What is your larger view on the growth prospects and the current state of affairs in India’s electric vehicle landscape?
The EV industry is on track but we need some acceleration, certainly. Electric mobility will happen in the country for sure but it depends on how quickly we want it to happen. Currently, the EV sector constitutes less than 1 per cent to the total vehicle sales in the country. We expect the electric two wheelers market to be 10-20 per cent of the ICE market in the next five years. As an industry, we have been working with the policy makers to further make a conducive environment for electric
vehicle OEMs in the country.
There is a view that India’s progress on e-mobility has been rather slow over the past few years. Do you agree? If yes, what is your opinion and what are the steps the government can take to ramp up this space?
The e-mobility sector in India will steadily take off but not at the rate that government considers it to be with current FAME 2 policy. On the other hand, state governments with their respective EV policies have made up for the shortcomings of FAME 2. The central government can boost the EV adoption rate in the country and get the first million EVs on the roads with required policy amendments, incentives for supply chain vendors and easy financing for customers etc.
What is your general view on the FAME 2 policy of the government? How optimistic are you about the country meeting the FAME 2 targets?
FAME 2 policy has good intent and direction to assist the EV industry but in some ways it has acted as a dampener. Electric scooters need to have 80 km per charge and minimum top speed of 40 kmph to be eligible to qualify for FAME II benefits. This has excluded 90 per cent of the remaining lithium ion battery-driven e-scooters from the subsidy option. E-scooters with these specifications mean that EV makers have to increase the size of the batteries for high range and speed, as well as they will also have to invest more to improve the existing battery technology. This is an uphill task for an industry that is still in the nascent stage. Businesses cannot depend on subsidies forever and the industry has to work upon its strategies to thrive.
To what extent, has the pandemic impacted Hero Electric’s business plans — capacity expansion, market expansion, new product launches, capital expenditure, etc?
The year 2020 for the EV Two-wheeler industry has seen its fair share of ups and downs due to the pandemic. While the outlook was great at the start, the pandemic brought slowdown across sectors. Post un-lockdown, the growth has been excellent seeing a steady rise in sales month-on-month. At Hero Electric, we were able to drive a significant chunk of business through online channels and keep the momentum going. Our dealers were able to sell bikes through our portals and the consumers too could book bikes including getting a test ride. The company is using several other innovative ways to increase the footfalls at our dealerships, including training of the dealership staff to better use the technology in communicating with the customers. We are doubling up our capacity every year and have aligned our manufacturing plants, vendors and dealership network to achieve the feat. Our product launches are happening as planned, we recently launched the ‘City Speed’ variant of our popular Optima and Nyx electric scooters.
What have been the key learnings for you arising out of the pandemic era?
Dynamic organizations have used Covid as an opportunity compared to organizations that have a rigid structure. We have reinvented ourselves in terms of products and customer engagement initiatives. We came up with attractive products that offer great features and bring value to the customers. We are largely communicating with the customers digitally and as mentioned earlier got a significant chunk of business through online channels. We are expecting to register double sales figures as compared to last year.