Submission BCS
Considering development, government policies, environmental concerns response to new technologies and economics, the market of electric vehicles technology will rise. However, its current growth will
Submission Date & Time: 2021-10-19 02:18:58
Event Name: NMO S4 Sprint One
Solution Submitted By: Krishnapriya Nair
Assignment Taken
Market analysis of electric vehicles and Proposal for fund raisingCase Understanding
Problems faced by the business: - 1. Financial constraints There is a restriction on the budget that can be spent on production, marketing activities, human resource. Operations and supply chain. Majority of the capital raised by self and high interest rates on loan The market growth currently is minuscule and sceptical owing to various challenges and uncertainties faced by the industry. 2. Human Resource Development With limited finances, and considering safety and advanced technology involved, development of certified skilled technician and professionals is one of the challenges. Employee retention and talent acquisition for specific expertise roles are another problem. 3. Infrastructure Constraint Infrastructure required for warehousing, assembling, manufacturing, research, and development is of concern with the limited budget available. Number of charging stations also pose as a major challenge for our business. operations 4. Marketing and Promotional Activities There is no mention of any budget or strategy for marketing activities since it is important for creating awareness about our product and communicating the benefits. 5. Logistics and Distribution Apart from the logistics and distribution cost involved, there is a greater need for network development and increased remote dealerships to achieve more sales.BCS Solution Summary
INDUSTRY DESCRIPTION: - Electric vehicle market size is valued at USD 171.35 billion in 2020 and is expected to reach a value of USD 726.14 billion by 2026 at a CAGR of 27.19% during the forecast period 2021-2026. The automotive Manufacturers have been driven to supply electric Zero Emission vehicles due to rising demand for low-emission and governments encouragement towards long-range, zero-emission vehicles via subsidies and tax refunds which is estimated to boost the electric vehicle market size. Market Players and Brands in India Few players are there in the market who has launched their EV in the market, however, XEVs (EV/HEV and PHEV) are available but at a very high price. a) EV Mahindra Reva – e2o – 4.99 lakhs (Now e20 plus is available in the market – INR 7.46 lakhs) EVerito – INR 9.22 lakhs b) Hybrid BMW i8 – INR 2.62 Cr. Lexus ES 300h – INR 55.27 lakhs Toyota Prius – INR 45.23 lakhs Honda Accord Hybrid – INR 37.35 lakhs Toyota Camry – INR 37.22 lakhs Maruti Suzuki Ciaz Diesel – INR 8.23 lakhs (recently launched in 2017) Maruti Suzuki Ertiga Diesel – INR 7.55 lakhs (recently launched in 2017 Market Players and Brands in India Few players are there in the market who has launched their EV in the market, however, XEVs (EV/HEV and PHEV) are available but at a very high price. a) EV Mahindra Reva – e2o – 4.99 lakhs (Now e20 plus is available in the market – INR 7.46 lakhs) EVerito – INR 9.22 lakhs b) Hybrid BMW i8 – INR 2.62 Cr. Lexus ES 300h – INR 55.27 lakhs Toyota Prius – INR 45.23 lakhs Honda Accord Hybrid – INR 37.35 lakhs Toyota Camry – INR 37.22 lakhs Maruti Suzuki Ciaz Diesel – INR 8.23 lakhs (recently launched in 2017) Maruti Suzuki Ertiga Diesel – INR 7.55 lakhs (recently launched in 2017 Market Players and Brands in India Few players are there in the market who has launched their EV in the market, however, XEVs (EV/HEV and PHEV) are available but at a very high price. a) EV Mahindra Reva – e2o – 4.99 lakhs (Now e20 plus is available in the market – INR 7.46 lakhs) EVerito – INR 9.22 lakhs b) Hybrid BMW i8 – INR 2.62 Cr. Lexus ES 300h – INR 55.27 lakhs Toyota Prius – INR 45.23 lakhs Honda Accord Hybrid – INR 37.35 lakhs Toyota Camry – INR 37.22 lakhs Maruti Suzuki Ciaz Diesel – INR 8.23 lakhs (recently launched in 2017) Maruti Suzuki Ertiga Diesel – INR 7.55 lakhs (recently launched in 2017 MARKET PLAYERS AND BRANDS: - Few players are there in the market who has launched their EV in the market, however, XEVs (EV/HEV and PHEV) are available but at a very high price. a) EV Mahindra Reva – e2o – 4.99 lakhs (Now e20 plus is available in the market – INR 7.46 lakhs) EVerito – INR 9.22 lakhs b) Hybrid BMW i8 – INR 2.62 Cr. Lexus ES 300h – INR 55.27 lakhs Toyota Prius – INR 45.23 lakhs Honda Accord Hybrid – INR 37.35 lakhs Toyota Camry – INR 37.22 lakhs Maruti Suzuki Ciaz Diesel – INRSolution
Solution: -
Key Market Trends Impacting Growth: -
- Reduced EV battery price
- Battery Management Systems
- Smart Charging
- Wireless on-the-go charging
- Connected cars
Electric Vehicle Market Drivers
- Increase in demand for fuel-efficient and low emission vehicles - Since the early 2000, India’s crude oil imports have risen exponentially reaching a record high of 4.3mb/d in 2016. The demand for oil grew by 5.1% in 2016, higher than the world’s largest net importers, the US (0.7%) and China (2.9%), making India the world’s third largest crude oil consumer1. India’s crude oil deficits stood at US$52 billion in 2017 and accounted for almost 50% of the total trade deficit of US$109 billion. This crude oil deficit is further expected to almost double to US$100 billion against the total trade deficit of US$202 billion in 2019
·Initiatives by the government to promote electric vehicles
·Rising pollution levels – an environmental challenge - India ranks as the third largest carbon emitting country in the world accounting for 6% of the global carbon dioxide emissions from fuel combustion3. According to the WHO Global Air Pollution Database (2018), 14 out of the 20 most polluted cities of the world are in India.
·Rising population – a sustainable mobility challenge - India’s current population of 1.2 billion is expected to reach 1.5 billion by 2030. Out of the 1.5 billion people, 40% of the population is expected to live in urban areas compared to 34% of 2018 population projection. The additional 6% population growth is likely to further add strain on the struggling urban infrastructure in the country, including a rise in demand for sustainable mobility solutions.
Probable Strategies: -
1.Promotional Strategies: - Following could be the strategies on how advertisements or promotional activities be focused on.
·Good for the environment/Lowers Emission
·Less Life Cycle Cost
·Cheaper to run/Improve Fuel Economy
·Smooth acceleration and deceleration
·Quieter than conventional vehicles
2.Infrastructure Strategies: - Warehouses and locations could be leased on rent in the initial years of operations and instead of production assembling could be done. Location of production or assembly can be chosen as the one where EV demand is rising and there are enough charging stations.
3.Price Point: - The nascent concept of battery swapping is an area in which India's EV infrastructure trends differ from those of more affluent nations. The battery is among the most expensive elements of any electric vehicle, with the cost increasing significantly as storage capacity grows. Affordability means that two and three-wheeled vehicles account for 80 percent of India's domestic vehicle sales. To ensure electrification of this vital fleet does not make two and three-wheeled vehicles prohibitively expensive, the government is seeking to encourage the sale of vehicles with smaller, and cheaper, batteries; while ensuring users have sufficient range by allowing them to swap low batteries for fully charged ones en-route. The network of battery swapping stations, like those for EV charging stations, is anticipated to develop several business models.
Challenges faced by EV Industry: -
·Insufficient charging infrastructure
·Insufficient standardization of EV charging infrastructure
·Limited options and higher dependency on imports
·Grid challenges
·Lack of service centres
The purchase price of EV is higher than for gasoline cars in India, which can be made comparable with a subsidy of government. However, running cost of EV is far less than ICE vehicle.
The sector is in a nascent stage in India. There are very few options available in India in general, with Hyundai, Mercedes, and MG among a handful of companies selling electric cars there. India's biggest car maker Maruti Suzuki has yet to enter the space.
Tesla, the world's largest electric vehicle manufacturer, is also eyeing India and set up a local subsidiary earlier this year.
Collective investment done by e2W, e4W, EV component makers, electric commercial vehicles was recorded at INR 25045 crores during Jan-July 2021.
EV component makers recorded a total investment of 19% by companies like C4V, Lo hum, Ruchira Green Earth and Sona Comstar. The US-based C4V, a leading company in the lithium-ion cell manufacturing sector invested 16% of the total investment.
This change in trend could be attributed to the growth potential it offers to its investors from a long-term perspective along with the change in consumer behaviour as people prefer their own vehicles over shared mobility, an aftermath of the pandemic, increasing popularity of E2Ws due to the performance and futuristic features (such as IoT connectivity) they offer and growing awareness among the younger generation.
Big players entering the market like Hero, TVS, Bajaj, and Ola give a lot of confidence to investors.
Favourable Government Initiatives: - The Indian government is eager to grow the sector, particularly as it seeks to fulfil its promise of reducing its carbon footprint under the Paris climate agreement and given that the country has some of the world's most polluted cities. These efforts include launching a $3.5bn incentive scheme last month.
Conclusion
Ultimately, the scope of India’s EV market growth rests on availability of capital for original equipment manufacturers, battery manufacturers, and charge point operators as well as improvements to infrastructure and diversified options for consumers. several Indian states have now passed EV policies intending to attract industry investments and make EV adoption more viable proposition for the consumer market.Attached File Details
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