such as EV manufacturers (of 2 wheelers, passenger cars, and commercial vehicles), battery manufacturers, charging station infrastructure operators, and hardware and component suppliers, are looking at the Indian market as an excellent opportunity,” says Sathe.
“Most of the manufacturers are focusing on leveraging their existing expertise to cater to foreign markets. Although Asian companies heavily invest in the Indian market, European companies focus on establishing component manufacturing rather than electric vehicle sales.”
According to Frost & Sullivan’s research, more than 10,000 passenger EVs were sold in the first half of this year in India – ten times more than were sold in 2020. In 2019, just 4,400 were sold in India.
“The clear leader in the Indian market is Tata Nexon (~4,600 until June), followed by SAIC MG eZS (~1,121 until June),” explains Sathe.
“In 2020, approximately 25,000 units of electric two-wheelers were sold. However, in the first half of 2021, there were close to 30,000 units sold. Such growth indicates the market potential that is attracting market players from around the globe. The opportunity available for localisation will increase as the number of players increases, which will include several foreign companies,” he adds.
A good example of a European company expanding its presence in India’s EV market is French lubricant and electronic battery producer FRVelion. Shortly after establishing operations in the Indian market in 2019, FRVelion entered the EV race through its manufacturing subsidiary, Prevail Electric Mobility.
Speaking to Auto Futures, Hemant Bhatt, Prevail Electric Mobility’s CEO, says: “Our initial plan was to launch our EV in 2023, but on seeing the surge in market growth, we ‘preponed’ our launch to this year.”
“As a result of the subsidies introduced by the Central and State governments, just about anybody is launching their own EV brand. This is the current reality of the Indian market. With fuel prices skyrocketing, and the added benefit of subsidies, more and more Indian customers are choosing to switch from ICE to EVs. While this makes it a very lucrative market, it also means that more and more players want a piece of the pie and this space is being riddled with more and more brands, adding to customer confusion,” adds Bhatt.
A key pillar of Prevail’s product strategy was ensuring that its product could scale different terrains, and this proved to be a boon for the company as it can sell its products in India, Nepal, and Sri Lanka, given the similarities in their market conditions and geographical terrain.
“Our plan was to launch our EV segment, comprising of our full portfolio of two and four-wheelers, in 2023. We have now kept the four-wheelers on hold until 2023 and brought forward the launch of the electric two-wheelers. As the EV segment’s market growth has skyrocketed in the past year, and with both the Central and State governments supporting electrification in every sense now by giving subsidies, we feel now is the best time to launch,” says Bhatt.
“All of our production is happening in India, and we’ll be supplying in Nepal and Sri Lanka from here. We’ve already signed an agreement with our Nepal and Sri Lankan partners. We have already supplied our samples to our Nepalese partner, and these have been tested by them too. On the Sri Lankan front, we’re currently in the testing phase and have supplied our partners with six vehicles for now.”
“India is being considered an EV component manufacturing hub.”
Prevail is very committed to manufacturing its vehicles in India, as well as the Indian market in general. For example, the company has set up base in Haryana state and has manufacturing facilities in Nimrana and Behrampur.
Prevails plants are both churning out 50 units a day, significantly more than most other EV players in India. What’s more, each and every component in its vehicles is manufactured in India – barring the battery.
The company has three models – Wolfury, Finesse, and Elite.
“To start with, we’re planning to launch Elite, our flagship model, for the premium segment. With niche and premium aesthetics, Elite has all those features that the current generation looks for – navigation features, Bluetooth, music connectivity – while also being mindful that this is a price-sensitive market. Moreover, Elite has a swappable battery option. It has two battery stands, which means that when the first one drains out, you can swap it with the other, plug it in and you’re ready to go,” says Bhatt.
Prevail will be launching in the metropolitan cities first, which means that cities like Delhi, Mumbai, Kolkata, Bangalore, Pune, Hyderabad will be targeted in the first phase.
“We will be putting up our assembly unit in Sri Lanka very soon. Within the next year, we will be launching a flagship store in Dubai. From Dubai, we will be supplying to countries like Pakistan and Afghanistan,” he adds.
While FRVelion and Prevail are just two European players looking at making the most of India’s electrification journey, there are a host of other companies also eyeing the Indian market. And, according to Sathe, opportunities are plenty.
“The interest of European automakers in the Indian market is evident due to the existing customer base and their establishment in the passenger car market. Moreover, India is being considered an EV component manufacturing hub due to the presence of several European component suppliers in India. Europe as a region has become the biggest market for electric vehicles (passenger cars).”
“Further analysis of the market development in India indicates that it is following the footsteps of the European market in terms of standards, charging technology (CCS2), battery development (including advanced chemistries such as solid-state), and the overall value chain,” adds Sathe.
India’s EV value chain is expected to reach $4.81 billion in 2025, with batteries leading with $1.8 billion, followed by power electronics ($1.4 billion) and electric motors ($1.2 billion). According to Frost & Sullivan’s analysis, just 30-40% mechanical components and 60% electric components for EVs will be localised.
This represents a significant opportunity for foreign companies to get in early on the Indian market. And, currently, European manufacturers are leading the race.
Keyword: “More Players Want a Piece of The Pie” – European Mobility Leader Eye India’s Electrification Journey