Low Battery Warning: Will EV Startups Survive in India?

The path for Indian EV startups has been uncertain, marked by changing FAME-II subsidies & recent penalties imposed on a few startups. These developments have raised concerns about the future of EV startups in India.

Sonu Vivek
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The global EV sector has witnessed a remarkable rise, with major car brands embracing the electric wave and producing exceptional EV vehicles. Beyond cars, the industry has expanded to include EV bikes, EV scooters, EV cycles, and more. Among the pioneering brands, Tesla stands out as the global flagbearer of EV cars. The meeting of Indian Prime Minister Modi with Elon Musk fuelled talks of Tesla coming to India and has been gaining momentum ever since.

Despite the global success of EVs, the Indian EV sector is still striving to flourish and thrive. Several key players like Ola Electric, Hero Electric, Ather, Okinawa, Ampere, Raptee, Revolt, etc., are actively manufacturing EV two-wheelers, while Hyundai, TATA, Kia, MG Motors, and others are continually introducing new EV cars to the market.

However, the path for Indian EV startups has been uncertain, marked by changing FAME-II subsidies and recent penalties imposed on some startups. These developments have raised concerns about the future prospects of EV companies in India. The high upfront cost of EVs, particularly the expensive battery component, absence of EV charging stations, etc. has been a major obstacle for the EV sector. This article delves into the future of EVs in India, examining the hurdles they face and exploring potential solutions.

Piling Up of EV Vehicles

The lack of charging infrastructure and FAME II policy controversies have resulted in an inventory buildup of unsold EV vehicles. This situation not only affects manufacturers financially but also hampers the industry's overall growth. To overcome this challenge, it is essential to address the root causes – improving charging infrastructure and streamlining policy implementation.

The EV Charging Conundrum

One of the primary obstacles hindering the mass adoption of EVs in India is the scarcity of charging stations. While urban areas have witnessed some progress in charging infrastructure, rural regions still face a severe lack of charging facilities. This scarcity results in "range anxiety" among consumers, deterring them from considering EVs, especially for long journeys.

To address this issue, the government must invest in a widespread network of charging stations across the country. Collaborating with private businesses and integrating charging stations with existing fuel stations can help improve accessibility and ease consumers' transition to electric mobility.

Will EV Prices Go Down?

The question on everyone's mind is whether EV prices will go down in the near future. While there is no straightforward answer, several factors influence EV prices. One of the main cost components of EVs is the battery. As battery technology improves and production scales up, we can expect to see a gradual reduction in battery prices. Additionally, government incentives and subsidies aimed at promoting EV adoption can also contribute to lowering prices.

Will Electric Cars Get Cheaper?

Electric cars have the potential to become more affordable in the coming years. As the demand for EVs increases, manufacturers are likely to invest in research and development, leading to improved efficiencies in production processes. Furthermore, advancements in battery technology and increased competition in the market can also contribute to lower costs for electric cars.

Will Electric Vehicles Succeed in India?

The success of electric vehicles in India depends on addressing some critical challenges. As mentioned earlier, the lack of a robust charging infrastructure remains a significant impediment to the widespread adoption of EVs. To succeed, the government, in partnership with private players, must establish a comprehensive network of charging stations across the country. Additionally, targeted awareness campaigns and incentives for consumers can help create a positive shift in perception toward EVs.

FAME II Policy Controversy

The Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme was introduced to boost the adoption of EVs in India. However, the FAME II policy has been embroiled in controversy, primarily due to issues related to localization norms. The recent directive to major homegrown players to refund subsidies has raised concerns among potential EV buyers, casting doubt on the industry's reliability.



"While there has been some drop in industry volumes in June'23 due to the reduction in Fame-II subsidy, most of the companies are preparing well for a scenario without subsidies, by focusing on new technology and rider experience. This approach is going to be a sustainable one in terms of the long-term perspective, particularly when we have huge ambitions to achieve by 2030. Also, the fact that there is lots of R&D happening in the EV space and lots of companies planning to launch their products reiterates the fact that the EV industry is all set for the long run, and what we see now are the initial challenges that would be overcome. We are completely optimistic about the future of the EV industry and the way it is going to help for a sustainable world," mentioned Mr. Jayapradeep Vasudevan, Chief Business Officer, Raptee. 

The Road Ahead for EV Startups: Challenges and Solutions

Challenge 1: Charging Infrastructure

Establishing a robust charging infrastructure is crucial for accelerating EV adoption in India. The government, in collaboration with private players, must invest in creating an extensive network of charging stations. Incentivizing private businesses to set up charging stations and integrating them with existing fuel stations can significantly improve accessibility and convenience for consumers.

Challenge 2: FAME II Policy Reforms

To build trust in the EV industry, the government must address the controversies surrounding the FAME II policy. Stricter enforcement of localization norms and transparent communication with manufacturers can help instill confidence among all stakeholders. Ensuring effective utilization of subsidies can further boost the credibility of the FAME II scheme and its impact on the EV market.

The future of EVs in India holds great promise, given the growing environmental consciousness and potential economic benefits they offer. However, to realize this promise, the challenges of charging infrastructure and policy implementation must be effectively addressed. With proactive measures and collaboration between the government and industry players, India can emerge as a significant player in the global EV market, contributing to a greener and more sustainable future. The success of EV startups in India will depend on their ability to navigate these challenges and embrace innovative solutions for the greater good.