Opportunities for entrepreneurs in EV industry

All of a sudden we have realized that Electrical Vehicles have become a topic of discussion in each and every country. We cannot deny the fact that the climate is changing. And that too at a stupendous rate. Human activities have caused this havoc. We are so accustomed to our polluting technologies that getting off them completely is not possible. We have to find sustainable technologies that not only cater to our needs but also ensure that we do not destroy and pollute the nature around us. 

This is where the role of Electrical vehicles comes into picture. The time is going to come soon when we are going to have millions of electrical vehicles on the road. It opens a myriad of opportunities for those who are looking for entrepreneurial ventures in the EV industry. 

The Union transport minister, Nitin Gadkari also said in a conference that India has all the potential to become an EV nation in the next five years.  

With an increasing demand it is not only the manufacturing of Electric vehicles that is going to boom. When there are more electrical vehicles on the road then a lot of charging infrastructure will also be required. For entrepreneurs wanting to make it big in the industry, this could also be an area where they could invest and expect rewarding returns.  

Following are the different areas where entrepreneurs can look to seize the opportunities and create a niche for themselves in the EV industry:- 

Manufacturing 

A host of opportunities have been opened in the area of manufacturing. The startups are now looking for manufacturing electric vehicles. Generally in the past the manufacturing of automobiles was reserved for only big players. New organizations and individuals did not have the capital or might to stand the competition given by these players. But now with the idea of E-mobility and sustainable technology, new doors have been opened for entrepreneurs. 

Battery manufacturing has also become one of the key elements that needs to be focused on. The reasons are manifold due to which India lags in the production of Li-ion batteries. Due to the sudden spike in the EV industry a lot of entrepreneurs are seen penetrating the market of battery production. Though right now cells are imported from China and Taiwan and then assembled in India, but the government plans to initiate the process of total indegneious production of EV in next five years. 

A Lot of other components also need to be manufactured for the production of Electrical vehicles, like Current converter, electrical motors etc. though right now these products are being imported from other nations. The incentive in doing it locally is that it will be tailored to indian needs, which in turn would lead to a spike in the popularity of the Electric vehicles and would increase the customer base. 

Charging infra

Apart from manufacturing the various components the EV industry also offers opportunities in various other fields. The most prominent of them all is the charging infrastructure and battery storage.  

The government of India under its much talked about scheme called Fame II offered a huge sum of incentives to set up the charging portals all around the country. Under the scheme the government is supporting 2700 charging stations and the budget allocated for the same will be around Rs 1000 crores.  

Realising the potential of the market which will definitely be a hotspot for investors in the times to come, a lot of companies have started venturing in the ecosystem of electric vehicles. Companies have already started planning an intensive charging network in the whole country. Apart from the private companies, owners of malls and residential complexes have also started extensively investing in the technology for making their spaces better equipped for a future that is inevitably going to come. Companies like Panasonic also are aggressively expanding the charging infrastructure. 

Still there is ample room and opportunity for new individuals and organisations to capture the market before it becomes too cluttered. 

Swapping battery station

China has more than 300 million electric 2-wheelers on its roads. Several hubs are available where you could take your 2-wheeler top when the battery charge drops and replace it with a fully charged battery. Now see the potential for growth of the EV in India, especially 2-wheelers and envisage the business opportunities that present themselves if you had to put up a battery replacement station. Most electric 2-wheelers have batteries that can be swapped. Build a charging hub, rent out fully charged batteries to those who want them and you're all set to go. But it's not that easy either. Battery design isn't standardised. Manufacturers design batteries as per their requirement and this means stocking batteries of several kinds could be a challenge. Still, if electric 2-wheeler sales take flight, the battery swap business could be a winning strategy.

Charging lounger

An EV battery cannot be charged quickly. At present charging technology even with amped up superchargers take around 50 minutes to deliver a full charge. That is a lot of time, time that can be spent doing several other things. This is where the concept of Charge & Chill stations came up. People could be having a coffee chilling out in a lounge reading a book or having a snack or a meal, or in some cases even watching a movie. This also means charging stations do not need a dedicated fuel station like destination any longer, cafes, movie halls and even malls can set up charging stations and let people use the charging facility.

Government boost 

The move to electric mobility has always been the priority of the Narendra Modi government, keeping in mind India’s commitment to reduce its carbon footprint by a third from 2005 levels.

NITI-Aayog is striving to curtail ICE 2-wheelers under 150cc by 2025 and 3-wheelers by 2023. Nearly 80 per cent of all vehicles sold in India are 2- and 3-wheelers.

In her maiden budget, Finance Minister Nirmala Sitharaman has made switching to EVs a priority. She has allocated Rs 10,000 crore to the Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme.

India’s EV policy is headed in the right direction with the framework linking subsidy to higher level of localisation

Conclusion

Industry experts say that with growing customer awareness, it’s the best time to enter into an EV franchise. “EVs will be the mainstay of India's vehicle market in the next 2-5 years and beyond. Definitely, people entering this business can leverage the early mover advantage,” emphasizes Gill. He adds that consumers are happy to spend more on high quality products.

On the other hand, there are not many new franchise opportunities on the electric cars front as most of the 4-wheeler players are still re-aligning their strategies for EVs. In the near future, players like Mahindra do not have plans for exclusive EV outlets and will be using the current extensive network of dealerships across India

Typical investment required for an EV franchise ranges between Rs 12-20 lakh for a humble 500 sq, ft area. This includes Rs 4-7 lakh on interiors and the rest on stocks, spare parts and equipment. “New dealerships can easily make Rs 80,000- 90,000 gross profit per month by selling 20 scooters, which will enable them to achieve RoI in just 9-10 months if the premises are owned and 16-18 months in case of rented premises. In fact, many of our dealerships are selling more than 100 scooters in a month,” reveals Kumar of Goreen.