Submission BCS
The growth Prospects of the company according to the present and future scenarios of the Market
Submission Date & Time: 2021-10-19 03:51:19
Event Name: NMO S4 Sprint One
Solution Submitted By: Himanshu Parashar
Assignment Taken
Market analysis of electric vehiclesCase Understanding
The new start-up company in its initial stage is looking into venturing into the emerging market of electric vehicles. Since these electric vehicles assure certain enhancements in the environmental conditions, the company has moved in the right direction, where potential profits and future lies. However, setting up a new company with a handful of employees needs an extreme amount of accuracy. Large-scale losses in the initial phase can step towards the downfall of the company. • With the prototype available, design enhancements, USP’s and updating the model regularly on customer demand remains a major technical challenge. • Customer demand forecasting, sales analysis, competitor analysis, each of these segments will involve humongous data and storing, making sense out of it and analyzing the same will remain major tasks in hand. • All these analytics are important as during the initial phase, we can not afford wastage. • Customer feedback and updates will be regular, making it inevitable for us to keep a track of everything. • Also, since this is an entirely new concept, nearest charging stations and service stations data need to be recorded as well as shared with the customers as per their locations and preferences. • As we gradually move towards expanding our services in the coming years, we would require more employees. The challenges involved would increase as the feedback and technologies applied in one kind of vehicle may not apply to our further prototype.BCS Solution Summary
According to a report by Avendus Capital, the electric vehicle (EV) industry in India is predicted to be worth Rs 50,000 crore (US$ 7.09 billion) by 2025, with two- and three-wheelers expected to drive increasing electrification of vehicles in the medium term in the aftermath of COVID-19. By 2024-25, the two-wheeler category is predicted to have a penetration of 9%, and with the proper macroeconomic climate, it may expand to 16%, with the segment reaching Rs 12,000 crore (US$ 1.70 billion) by 2024-25. According to the report, E-rickshaws have become a major market in India in a short period of time, despite the fact that a large portion of the market is still unorganized and uses lead-acid batteries. So, We will analyze the current market scenario and future prospects in India for EV SegmentSolution
The NITI Aayog's 2030 goal for electric mobility in India represents a massive market opportunity. If this ambition is realized, India's EV sector might become a key driver of the country's post-COVID-19 economic recovery. It has the potential to create jobs and economic value along the value chain, including in established industries as well as new ones.
SWOT ANALYSIS MATRIX
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Strengths Characteristics of the business which give it an advantage over its competitors
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Opportunities Elements of the external environment that allow it to formulate and implement strategies to increase profitability
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Weaknesses Characteristics of the business which give it a disadvantage relative its competitors
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Threats Elements of the external environment that could endanger the profitability of the business
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Key Findings
- India's 2030 e-mobility vision (i.e. 70% of all commercial automobiles, 30% of private cars, 40% of buses, and 80% of two-wheeler (2W) and three-wheeler (3W) sales will be electric by 2030) corresponds to 102 million electric vehicles.
- EVs are predicted to account for 43% of total new car sales in the high adoption scenario, which is 10% more than the vision. In the case of a poor adoption scenario, this might drop to 23%, which is 40% below the target.
- OEMs can invest INR 12,39,800 crore (USD 177 billion) in vehicle production, INR 20,600 crore (USD 2.9 billion) in charging infrastructure deployment, INR 85,900 crore (USD 12.3 billion) in battery manufacturing, and INR 14,42,400 crore (USD 206 billion) in revenue from end-consumers through EV sales.
India's electric vehicle ecosystem and investment prospects
- Regardless of the country's lofty goals, India's electric vehicle industry is still in its infancy. However, when viewed from a different perspective, India is the world's greatest unexplored market, particularly in the two-wheeler segment. Under the automatic approach, 100 percent foreign direct investment is permitted in this sector.
- The federal government is also putting a premium on sustainable mobility, as evidenced by recent amendments to the FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India) scheme to make electric two-wheelers more affordable.
- In addition, a number of production-linked incentive schemes are aimed at fostering a local manufacturing ecosystem to aid in the adoption of electric mobility vehicles. This will be accomplished by encouraging new investments in the development of domestic supply chains for essential technology, products, and auto components.
Production-linked incentive schemes
The government announced a Manufacture-Linked Incentive Scheme (PLI) for ACC Battery Storage Manufacturing in May 2021, which will encourage domestic battery production and minimize reliance on imports. This will provide the necessary infrastructure for the EV industry, lowering the cost of EVs dramatically. The PLI Scheme for the auto sector is open to existing automotive companies as well as new investors who are currently not in the automobile or auto component manufacturing business.
India's Electric Vehicle Market: Growth Prospects and Government Policy
Projections
The federal think tank Niti Aayog produced a paper titled "India's Electric Mobility Transformation" in April 2019, estimating that by 2030, EV sales penetration in India will be 70% for commercial vehicles, 30% for private vehicles, 40% for buses, and 80% for two- and three-wheelers. If met, these goals might result in a net reduction of 14 extrajoules of energy and 846 million tonnes of CO2 emissions throughout the lifetime of the deployed cars. Electric vehicles sold until 2030 can save 474 million tonnes of oil equivalent, or US$207.33 billion, over their lifetime.
Policy measures
Federal policy
Several fiscal and non-fiscal measures have been put in place to facilitate the adoption of electric mobility. They are as follows:
NEMMP (National Electric Mobility Mission Plan) 2020: The Department of Heavy Industry (DHI) launched it in 2013 as a roadmap for the speedier development and deployment of electric vehicles in India.
- FAME Phase I: The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME India) Scheme was notified in April 2015 as part of the NEMMP 2020, with the goal of promoting the production of electric and hybrid vehicle technology. Demand development, technological platform, pilot projects, and charging infrastructure have all been prioritized. Incentives for demand generation have primarily taken the form of lower purchasing prices.
- FAME Phase II: This three-year program, which began in 2019, has a budget of US$1.36 billion and will be used to provide upfront incentives on the purchase of electric vehicles as well as promote the construction of charging infrastructure. FICCI has requested that FAME II be extended till 2025, with short-term boost incentives to encourage demand.
- The Ministry of Power has stated that charging electric vehicles is considered a service, hence EV charging stations will not require a license to operate. It has also created a policy on charging infrastructure in order to facilitate the adoption of electric vehicles.
- Green license plates will be awarded to both commercial and private battery-operated vehicles, according to the Ministry of Road Transport and Highways. All battery-operated, ethanol-powered, and methanol-powered transport vehicles will be excluded from the commercial permit requirement, according to the announcement.
- The Department of Science and Technology has issued a grand challenge for the development of Indian Standards for Electric Vehicle Charging Infrastructure.
The Electric Vehicle Industry's Challenges
- Inadequate charging infrastructure: In 2019, India has only 650 charging stations compared to China's 0.3 million. One of the main reasons why customers are hesitant to buy electric vehicles is a lack of charging infrastructure.
- High costs: Along with range anxiety (kms/charge), the current high price of EVs is a big worry among potential customers. Electric cars in the same segment tend to be more expensive than lower-end (internal combustion engine) ICE cars. This is primarily due to the increased expense of the technology used in EVs, which accounts for a significant amount of the cost, leaving little room for other features often seen in luxury vehicles. With improved R&D and market competitiveness, it is envisaged that the pricing element will be rationalized in the future to fit price sensitivity, which is the main factor affecting purchasing in India.
With the latest announcement of incentives, EVs in the two-wheeler market is expected to become more affordable. Since the government's goals have shifted to sustainable, clean electric mobility, industry experts anticipate a similar effort to ease the uptake of other electric vehicles, such as cars and buses, in the near future.
- Customers have a restricted choice of products to pick from because the business is still in its infancy in India. Increased investment in the sector will eventually make it more competitive, resulting in increased demand.
- 4. Lower mileage: Because the company is still in its early stages, there is plenty of space for research and development. In India, electric vehicles are currently not cost-competitive for the ordinary user, as ICE vehicles are more cost effective.
- Higher reliance on imports: One of the issues driving up the cost of EVs in India is the country's reliance on imports of battery and other components.
Conclusion
The availability of financing for original equipment manufacturers, battery makers, and charge station operators, as well as improvements in infrastructure and a diverse range of customer alternatives, will determine the size of India's EV industry. By FY 2030, India's EV aim will necessitate a total annual battery capacity of 158 GWh, presenting substantial investment opportunities for investors. At this point, enabling policy support measures are necessary. This looks to be something that the government is aware of. It has been implementing PLI plans to promote market demand in priority categories such as electric two-wheelers, as well as localising production of critical components such as ACC battery storage, electric cars, and auto components. Moreover, some Indian governments have now implemented EV laws aimed at attracting industry investment and making EV adoption more realistic for the consumer market.Attached File Details
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