A sharp rise in the number of electric vehicles (EV) start-ups registered in India over the past few years is threatening to disrupt the traditional business model of large established players if they refuse to switch to EV mobility soon, warned Amitabh Kant, CEO of Niti Aayog.
Kant, who was speaking at the 61st Annual Session of the Automotive Component Manufacturers Association (ACMA) added that the EV disruption is led by start-ups and they could capture a significant market of the EV space.
“The domestic manufacturers of vehicles must realise that we are in the midst of one of the biggest transitions that are going to take place. EV will become inevitable whether you like it or not. And therefore, the Indian manufacturers must read the writing on the wall and capture the lead of disruptive changes,” Kant said in his address.
A number of privately funded start-ups have sprung up over the last 4-5 years in the two and three-wheeler electric vehicle segment. Start-ups like Ola Electric, Ampere Vehicles, Euler Motors, Okinawa, Ather Energy to name a few have already launched EVs in the market.
On the other hand, established players like Hero MotoCorp, Honda Motorcycle and Scooter India, Suzuki, Royal Enfield, Mahindra Two Wheelers, and Yamaha are yet to launch their electric two-wheelers. Bajaj Auto and TVS Motor Company who have launched electric two-wheelers are yet to launch electric three-wheelers.
“It is important for me to say this. The number of start-ups registered for EV is exponentially growing. If established players do not move towards EVs you will see start-ups disrupting all of you and move forward; capturing a very large segment of the market. Therefore, the challenge for established players to become the drivers of this disruption,” Kant added.
While some established companies are yet to roll out their first EV, start-ups have set up mega factories that can churn out an EV every 2 seconds. The Rs 2,400 crore Ola Electric factory has a peak capacity to produce 10 million two-wheelers a year. Ather has set up a new factory having a capacity of 100,000 units annually. Hero Electric, the country’s largest electric two-wheeler maker, is planning to expand its capacity to 1 million units.To be sure, Hero MotoCorp will launch its first electric vehicle in the March quarter of FY22. Bajaj Auto and TVS are also keen to launch more EVs in the near future.