Lucknow: As per current business studies revealed, India’s electrical automobile market (EV) is estimated to emerge as a $7.09 billion alternative by 2025. Moreover, the Indian authorities can also be formulating new measures to attain 100% electrical automobile mobility by 2030. In truth, the Indian EV market is anticipated to witness a strong CAGR progress of 42.38%. Such optimistic developments within the Indian EV business make for an unlimited pool of alternatives for overseas buyers who’re keen to develop their companies within the nation.
Such immense transition in the Indian EV industry certainly promises a proliferating opportunity for foreign investors who are willing to expand their businesses in the country and has given rise to a lot of curiosity in the market. The process will be far easier with the help of an automotive consulting company in India.
Nonetheless, the estimation of progress can also be accompanied by issues about particular challenges associated to insufficient provide chains, sure authorities insurance policies, shopper behaviour, infrastructure, and so on. These hurdles have to be duly thought-about by overseas buyers so as to formulate an sufficient India market entry technique. International gamers will probably be sensible to hunt help from India entry technique consulting companies to attain these desired outcomes.
Consumers and fleets considering all-electric vehicles need access to charging stations, also known as EVSE (electric vehicle supply equipment). For most drivers, this starts with charging at home or at fleet facilities. However, it can be challenging as every one may not have access to an EVSE. Charging stations at workplaces and public destinations may help bolster market acceptance.
Lack of Charging Stations and Challenges from the Grid Side
The Central Electricity Authority (CEA) reported that India had established 927 charging stations nationwide as of June 2020. Since this is at a nascent stage, it is significantly less when compared to the 57,000 petrol pumps which the country has across various states. Furthermore, it is also reported that about 85% of charging of electric vehicles takes place at the owner’s home, which becomes a daunting task for those living in community apartments and have no reserved parking area.
Apart from this, the challenges which the grid might face when EVs become main-stream in India are also a matter of concern. According to an industry analysis, increased use of EVs by 2030 will shoot up the electricity demand by 100 TWh which is yet to be streamlined. This lack of adequate charging infrastructure poses a severe impact to garner substantial demands for electric vehicles in India and clouds the profit-making strategies of foreign firms willing to expand in the country. Under such circumstances, one can opt for a reliable India entry strategy consulting firm for a robust India market entry strategy.
Range Anxiety: For an EV user, range anxiety refers to the concern about the number of kilometres an EV will run i.e. how long the battery power will last. Many EV users like to travel long distances on a single charge, which is not feasible with the current battery technology installed in electric vehicles.
Time Anxiety: Customers are keen to charge their EVs as quickly as possible; this too isn’t feasible with the current charging technologies that are available in the market.
Charge Anxiety: Charge anxiety is about whether or not the EV user will find a charging station in the first place. This is followed by the issue of trust.
Lack of Trained Personnel
In addition to the problem of inefficient infrastructure, the lack of skilled personnel in the electric vehicle markets is a significant challenge that foreign investors must deal with. The EV industry in India is still in its nascent stage, and almost every automobile organization will face a challenge in areas of EV talent acquisition and development.
This makes it imperative for foreign firms expanding in India to avail assistance from a reliable India entry strategy consulting firm that can offer a comprehensive human resource development and talent acquisition strategy to scout for adequate experts on designs, product, infrastructure and manage pay packages.
Uncertain Consumer Behavior
Uncertain consumer behaviour associated with the higher costs of EVs and the issues about inadequate charging infrastructure is major impediments to growth in this sector. The average starting price of an electric car in India is approximately USD 18000 (INR 13 lacs), whereas the average starting price of a regular fuel-powered vehicle is approximately USD 6000 (INR 4.5 lacs). This nearly 3X price is a severe market entry barrier and requires an adequate India market entry strategy that will help to identify the right consumer segment and their needs and preferences to achieve a sustainable profit in a short span.
EV battery manufacturing in India is still largely dependent on imports due to the lack of Lithium, and this poses a major hurdle for companies willing to invest in India’s EV industry. Companies in India are trying to prospect for stakes in overseas resources and are transferring more raw material production chains to India; there is very little synergy as the battery manufacturing capacity still demands adequate planning.
This has also created the need for joint ventures to acquire adequate lithium-ion battery resources. Foreign organizations, therefore, are increasingly turning to consulting firms to help them to assess technology and market trends and offer comprehensive business opportunities in India to achieve profitable long-term growth.
Uncertain Consumer Behavior
Uncertain consumer behavior associated with the higher costs of EVs and the issues about inadequate charging infrastructure is also a major impediment in this sector. The average starting price of an electric car in India is about approximately USD 18000 (INR 13 lacs), whereas average starting price of a regular fuel-powered vehicle is approximately USD 6000 (INR 4.5 lacs). This nearly 3X price is a severe market entry barrier and requires an adequate India market entry strategy that will help to identify the right consumer segment and their needs and preferences to achieve a sustainable profit in a short span.
Impact of FAME II Policy
In the year 2019, the Indian government approved the FAME II scheme, by which the government has proposed to invest about USD 1.4 billion to incentivize the production of electric vehicles in the country. However, FAME II policy also requires 50% localization in vehicle production is required to avail of the incentive. This is a significant India market entry strategy barrier for most organizations as the Indian component suppliers are not yet ready to manufacture components in the face of the present low value of electric vehicles in the market. Therefore, most firms will not be able to enjoy the benefits of the FAME II incentive, which consequently impacts the growth of business opportunities.
Lack of service options
Most of us at some point in time would have faced a vehicle breakdown. And thanks to the large availability of skilled/unskilled auto service technicians, the problem is usually taken care of. However, with EVs, this system becomes redundant as there is a need for retraining repair professionals or finding newly trained workers. Yes, an EV has lesser moving parts when compared to an ICE vehicle, but the technology is something our informal service network has no knowledge of. Hence, this adds to the anxieties of EV owners/drivers who are constantly worried about getting stranded in the middle of nowhere without access to help. Even though most Auto OEMs have extensive service and dealer networks across India, their EV Service network is yet to reach a substantial level.
With any new system, there will always be challenges. The EV industry is still in its nascent stage in India, but it developing at a rapid pace. And catching up to speed are the infrastructure requirements to support the EV demand. Even with the current challenges, electric vehicles present huge potential to reduce our carbon footprint and provide a cost-effective system of transportation. And the one way to contribute towards this growth is to buy an electric vehicle.