Overview of EVs

June 2020

Author – Narayanan
Krishnamurthy
Topics covered

1 NKs Introduction

2 EV technology Slice and Dice across product applications & regions

3 Global EV trends & challenges

4 Global 2W market snap shot and India volumes

5 ICE Vs Electric 2W – Technology difference and unit economics (Rs/Kg)

6 Challenges and innovation in India

7 Way forward and point to ponder on before investment

linkedin.com/in/narayanan-krishnamurthy-01396246
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Place holder
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Narayanan Krishnamurthy
Ola Electric Mobility
Ex Hero Moto Corp,, Nissan , TVS, Tata Motors,
Tata Aerospace
Total experience – 22+ Years
Industries worked in – 17+ @ Automobile / EV ,
5+ @Aerospace
Married and currently based out of Bengaluru,
where I am living with my family.
email – narayanan.k@olaelectric.in
Mobile - 08187034484
• Sourcing , Strategy & Supply chain in all verticals /
Career commodities at various companies & capacities
• Worked in all mobility OEM’s of 2W/3W/4W & Aerospace
& Industry leaders / giants
• 14+ years only worked on New Product Sourcing
• Started with Quality background & shifted to Supplier
development & then to Commercials & contracts]
• Core member during establishment of Joint venture by
Sikorsky , Lokheed Marteen & Boeing with Tata’s
• What made me shift career from ICE to EV Start up…
ICE to EV • To work for Green Energy company with portfolio of 2W/
shifts 3W & 4W.
• Start up companies are much faster in Risk taking &
Execution.
• India will be one of the Global manufacturing Hub for
EV manufacturing.
• Learnings from all mobility vertical will be helpful to
adopt in Start up New energy company..
EV technologies slice and dice across product applications & regions Prevalent
technology

BEV PHEV HEV NOT Available

Product
Application Electricity Petrol & Electricity Petrol & Electricity
(Pure Electric) (External charging can (External charging
be done) NOT available)
US, Germany, Norway,
China

Prevalent in developed countries Higher per capita income

A/B/C/D/E segment Cars
and better charging infra

Relevant to India
2Ws
Relevant Better affordability, cost
to India economics and
utilization for first/ last
mile needs

3Ws

2W and 3W to power India’s electric mobility revolution...quite opposite to global trends

4
Global EV Sales | BEV and PHEV | Cars

A/B/C/D/E segment Cars

China
1.2 Mn

Global EV Sales are approaching a tipping point & OEMs’ EV model pipeline is fuller than ever before.
However EV related consumer concerns appear to be a blockage in the funnel, keeping purchase level still low globally.
Source : McKinsey’s e-mobility research and Team Analysis 5
More consumers are considering EVs, but not as many are buying

A/B/C/D/E segment Cars

McKinsey’s e-mobility research – 12000+ consumers,

4 countries, Light Vehicles, BEV and PHEVs

Norway
(586) 3 1 2

Germany
(2331)

China
(2341)

USA
(7103)
2 1 3

Concerns regarding battery/charging, driving range, and higher costs compared to ICE vehicles – and prevent a large-
scale consumer pull for EVs
Source : McKinsey’s e-mobility research and Team Analysis
India is the largest 2W market in the world

India 19 Mn

China ~15 Mn

Indonesia 6.5 Mn

Vietnam 3.5 Mn

Thailand 1.8 Mn

Latin America 1.7 Mn

Others 1.5 Mn

Western Europe 1.1 Mn

Global 2W Sales 50 Mn

India has the potential to lead EV race through 2Ws. In FY20 1.56 lac electric 2Ws were sold in India.

Source : Industry information and Team Analysis

 E-Sharing/Rental
Technology | ICE Vs Electric Scooter

ICE Engine Electric

•Battery & Motor

increases the cost
significantly for EVs

•Battery capacity
limits the vehicle
range

•To charge the battery,

charging stations are
required
•Internal combustion engine generates motive power by the •Engine is replaced with a Battery
burning of petrol, oil, or other fuel with air inside the engine. •Charging takes 3-5
•Battery supplies electrical energy to motor Hrs which reduces
•Temperature inside the engine reaches 2000+ deg C productivity
•Motor converts electric energy to
•Mechnical energy is transmitted to tyres using a complex mechanical energy •Battery needs
mechanism of gears, chain or belt drive. replacement every 1-3
•Motor output is connected to a belt drive to Years depending on
transmit energy to Tyre battery technology
•Over 500+ engine parts are required for making one 2W
engine. •No of parts are reduced to 50+ parts

Source : Industry information and Team Analysis 8

 E-Sharing/Rental
Unit Economics | ICE Vs Electric Scooter

ICE Scooter Electric Scooter

S.No Description UOM Units S.No Description UOM Units
1 Initial cost Rs/Veh 85000 1 Initial cost Rs/Veh 150000.0
2 Vehicle life Years 7 2 Vehicle life Years 7.0
3 End of life Value Rs/Veh 5000.0
3 End of life Value Rs/Veh 5000
4 Effective asset cost Rs/Veh 145000.0
4 Effective asset cost Rs/Veh 80000 5 Effective asset cost Rs/Year 20714.3
5 Effective asset cost Rs/Year 11429 6 Effective asset cost Rs/Day 69.0 Electric scooter
6 Effective asset cost Rs/Day 38 7 Effective asset cost Rs/Km 0.986 running cost
7 Effective asset cost Rs/Km 0.54 8 Daily Running Km/Day 70.0 (Rs/Km) is ~30-35%
9 Mileage Km/Charge 70.0
8 Daily Running Km/Day 70 lesser as compared
10 Daily charge Chage/Day 1.0
9 Mileage Km/Ltr 40 to an ICE scooter.
11 Electricity per charge Kwh/Charge 2.5
10 Daily fuel consumption Ltr/Day 1.75
12 Unit rate of electricity Rs/Unit 7.0 However Due to
11 Fuel cost Rs/Ltr 80
13 Charging cost Rs/Km 0.3
12 Daily Fuel cost Rs/Day 140.0 higher initial
14 Annual maintenance cost Rs/Year 10285.7
13 Fuel cost Rs/Km 2.00
product cost,
15 Daily maintenance cost Rs/Day 34.3
16 Maintenance cost Rs/Km 0.5
electric scooter has
14 Annual maintenance cost Rs/Year 5000
payback of ~2.4
15 Daily maintenance cost Rs/Day 17
Total Rs/Km 1.73 Yrs.
16 Maintenance cost Rs/Km 0.24

Saving Rs/Km 1.06

Total Rs/Km 2.78 Saving Rs/Day 74
Payback Days 879
~2.4 Years

Source : Industry information and Team Analysis 9

Electrical scooters market in India
July 2018 Jan 2019

State RTO Tax% on Electric Scooter varies

from 0% to 8%, e.g. Karnataka, Kerala, MHR
July 2019 has 0% Tac

July 2019

March 2019 - Basic custom duty increase (Battery and Cells)

March 2019 - Basic custom duty increase (EV Parts) March 2019 - Basic custom duty increase (Battery and Cells)

EV industry has seen GST reduction, Income Tax Benefits, RTO Tax exemption, FAME II benefits and also likely
increase in import duty of EV Parts/ Kits in future to promote localization. However purchase levels are still low.
Source : Industry information, Team Analysis
EV related Challenges in India are largely in line to consumer concerns globally
Innovations to overcome challenges

▪ Products - Advance battery technology,

premium, futuristic products
▪ Business model – Battery subscription,
Rental, Ride sharing, Self Drive, Sales
pitch/ approach etc

Key Consumer challenges

▪ High initial cost
▪ Lower Range/ Range anxiety
▪ Limited charging infrastructure
▪ Battery performance
▪ Will the battery capacity provide the driving range
that I need?
▪ How will I charge my EV if I am unable to install a
charging outlet at home?
▪ If I buy an EV today, will the technology be outdated
tomorrow?
▪ How long do EV batteries last and provide their full
capacity?
▪ How does the value of my EV depreciate over time?

Companies in India are trying innovation in Products and Business models to overcome these challenges

Source : Industry information and Team Analysis 11

Product and Business models innovations in India Electric scooter market

Product Innovations Business model innovation

Ather 450X TVS iQube
Quickest 0 – 40 kmph in 3.3 sec Entry of major ICE Scooter player

Battery
Subscription

Powered by intelligence Chetak

Iconic brand re-introduced

Renting Vs
Buying

The success so far has been very limited in terms of gaining volumes and securing business profitability

Source : Industry information and Team Analysis 12

Challenges and Way forward strategies

Strategies to overcome challenges

Innovative model that can reduce upfront cost burden on the

GTM Business customer. e.g. Delink battery cost from the remaining product
1
model •Subscription
•Battery Swapping

Key Consumer challenges Battery pack •Higher charge density e.g. NMC technology to increase range
2
technology •Higher # of cycles for better life of Battery pack
▪ High initial cost
▪ Lower Range/ Range
anxiety •Removable batteries that can be charged at home over night
Battery charging
▪ Limited charging 3 •Fast charging in less than 1 Hour
concept
•Swappable batteries that can be replaced on the go
infrastructure
▪ Battery performance
BOM cost
4 •Invest in localization for reduce the cost in long term
reduction

5 Product features •Connected vehicle for higher perceived value

•B2B strategy e.g. power train integration, tie up with

6 Collaboration
renting companies, ecommerce etc

Government benefits/ supporting regulations for EVs can only act as an enabler, companies have to drive change by
striking an optimum balance among above strategies to prevail and prosper in long run..
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Appendix
 E-2W E-3W E-Sharing/Rental
Some more familiar startups operating in EV
E-bicycle Other EVs
Space Component supplier Charging station

Source : Industry information and Team Analysis 15

Electrical scooters market in India
India electric scooter market is broadly divided in 2 FAME II - total outlay of Rs 10,000 crore over a period of
buckets based on prevailing regulations three years
• Outlay for Electric 2W is planned for ~2000 Cr
Bucket -1 Bucket -2
(low speed) (high performance)

Speed < Speed> 25

25 Km/Hr
Km/Hr &
&
Power <
Power >
250 W • Each vehicle model needs to satisfy technical eligibility criteria with
250 W regard to performance and efficiency and get it Type approved at
the recognized testing agencies as per Rule 126 of CMVR
• The criteria is based on minimum top speed (min 40 Kmph),
License minimum range per charge (min 80 km), minimum acceleration
and energy consumption efficiency of EVs.
RTO • FAME II excludes led acid battery powered 2Ws
Registration
• FAME II subsidy ranges from INR 7500 to INR 22,500/Veh for a
Battery VRLA VRLA Or
Lithium ion e-scooter
• Government attaches a localization rider for OEMs to qualify for
Our focus subsidy

Our focus is Electric Scooters having speed limit > 25 Km/Hr and using Lithium-ion battery

Source : Industry information, https://www.fame-india.gov.in/ModelUnderFame.aspx, Team Analysis

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