New Age Start-up Electric 2-Wheeler Brands’ disruptive launches to watch-out for in 2022
The automotive industry is going through a transitionary phase switching to alternative and less energy-intensive options of mobility, in a bid to reduce the environmental impact. Countries have been increasing their commitment to a greater reduction in greenhouse gas emissions following the 26th Conference of Parties meeting (CoP 26) to the United Nations. More than 120 countries, accounting for about 52% of the global emissions have announced new Nationally Determined Contributions (NDC).
Government Initiatives
Increasing oil import bills as well as international commitments to combat global climate change are among key factors driving the Indian government’s recent policy initiatives to speed up the transition to e-mobility. The 2-Wheeler segment of Electric Vehicles (EVs), which has seen maximum adoption, driven by Start-Ups such as Hero Motocorp backed Ather Energy, Ola Electric, Okinawa AutoTech, Revolt Intellicorp, among others have got the due regulatory support by the Indian Government to accelerate EV adoption in the country. The segment is well incentivized with the rollout of various subsidies. The Department of Heavy Industries, in its updated ‘Faster Adoption and Manufacturing of Hybrid and Electric vehicles (FAME-II) scheme’ offers 50% higher incentives on two-wheeler EVs. The new incentives for two-wheelers include Rs. 15,000 per kWh of battery capacity, up to 40% of the vehicle cost. Moreover, recently, a production-linked incentive scheme for the auto sector was approved by the Cabinet to boost the manufacturing of electric vehicles. Such progressive policy initiatives will prove to be a catalyst for the start-ups in the sector, which is still in its nascent stage.
Growth Indicators
According to estimates by RevFin Services – a financial technology (FinTech) digital lending platform focussed at increasing EVs' adoption for under-banked & underserved, “EV financing will become the biggest enabler for EV adoption in the next few years. Attractive economics and push by governments has already increased the demand for EVs substantially, and the industry is set to grow to USD 150 billion by 2030. “Commercial EV segment, expected to be a key growth vertical is faced with lack of financing options, hence remains the biggest challenge in this journey,” as per the study.
The Centre for Energy Finance at Council on Energy, Environment and Water at Centre for Energy Finance (CEEW-CEF) shows that the 57,043 registrations recorded during April to September 2021 for high-speed EV have surpassed total registrations recorded in FY21 (40,837 units).
Further, the electric two-wheeler (e-2W) industry is expected to grow at a compounded annual growth rate (CAGR) of 75-80% over FY22-FY25. This would result in e-2Ws contributing 7-10% of the overall 2W sales by FY25 from contributing below 1% as of FY21, according to India Ratings & Research (Ind-Ra) study. New model launches over the next few years with better specifications and performance of e-scooters at par with ICE vehicles are entering this space.
