The EV industry in India is completely messed up!!

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1. With the Gensol saga unfolding and BluSmart services halting, I’ve been reflecting on the challenges facing India’s EV startup ecosystem.

Particularly in the EV 2 Wheelers space , the poster boys are already navigating significant turbulence.

Ola, once the biggest player in the nascent market, has seen its market share decline due to reasons well known to public. Ola's share price is down >65% from its all time high since its IPO last year in August.

Funding crunch and the overall market downturn have worsened the conditions for the second biggest player - Ather Energy, which is substantially backed by Hero. Its valuation for IPO filings has been on a continous downfall from ~$ 2.5 bn to less than ~$1.5 Bn now.

Also last year, following subsidy cuts, many companies were forced to slash prices to maintain demand.

What's common across both BluSmart and EV 2 Wheelers is the continued strong foothold of traditional biggies.

In EV 2 Wheelers space - Bajaj, TVS and Hero have taken over the lead and rapidly expanding their market share shrinking the startups presence in the space.

Success in the 2-wheeler EV segment depends heavily on distribution networks, product longevity, and after-sales service — something traditional players are better positioned to offer (quite apparent from Ola's case).

In Blusmart's case,  there's speculation that it could become a fleet partner of Uber, the largest player in the market.

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2. A similar trend seems to be shaping up for the EV 4-wheelers segment as well. 

Here, traditional players are more vulnerable, here technology advancement takes on front seat. Upcoming competition from global players like - Tesla, Byd, Vinfast etc. will make a huge hit on the Indian auto companies, which in recent years have done no to little innovation (comparatively). 

And the global players are coming in with their swords pulled out, let's see till when the govt. defend the industry, and if they will make any real innovations.

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3. Battery - is the single most expensive component in electric vehicles.

Contributing >40% of the total cost in a vehicle.

"India imports almost its entire requirement of Li-ion batteries." - TOI

Yes, whole of the EV ecosystem in India is run on imported batteries, with >75% being imported from none other than CHINA.

However, there’s some good news. This scenario is expected to improve soon with favourable government policies in place.

"CareEdge Ratings expects India's import dependency to decline to 20 per cent by FY27, despite significant growth in demand due to large-scale integrated capacities being built for Li-ion battery storage." - TOI

The EV landscape is facing turbulances, but it will eventually be navigated, the question is by whom and how? What do you think?

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