During January-November 2023 the total electric vehicle (EV) sales in India have been 1.38 million (Jan-Nov 2022 sales 924,000 units) of which about 783,000 units (567,000 units) were two wheelers and about 595,000 units (357,000 units) were three and four wheelers combined.

“So not only was there a 50% rise in EV sales from 2022 to 2023, there has been a 38% increase in EV two-wheeler sales alone. This significant rise has been despite the reduction in FAME. Customers are leading towards the overall value being provided by EVs in terms of running costs and features,” Narayanan told IANS.

In an interview he also talks about the head and tailwinds that the sector is expected to experience in 2024. Excerpts:

IANS: On the headwinds to be faced by the EV sector- regulatory, technology and market in 2024.

Ravi: In 2024 FAME subsidy is likely to end. While this may cause a temporary reduction in sales, it should not cause a long-term reduction. We already saw this when FAME reduced from 40% to 15%, there was a dip in temporary sales but within five months the industry went back to monthly volumes in line with the pre-reduction.

When the industry was able to withstand such a large drop in subsidy, it should be able to sustain another reduction from 15% to 0%.

One major regulatory headwind to address is battery swapping. Many countries allow battery swapping and it has been successfully deployed. In India, we have been working on battery swapping regulation for nearly two years now without any outcome.

With battery swapping, customers can be freed from the inherent inconvenience of EVs – which is the time it takes to charge them. Even with fast charging, the time taken to refuel is multiple times of petrol vehicles.

Battery swapping is the only way to ensure 100% adoption of EVs over time. Without this, customers will hesitate to take an EV for long distance drives where the availability of charging points and the time taken to recharge are both a major inconvenience.

IANS: On the tailwinds that would push the EV penetration in the country.

Ravi: 2023 saw reduction in many commodity prices and easing of global supply chains from COVID time issues. For example, cell prices have come down by over 20%, semiconductor lead times have come down significantly. This will flow down into EV products and help reduce prices/scale up supply more reliably.

IANS: Are EVs going to be subsidy driven

Ravi: I hope that 2024 is the year that EVs can come out of being a subsidy driven industry. It’s about time – the crutches have to come off. Supply chain localisation has been successfully achieved by many companies.

For example, 100% of BNCs Tier 1 suppliers are domestic and 90% of the parts by value are from within Tamil Nadu state. Once localisation is achieved, we can push for cost reduction and become more cost-efficient.

If we continue to subsidise the market, Indian companies will not make sufficient efforts into being cost competitive and therefore will not be globally competitive. Companies have to be under pressure to reduce costs to survive if we hope to win against Chinese and other products in the global market.

IANS: Do you see traditional vehicle makers gaining solid ground as against the newer players? TVS and Bajaj are increasing their market share. They have the nationwide service network.

Ravi: Yes these companies have tremendous incumbent advantage. They have huge distribution networks, trusted brand names, established supply base, and access to copious amounts of capital. But they lack the speed, the mindset, and honestly – the innovation of startups.

BNC is able to build products 2-3 times faster and over ten times more capital efficiently compared to others. We have significantly vertically integrated and make battery, motor, electronics, chassis and other parts in-house.

The component IP (intellectual property) we have built is likely more than many of these incumbent OEMs (original equipment manufacturers/vehicle makers) and these components provide more value to customers and at a lower cost.

Before our fifth anniversary in 2024, we will have at least three completely home grown EV products in the market which will offer specifications and capabilities equal to or better than ICE equivalents at prices equal to them.

Our pace of innovation is unmatched -- now we just need to translate this into commercial results. 2024 is going to be a breakout year for BNC -- watch out.

(Venkatachari Jagannathan can be reached at v.jagannathan@ians.in)