Running Electric Vehicles on Indian roads is mighty for start-ups like Ather Energy who are trying to Make-In-India

Running Electric Vehicles on Indian roads is mighty for start-ups like Ather Energy who are trying to Make-In-India
Electric vehicles are revolutionary even as they are elusive in a country like India where the government has set up a mighty goal of turning all new passenger cars sales to electric by the year 2030.

Challenges like uneven roads, low spending capacity and lack of government support still act as hurdles to the electric vehicles becoming a mass market product.
When it comes to manufacturing Electric Vehicles like scooters, start-ups like Ather Energy learnt the hard way of how slow the process can get. The company announced its Made-In-India electric vehicle S-340 in February 2016 and anticipated roll out this year as it had a functional vehicle model to boast of.

What they realized quickly is that the supporting infrastructure wasn’t ready and their initial goal of distribution in 2017 would get stalled due to inefficiencies in the manufacturing process.

Another issue was the validation of the vehicle which can take a very long time. “We have gone through several iterations of the same working vehicle. We started fixing our supply chain as every unique part we make needs a vendor to produce it in bulk. Getting contracts in place and talking to hundreds of vendors has delayed production beyond our imagination. Our plant should now be ready for production in 2018 after which we will start shipping,” Tarun Mehta, CEO, Ather Energy told Business Insider.

Ather Energy plant’s capacity is about 30,000 units and the company has put out an elaborate plan to retail the vehicles. Initially consumers will be provided with a lot of data, information and content and the company will target cities like Bengaluru and Chennai where infrastructure and awareness for Electric Vehicles has slowly been building.

“The government has been supportive of the electric vehicle mission and is making strong statements by passing legislations that support electric vehicle production. When we go to manufacturers and ask them to make new parts for electric vehicles, they realize that this is the future and are complaint to the new requirements,” says Mehta who has been supportive of the state’s encouragement in terms of subsidies.

R&D infrastructure and first Designing in India

“As most of the auto industry will get affected in the next two decades due to the Electric Vehicle revolution, the government needs to encourage Original Equipment Manufacturers to invest in more Research and Development. We don’t have manufacturing companies for most of the components for electric vehicles like Lithium ion batteries which can be easily manufactured in the country,” Mehta laments that most of the cost occurs in importing the special batteries that aren’t manufactured in India.

Ather Energy imports cells from abroad but the company designs, manufactures and distribute the battery packs in their factory in Whitefield, Bengaluru.

Mehta predicts that in an individual electric scooter at scale the battery cost can go upto Rs. 40,000 out of which the government can save Rs. 15,000 by manufacturing it locally.

The Lithium ion battery cells are a common requirement in most electric vehicles whether its from companies like Tesla or Mahindra & Mahindra. India currently imports 100% of Lithium-ion cells and M&M has stated a potential loss of Rs. 200,000 per vehicle amounting towards a total of Rs. 30 million against supplying 150 e-Veritos, which is not a good sign.

Lithium ion cells manufacturing can be really expensive for a start-up and it is a project that ideally the government can take up with foreign partners.Even if the government undertakes a small investment in Lithium ion cells, it can take away the Forex risk out completely as it will result in encouraging further investments.

(Photo Credits: Pankaj Anand)