6 Things EV Founders Should Know About India Market One of the biggest threats today for the EV industry is recurrent fire accidents

Improved charging infrastructure, increased awareness about sustainability, increasing oil prices, technological advancements, innovations by startups, OEMs' participation and government incentives and policies have been driving electric vehicle (EV) adoption in India.

However, many challenges still exist. For instance, one of the biggest threats today for the EV industry is recurrent fire accidents. These incidents have led to hesitation among many consumers who were planning to go for an EV for its promise of cost and sustainability. One such recent incident is an Ola Electric scooter catching fire in a house in a village in southern Kerala's Thiruvananthapuram district last week. The incident occurred at around 3 am on July 19 and an FIR has been filed.

Here are six things Indian founders should remember while navigating the India market.

Indian road conditions and temperatures are different

Akshay Singhal, founder and CEO, Log9 Materials Singhal tells us that when technologies are brought in without any customization, we either see cost issues or performance issues such as the ones we have seen in recent months. "Let's say if you can charge a normal li-ion cell 2000 to 3000 times, that is, you can charge and discharge in its life. But that number of cycles is available at a 25 degree celsius lab condition. The moment you take those cells and put them in vehicles in Indian conditions where typically the average temperature is around 40 degree Celsius, the life is reduced by 50 per cent. That is on the performance or the life expectancy segment. At the same time, higher temperature makes them more prone to safety issues," he says.

Chetan Maini, co-founder and chairman of SUN Mobility also tells us how the company has more than 15,000 EVs running on its battery services, but not even one fire incident. The core of it is the selection of the cells that we use, he says, while adding, "It is also about a very strong validation process. Then, it is also about the software and hardware that we look at the battery management system. We've been working on lithium ions for 17 years, so we have very advanced algorithms."

Further, when the battery goes to the stations, they are cooled down and are made to undergo over 100 checks before the battery is dispensed every single time ensuring it's safe. He also believes that these incidents have come as a wake-up call to the industry, which will ensure that going forward, we have a very robust process and solutions in place.

Besides temperature, there are other unique things about India that founders should take note of.

Standardization of batteries and chargers is a far cry

The lack of standardization for batteries and chargers, particularly in the 4W segment, has created uncertainty and inconvenience for consumers. "Sub-component system technologies such as the battery packs, motor controls and electronics in 4W are complex, unlike those in 2Ws & 3Ws. In addition, they also require a tremendous amount of R&D & capex in manufacturing. Hence, very few startups in India have attempted to build E4Ws. It is the incumbent 4W OEMs that have launched or are in the process of launching the products in the market, however, are slow as they might cannibalize their existing ICE products," said Shoeb Ali, co-founder and managing partner, Transition VC.

Not all segments have high revenue pool and penetration

Electric two-wheelers (E2W) does the maximum revenue today. Out of the overall sale of 5.2 lakh units of EVs, E2Ws were around 3.2 lakh units. "It is due to access to a lot of players, charging infra being easy for 2W (swappable batteries or home charging), price points, access to credit, etc," said Mitesh Shah, co-founder, Inflection Point Ventures.

However, while 2Ws drive volumes, currently the highest EV penetration is in the 3W category across both passenger and cargo vehicles, where EVs have 55 per cent and 35 per cent market share, respectively. "That is not surprising, since the economics for a fleet operator are compelling, and we expect the share of E3Ws to increase further in 2023. Share gains will be seen across form factors e.g. in 2Ws, EVs now make 4.5 per cent of new sales, compared to less than 2 per cent a year ago," said Maheshwari.

Many states have launched EV policies

Many state-level policies continue to boost the EV transition. Around 18 states have finalized EV policies so far. These include Andhra Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharashtra, New Delhi, Tamil Nadu, Telangana, Uttarakhand, Uttar Pradesh, Goa, Gujarat, Meghalaya, Assam, West Bengal, Odisha, and Rajasthan.

According to news reports in May this year, the Delhi government has so far achieved 86% of the targets it had mentioned in its Electric Vehicles Policy 2020.I n the order issued by the UP government, all the departments and institutions working under them have been instructed to convert 100 per cent of vehicles into EVs by 2030 as per the EV policy.

The challenge of range anxiety persists

Range anxiety caused by a lack of charging infrastructure and power outages has been India's most significant barrier to widespread EV adoption. According to a recent study, India needs at least 20 lakh public charging stations across the country by 2030 to achieve the government's target of EV adoption, that is, 30 per cent penetration in private cars, 70 per cent in commercial vehicles, and 80 per cent in 2Ws and 3Ws by 2030.

Innovative business models have an edge

As the market for EVs grows, more business models may see an uptick and we may also see many more startups coming into play into the existing models.

"Platform Sales for EV will emerge as a large market, with new OEMs emerging they have the product expertise and price competitiveness but lack the distribution network like the legacy players. Thus these new OEMs would need a specialized sales channel for delivery and push sales of their products over the legacy competitors," said Brijesh Damodaran, co-founder and Chief Investment Officer, Auxano Capital.

Experts predict a similar shift in the after-sales service market as well." With the reducing no. of components in a vehicle, the requirement for after-sales service will reduce thus managing exclusive centers may be rendered unviable and multi-brand expertise can help," he added. In addition to this, many more startups are expected to scale their research and development in 2023 to come up with indigenous solutions to the issue of range anxiety and those are expected to raise funding.