Investors Still Skeptical About Pace Of EV adoption In India

The government needs to bring more coherence to its policies and their implementation as India puts one foot on the paddle in the EV race, according to Koushik Bhattacharya, Avendus Capital

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Investors have a sense of directional conviction about the electric vehicle (EV) space in India, but there still lies an uncertainty around the pace of adoption, according to Koushik Bhattacharya, director and head of industrials at financial advisory firm Avendus Capital.

Speaking to Entrepreneur India, Bhattacharya said investors typically want to put a limited amount of capital into spaces such as these since most of the businesses are at an early stage.

“We are seeing a lot of investors interested in this space,” he said. “However, in terms of people being able to derive confidence and conviction with respect to operating business models...I think there will be a lot of belief that would be built out over the next 12-18 months.”

Related: What Investors Have to Say About The Indian EV Industry

Autocar India in May reported that more than 750,000 EVs were sold in India in fiscal 2019, with a majority of the numbers coming from three wheelers.

Need More Cohesive Implementation

With all the statements that have come out, directionally, the incumbent Indian government has made it clear that they are backing the EV space with all their heart, said Bhattacharya.

In 2017, the government came out with an ambitious statement, saying that it would convert all vehicles in India electric by 2030. The target has since come down from 100 to 30 per cent.

Related: Can Government's Push to Develop Charging Infrastructure Increase Demand For Electric Vehicles?

“I think the idea is to bring coherence to what they say,” Bhattacharya explained.

The government also needs to bring some more implementation friendly policies, according to him.

“When those two things happen, I think a large part of what the government is trying to address...all of those will fall in place,” he said.

Can India Reach Its EV Goal?

“I think the EV goal itself is a moving goalpost,” said Bhattacharya.

If India can achieve anywhere between 20-30 per cent of adoption on the two- and three-wheelers side by 2025, the industry would have done a good job, he said.

What Can the Government Do?

While there needs to be more clarity in policy making, the government needs to play a more proactive role in being a financier, Bhattacharya said.

The government could look to incentivize businesses in the space based on performance, he suggested.

“We will have to think about innovative models,” he added.

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