AVALON

Consulting

India’s EV Scenario: Challenges and

Opportunities
Presentation
15 May 2023

Submitted to:

Submitted to:
Macroeconomically, India presents a compelling case for investment by Korean
companies
Macroeconomic Overview

5th largest in the Fastest growing Young, working Growing consumer 2nd home for
world in GDP large economy age population spending Korean
▪ USD 3.4 Trillion Median age of Population, companies
Nominal GDP (2022) ▪ 6.9% in FY2022-23 2023 • The middle-class Cultural, behavioural
▪ USD 11.85 Trillion (Apr-Mar) India 29 population will increase synergies
GDP PPP* (2022) ▪ FY 2023-24 forecast: China 38 from 31% in 2022 to
▪ IMF – 5.9% USA 39 47% in 2030.
▪ World Bank – 6.3% Korea 43 • Middle class will drive
▪ Moody’s – 5.5% 75% of consumer
W. Europe 45
spending in 2030.
Japan 49

*PPP – Purchasing power parity

2 Confidential. © AVALON CONSULTING Source: World Bank, IMF, Moody’s, Worldometer, Fitch, Avalon Consulting Research
 India has a strong automotive sector, both in manufacturing and from a market
perspective
Automotive Global Standing

The sector contributes 7.1% to overall GDP and 49% to manufacturing GDP of India

World’s 3rd largest light vehicle* market (after China and US)

World’s 2nd largest 2-wheeler manufacturer (after China)

4th largest passenger car manufacturer (After China, USA and Japan)

World’s 2nd largest bus manufacturer (after China)

3rd largest heavy commercial manufacturer (after China & Japan)

World’s largest tractor manufacturer

3 Confidential. © AVALON CONSULTING Source: InvestIndia, PIB, S&P Global Mobility, Avalon Consulting Research and Analysis - All data is for 2022

*Light vehicles include all passenger vehicles, small commercial vehicles and vans up to six tonnes
 The Automotive sector was experiencing strong growth period (before COVID) in
terms of sales and has regained momentum in FY23
Automotive Growth (ICE) CAGR refers to
Compound Annual
Growth Rate which is the
<Domestic Sales, # Mn> average annual growth
rate over the specified
CAGR time period, taking into
+10% account the
compounding
CAGR
-1%
26.3
25.0
3.4
3.3 CAGR
21.9 1.0 21.5 +21%
0.7 21.2
0.9
3.0 0.6 2.8
18.6 3.9
0.7 0.7 17.5 CAGR FY22 - 23
0.5 0.6 2.7 1.0
21.2 Passenger Vehicles 27%
20.2 3.1 0.5
0.2 0.6 Commercial Vehicles 34%
17.6 17.4
15.1 0.7 15.9 Three Wheelers 87%
0.3
13.5 Two Wheelers 18%
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Note: 2016-17 or FY17 denotes the financial year from 1 April 2016 to 31 March 2017

4 Confidential. © AVALON CONSULTING Source: SIAM, Avalon Analysis

 Production mirrored the sales trend
Automotive Growth (ICE)

<Production, # Mn>

CAGR
+10%
CAGR
0%
30.9
29.1
4.0 CAGR
4.0 26.3 +13%
1.1 25.9
25.3
0.9 1.3 3.4
3.8 1.0 22.7 22.9 4.6 CAGR FY22 - 23
0.8
0.8 1.1 3.1 3.7 Passenger Vehicles 25%
0.8 1.0
24.5 0.9 Commercial Vehicles 29%
23.2 0.6 0.8
21.0 0.6 Three Wheelers 13%
19.9 18.3 0.8 19.5
17.7 Two Wheelers 10%
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23

Note: 2016-17 or FY17 denotes the financial year from 1 April 2016 to 31 March 2017

5 Confidential. © AVALON CONSULTING Source: SIAM, Avalon Analysis

India has well established OEMs and supply chain players in 4 major Automotive
Hubs
Automotive Hubs

Delhi-Faridabad-Gurgaon
Kolkata-Jamshedpur

Pune-Nashik-Aurangabad & Gujarat

Chennai-Bangalore-Hosur

6 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis

Many of these OEMs have launched differentiated products across segments (1/2)
EV Market Structure

Cars 2 Wheelers

EV 6 Okinawa IPraise+ TVS iQube

IONIQ 5

Tiago EV Atto 3 Ola S1 Pro Hero Vida

Comet EV XUV 400 EV Chetak EV Ather 450X

7 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis

Many of these OEMs have launched differentiated products across segments (2/2)
EV Market Structure
Passenger 3 Wheelers LCV (3W/4W) Bus

E – Rickshaw
(mainly unorganized)

8 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis

 The Indian EV market stands at 876k vehicles in 2022-23 dominated by 2 wheelers,
4 wheeler sales was ~53K
EV Market

<EV Sales, # ‘000>

CAGR
+61%
876
438
157
152
787
130 400

152 144 15 CAGR FY19 - 23

2 Wheelers +58%
126 4
53 3 Wheelers +125%
24 4 Wheelers +126%
1 LCV (3W/4W) +88%
1 19
1 9 E-Buses +117%
1 2 0 3 6 0 1 2
2 1
0
2018-19 2019-20 2020-21 2021-22 2022-23

Note: 2016-17 or FY17 denotes the financial year from 1 April 2016 to 31 March 2017

9 Confidential. © AVALON CONSULTING Source: SMEV, Vahan, Telangana Open Data Portal, Avalon Consulting Research and Analysis

* Note: E3W does not include E-Rickshaws

 Across segments, some key drivers will spur the growth of EVs
Drivers for EV

Government
Falling Battery
Incentives
Prices Both demand and supply
High Fuel Prices Expected 7-8% annual side incentives from central
Makes the total cost of decline in lithium-ion and state governments
battery prices to make Ride Sharing Growing eco -
ownership for ICE vehicles
(across all segments) high Pollution & EV more affordable – Commercial applications consciousness
Urbanization however, shorter term have higher viability for among Buyers
Congestion shocks expected EVs Residents are looking for
Better charging infra, better
roads, shorter commutes Increasing strictures and cleaner air and value
enabling replacement of restrictions against ICE health & well-being
motorcycles with e-scooters
10 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis
Apart from traditional OEMs, new age OEMs have become part of the EV ecosystem
OEMs
Passenger
Cars 2 Wheelers LCV Bus
3 Wheelers1

Traditional
OEMs

(Plans)

New Age
OEMs

(Plans)

Note: New Age OEMs refer to the manufacturers that have specially entered the automotive sector for the EV industry
11 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis

1- There are many unorganised players in the passenger e-rickshaw segment

The Central Government is supporting the growth of the EV ecosystem and local
manufacturing in India through multiple initiatives
Snapshot of Central Government EV Policy Support In May’23, the
Union Government
has reduced
subsidy for E2W
from USD 181 per
Ministry of Road Ministry of KWh to USD 121
Department of Ministry of Power Housing & Urban per KWh.
Transport &
Heavy Industries Affairs The maximum
Highways subsidy ceiling has
been reduced from
40% to 15% of the
• FAME II restructuring • Registration & sale of EVs • Charging infrastructure • Building bylaws vehicle's ex-factory
• ~1,062,000 vehicles, without pre-fitted batteries guidelines 2019 (revised amended for providing price
5,000 charging stations (aims to reduce upfront costs) in 2022) EV charging points
supported through • Green tax policy • “Go Electric” campaign in (2019)
FAME • No permit requirement for 2021
electric commercial vehicles1 Extension of
the FAME II
subsidy till
Ministry of FY24
Production Linked The Government
Ministry of NITI Aayog
Environment & Incentives (PLI)
plans to increase
Finance the outlay for E2W
Forest
under the FAME II
Scheme from
• GST on EVs reduced to unutilized funds
• Published Draft Battery • FAME II restructuring • PLI schemes for ACC2
5% from 12% & on allocated for E3W
Waste Management • State E-Mobility Batteries, Automobiles, and E4W
chargers from 18% to 5% Rules in 2020 Accelerator Program Auto Components and
• Additional tax deduction of • Shoonya Campaign Electronic Components
USD 2,000 on the interest • E-AMRIT portal
paid on loans for EV • Battery swapping policy
purchase
12 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis, Government Websites

1. Permit is issued by State Govt to authorize the use of a vehicle for commercial purposes 2. ACC = Advanced Chemistry Cell
 Production Linked Incentive schemes for ACC Batteries, Automobiles, Auto Components and
Electronic Components have been announced, which will drive reduction in import dependency
Snapshot of PLI Schemes Announced

Date of
Date Products / Components
Scheme Incentives Companies Selected Approval of
Announced Included
Companies
National ▪ Batteries ranging from 50-350
WHr/Kg and 1,000-10,000+ ▪ Capped at 20% of ACC sale price, Ola Electric, Reliance New
Program on
12th May, 2021 battery cycles for max of 20 GWh per firm Energy Solar Limited, Rajesh 28th July, 2022
ACC1 Battery ▪ Cumulative ACC manuf. ▪ Total outlay of USD 2.2 Bn Exports
Storage Capacity of 50 GWh

▪ 13-18% of Determined Sales Value Ashok Leyland, Eicher, Ford,

Champion per year (min. of USD 15 Mn Hyundai, Kia, Mahindra, PCA,
▪ BEVs meeting criteria of FAME II
OEM Incentive 15th Sep, 2021 required in 1st year) Pinnacle, Suzuki Motor, Tata, 11th February, 2022
scheme in all segments
Scheme ▪ Total outlay of USD 3.1 Bn including Bajaj, Hero, Piaggio, TVS, Ola
Component Champion Scheme (non-exhaustive)

Component Traction motors, motor controllers, Maruti, Bharat Forge, Hero,

▪ 8-18% of Determined Sales Value
Champion VCU2, BMS3, Transmission, HV4 Mando, Asahi, BASF, Bosch,
15th Sep, 2021 per year (min. of USD 3.3 Mn 15th March, 2022
Incentive Wire Harness, ECU (non- Kyungshin Industrial Motherson
required in 1st year)
Scheme exhaustive) (non-exhaustive)

Large Scale Vishay Components, Deki

SMT components, discrete ▪ 3-5% on incremental sales of goods
Electronics, Continental Device
Electronics 1st Apr, 2020 semiconductors, resistors, made in India (min. of USD 12 Mn 9th September, 2022
5 Salcomp Technologies (non-
Manufacturing capacitors, PCBs (non-exhaustive) incremental sales)
exhaustive)
1. ACC = Advanced Cell Chemistry; 2. ECU / VCU = Electronic/ Vehicle Control Unit 3. BMS = Battery Management Systems
4. HV – High Voltage 5. PCB = Printed Circuit Boards
13 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis, Government Websites

Note: The government has announced SOPs in April’23 to simplify the application process
The central policies are backed up by EV policies in 22 states, announcing tax /
registration fee rebates and / or direct subsidies
State Policies

EV Policy in place

Draft EV Policy

No EV Policy

14 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis

In particular, Tamil Nadu has specific incentives for Foreign Direct Investment in
general …
TN Industrial Policy 2021

SGST Refund on Capital

R&D Training Incentive Goods
R&D Training Incentive of USD 120 State GST to be refunded on
per person per month can be availed capital goods
for 12 months, intended for personnel
engaged only in core R&D in science
and technology
Imported Machinery
Relocation of foreign industrial
Land Cost Subsidy FDI projects to TN would include the
Up to 10% of land cost in Incentives relocation of machinery as well.
Thus, new and second-hand
A & B category districts
and 50% in C category (2021) machinery can be included under
districts up to 20% of Eligible Fixed Assets.
EFA1

Flexible Investment Subsidy Transport

75% of the cost incurred on
Investment Promotion Subsidy of up to 40%
transportation and logistics towards
of costs through SGST Reimbursement for
the relocation of capital goods from
Final Products (or) Flexible Capital Subsidy
the source country to TN will be
(or) Fixed Capital Subsidy (or) Turnover-
reimbursed, subject to a total limit of
based Subsidy. Companies having relocation
USD 1.2Mn
plans may be provided a higher set of
incentives on a case-to-case basis.
15 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis

1 EFA – Eligible Fixed Assets

 …and EV manufacturing in particular
TN EV Policy 2023

Employment Incentives Capital Subsidy EV Parks MSME Incentives Interest Rate Concession

• Reimbursement of the • Capital Subsidy of 15% • Exclusive EV parks in • An additional capital • The Government of
employer’s contribution of investment in major automotive subsidy of 20% will be Tamil Nadu would
to the EPF for all new manufacturing of EV, manufacturing hubs offered over and provide an interest
jobs created during the EV Components, to attract potential above the eligibility concession of 5% as a
policy period through Charging Infrastructure investments and limit for capital rebate on the rate of
investments in EFA* (or) create a vendor subsidy to MSME interest, taken for the
(not exceeding USD • Special Capital Subsidy ecosystem units that are purpose of financing an
580 per employee) of 20% of investment in engaged in EV investment project in
manufacturing of ACC component or EFA*, for a period of 6
(or) charging years
infrastructure
• Turnover-based manufacturing
Subsidy of up to 2% of
the project’s annual
turnover

16 Confidential. © AVALON CONSULTING Source: Investingintamilnadu.com, Avalon Consulting Research and Analysis

*EFA – Eligible Fixed Assets

 The Indian EV Sector thus reveals promising opportunities for investment and
growth, however, consideration of the accompanying challenges is essential
SWOT Analysis

Strengths Weaknesses
❑ Rapidly growing EV and EV Components ❑ Lack of charging infrastructure leading to
market range anxiety
❑ Government support like subsidies, PLI ❑ High upfront costs as compared to ICE
schemes and tax incentives vehicles
❑ Lower TCO1 as compared to ICE2 vehicles ❑ Limited range – making EVs unsuitable
❑ India’s well-established automotive for long-distance travel
manufacturing industry with a strong supply ❑ Dependence on imports for certain key
chain components and raw materials
SWOT
Opportunities Threats
❑ Increasing investment in the whole EV
❑ Competition from traditional automakers
ecosystem (chargers and charging stations,
❑ Regulatory changes (ex: uncertainty
components, retro-fitment, platforms) driving the
around FAME subsidy removal) and
growth of the sector
delays
❑Partnerships with Indian firms through JVs3 or
FDIs can help foreign companies in lowering
costs through local production
1 – Total Cost of Ownership 2 – Internal Combustion Engines 3 – Joint Venture

17 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis

 The market has matured to largely absorb the impact of removal or reduction of subsidies,
especially in 2 wheelers
TCO Breakeven for ICE vs E2W – Selected High Speed Models

TVS iQube vs Honda Activa 6G

Breakeven – With FAME Subsidies (USD) Breakeven – Without FAME Subsidies (USD)

USD Y0 Y1 Y2 Y3 Y4 Y5 USD Y0 Y1 Y2 Y3 Y4 Y5

ICE -1,005 -303 -303 -303 -303 -303 ICE -1,005 -303 -303 -303 -303 -303

EV -1,991 -69 -69 -69 -69 -69 EV -2,093 -69 -69 -69 -69 -69

Difference -987 234 234 234 234 234 Difference -1,088 234 234 234 234 234

Cum. -987 -753 -520 -286 -53 181 Cum. -1,088 -854 -621 -387 -154 80

This is for personal use – running 30 km / day. The business case for commercial use (60-100 km per
day is long established)

Note: ICE = Internal Combustion Engine TCO = Total Cost of Ownership

2. Key Assumptions: 30km per day running, USD 1.21 per litre fuel cost, USD 0.11 per kWh charging rate (based on averages of Mumbai, Delhi, Kolkata and Bangalore), 8 years of lifetime
3. FAME subsidies are calculated based on revision as of May’23 (USD 121 per KWh up to 15% of vehicle’s ex-factory price)

18 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis, Company Websites, Expert Interviews
The EV tree bears many fruits of opportunity in many branches
EV: Innovation Map
Components
Motors, hub-mounted drives, controllers, chargers,
converters, thermal management systems
Battery and Chargers
Batteries, chargers
Charging Stations
Charging station operation and maintenance,
Manufacturing and installation of charging
stations

Vehicle
Recycling Ecosystem
Vehicles, charging infrastructure,
Lithium ion battery
platforms
recycling, metal recovery

E-Mobility Repairs and Retro-fitment

Taxi apps, shared mobility platforms, e- EV Retro-fitment
bike sharing

19 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis

EV production is projected to grow by 11x in the next 5 years, with 9.7 Mn EVs produced
in FY28 – E2W will lead the way
Growth of EV Production

<EV Production by Category, FY23, FY28 and FY30

(‘000 Vehicles)> 13.4%
CAGR
61.8% 12,510
24
CAGR 429
302
CAGR 2023-28 2028-30
1,099 HCV 55% 17%
LCV 65% 36%
9,722
17 E3W 61% 37%
233
160
E4W 65% 30%
HCV 649
10,656
LCV E2W 62% 11%
E3W* 876
2 15 53 19 8,663
E4W
E2W 787

FY23 FY28 FY30

20 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis, Expert Interviews

* Note: E3W does not include E-Rickshaws

In E4W, Tata is expected to remain the market leader in FY28, but players like
Hyundai and Maruti are expected to take away share from incumbents
E4W – Growth / Degrowth Drivers for Select OEMs
Expected Market Share

OEM Growth / Degrowth Driver FY23 FY28

• Share expected to reduce due to growth of competitors, but will remain market leader
• Success of Tiago EV due to affordability and of Nexon EV due to surge in SUV demand 81% 45%
• Plans to have 10 new EVs by 2026; differentiated products announced - Punch, Curvv,
Avinya

• Launch of a compact 2 door “Comet EV” in the affordable range would keep MG in the race
• Aims to have 5 new models by 2030 but no concrete plans announced 10% 9%
• Share expected to reduce due to entry and growth of competitors

• Already established Creta in the ICE segment will help gain higher attention towards the EV
variant (to be launched by 2025)
• Hyundai plans to launch 6 EVs in the Indian market by 2028 2% 12%
• MoU to invest USD 2.4Bn by 2033 in TN to expand its EV presence and to set up battery
pack assembly unit with annual capacity of 178,000 units of batteries will drive growth
• KIA plans to have a full range of electric vehicles, from EV1 to EV9; will launch an affordable
variant in 2025
• Will launch its first product in 2025; plans to launch 6 EVs by 2030
• Focus on producing large volumes which will give competitive advantage 0% 18%
• Will benefit from the market leader position in ICE segment – manufacturing facilities,
distribution network, customer base
21 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis; News Articles, Expert Interviews
Tata Nexon EV: A testament to customer-centric product development success
Reasons of success of TATA Nexon EV in India

Increasing demand for SUVs in India along with TATA’s large reach in terms of
dealerships

Price point: When launched in Jan’21, it was the most affordable

e- SUV in the market (Currently priced at USD17.9k while Mahindra
XUV 400 EV is priced at USD19.3k)1

Seamless charging experience: The 40.5 kWh Li-ion battery

pack takes 60 minutes to charge from 0-80% using a CCS2 fast
charger. The certified full charge range is 453km

TATA’s customer experience: Provides free home charger

installation, 24×7 emergency charging support, innovative retail
experiences and easy financing options

Drivability & Design: Provides 2 driving modes – Sport (allows intense

power delivery) and Drive. Provides powered sunroof, head lamps with tunnel
detection, EV badges

22 Confidential. © AVALON CONSULTING Source: Company website, Avalon Consulting Research and Analysis

1 – The prices are ex-showroom, for the base variants

 Many OEMs have committed investments in the EV space in India (1/2)
EV Related Profiles of Select OEMs
OEMs Current Products Planned Launches Other Growth Plans
TATA Motor Tiago EV • Punch EV – Sep’23 Plans to raise USD 500-600Mn from global investors for the
Nexon EV Max • Plans to have total 10 EVs by EV business
Nexon EV Prime FY26 Looking to open separate sales channel for EVs by H1 of
Tigor EV FY24
Hyundai IONIQ 5 • Plans on launching 6 EVs by 2028 Announced to invest USD 2.4Bn by 2033 in Tamil Nadu to
Motors Kona • Electric Creta to be launched expand its EV presence and modernise vehicle platforms.
Will also set up a battery pack assembly unit with annual
capacity to assemble 1,78,000 units of batteries
MG Comet EV • Plans to launch 5 new models by Plans to invest USD 603Mn in India by 2028 with EVs as the
ZS EV 2028 (MG 4 could be the next key focus – will set up a manufacturing plant in Gujarat. Will
launch) explore opportunities to locally manufacture battery cells and
feasibility of hydrogen-cell technology
Kia EV6 • Plans on launching a completely Plans to invest USD 24Mn towards R&D, infrastructure
Indian, affordable EV by 2025 development and manufacturing of EVs in India
Mahindra & XUV 400 EV • XUV e8 to be launched in Dec’24 In Feb’23, invested USD 120Mn to establish an EV
Mahindra • XUV BE.05 and BE. 05 RALL-E in manufacturing plant – will produce both 3W & 4W
the pipeline
BYD BYD Atto3 • BYD Seal EV to be launched in Q4 Plans to expand dealer network from 24 in 2022 to 53 by
BYD E6 2023 2023

23 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis

Many OEMs have committed investments in the EV space in India (2/2)
EV Related Profiles of Select OEMs

OEMs Current Products Planned Launches Other Growth Plans

PSA E-C3 EV (Citroen) • The C3-based compact EV will be Citroen aims to double their dealer network and
followed by all-electric MPVs and have 100 dealerships by the end of 2024 in India
compact SUVs – models & dates
unannounced
Maruti N/A • Its 1st E-SUV to be launched by FY24 Announced to invest USD 1.1Bn in Gujarat by 2026
• Plans to launch 6 EVs by FY30 for local manufacturing of EVs and EV batteries

Ola N/A • First Electric Car to be launched in Ola will invest USD 920Mn to annually make
2024 140,000 cars and hire 3,111 workers in Tamil Nadu
through the new investment
Toyota N/A • Toyota BZ4X showcased at Auto Expo Toyota announced plans to invest $530Mn
2023, to be launched soon in India in EV manufacturing in Karnataka

Renault N/A • Plans on launching Kwid EV In Feb’23, announced a new investment of USD
640Mn in the Indian market with Nissan, to launch 6
new cars (out of which 2 would be EVs)
Nissan N/A • Will launch an EV in collaboration with In Feb’23, announced a new investment of USD
Renault (apart from Kwid EV) by 2025 640Mn in the Indian market with Renault, to launch 6
new cars (out of which 2 would be EVs)
24 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis
In E2W, future growth is expected to be characterized by the entry of ICE majors,
resulting in a gradual erosion of incumbent market share (1/2)
E2W – Growth / Degrowth Drivers for Select OEMs Expected Market Share
OEM Growth / Degrowth Driver FY23 FY28

• Share expected to reduce due to growth of competitors, but will remain market leader
• High market reach due to omnichannel strategy & speed of offline expansion (Has 500
21% 17%
experience centres and plans on 500 more by August 2023)

• Negative impact on the sales due to FAME subsidy probe and increased prices
• Relatively few significant launches announced for the upcoming years
13% 9%

• Termination of FAME subsidy would lead to increased prices of the models, thus
impacting sales
12% 9%

• Existing strong presence in the ICE segment

• TVS Creon to be launched in second half of 2023 11% 13%
• Plans to export in FY24 through ICE networks and new investments

25 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis; News articles, Expert Interviews
In E2W, future growth is expected to be characterized by the entry of ICE majors,
resulting in a gradual erosion of incumbent market share (2/2)
E2W – Growth / Degrowth Drivers for Select OEMs Expected Market Share
OEM Growth / Degrowth Driver FY23 FY28

• Showcased two E2Ws - NGX and NXU at the Auto Expo but no launch date announced
• Will find it difficult to compete with established traditional OEMs and would lose market 12% 7%
share

• Share expected to reduce due to growth of competitors

• Plans on launching an affordable version of 450X - no other significant launches 11% 8%
announced for the upcoming years

• Plans on launching variants of Chetak in the premium segment

• Can leverage existing assets like strong dealer network, large manufacturing capacities 4% 9%
and customer knowledge in the 2W segment

• Plans to cover 100 cities in 2023 with Vida EV

• Will benefit from large manufacturing capacities and market leadership in ICE segment 0.1% 6%
• Has aggressive plans of launching a product every year and is targeting 20 global
markets

• Already established Honda Active in the ICE segment will help gain higher attention
towards the EV variant (to be launched in FY24) 0% 8%
• Positive brand image due to presence in ICE segment.
26 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis; News articles, Expert Interviews
In FY23, Battery Packs make up the largest share of the USD 1254 Mn EV Specific
market, followed by Motors, BMS and Motor Controllers
EV Specific Component Market Size – 2022-23
Total:
<EV Specific Component Market Size by Category, 2022-23 (USD Mn, %)> USD 1254 Mn
437 34 539 47 197
38 12
80 Motor 145 (12%)
(8.7%) 6 9 14 (6.1%)
23 (14.8%) Charger 92 (7%)
(5.2%) (18.4%) (18.4%)(7.0%)
50
2 3
(9.3%) Battery pack + BMS
(6.8%) (6.8%)
for an E-Bus costs
Significant increase ~USD 7,300 on
in peak power average
required in
266 E4W/E3W
(60.9%) 138
17 compared to E2W 299 24 Battery Pack 744 (59.0%)
(70.1%)
(50.5%) (55.6%) (50.5%)

53 5 7
(12.2%) 50 3 BMS 118 (9%)
(14.2%) (9.3%) (14.2%)(1.5%) 3.8% Battery Chiller 8 (1%)
8.7% 3.7% 4.6% Motor Controller 73 (6%)
7.9% 7.4% 7.9%
4.3% 6.9% Wiring Harness 74 (6%)
2.1% 2.1%
E2W E3W E4W LCV HCV

27 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis, Expert Interviews

Note: Battery chiller is present only in Buses (HCV)

In FY28, Battery Packs (USD 7.4 Bn) will continue to make up the largest share of the
EV Specific market of USD 13 Bn, followed by Motors and BMS
EV Specific Component Market Size – 2027-28
Total:
<EV Specific Component Market Size by Category, 2027-28 (USD Mn, %)> USD 13,045 Mn

4,908 320 5,728 523 1,566

442 101
885 Motor 1,594 (12.2%)
238 (9.0%) 63 103 105 (6.5%)
(19.6%) (15.5%) (19.6%)
(6.7%) Charger 896 (6.9%)
(4.9%)
497
22 (8.7%) 35
(6.8%) (6.8%)

2,892 155
1,066 Battery Pack 7,405 (56.8%)
(58.9%) (48.3%) 253
3,040 (68.1%)
(53.1%) (48.3%)
Battery Packs will decrease sightly as a
share of total COGS due to falling cell
prices, but BMS will increase as a
share due to expected steady prices

14.0% BMS 1,468 (11.3%)

16.7% 10.7% 16.7% 4.5% 1.8%
0.0% Battery Chiller 70 (0.5%)
8.2% 0.0% 3.5% 4.4% Motor Controller 735 (5.6%)
6.9% 8.6% 6.9% 8.1%
5.0% 1.7% 1.7% Wiring Harness 876 (6.7%)

E2W E3W E4W LCV HCV

28 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis, Expert Interviews
 Nickel Metal Hydride
Despite the head start and maturity of the Lead Acid Battery technology, EVs are (NiMH) was used
currently dominated by Lithium Ion Batteries briefly in place of Lead
Acid Batteries but
Evolution of EV Battery Chemistry didn’t become popular
because they are
Cathode Metal Composition Current Usage Pros Cons expensive, discharge
faster & are inefficient
Lead Acid • Earliest battery used in • Affordable • Heavy at high temperatures
EVs • Readily available • Bulky
100% • At present, not used in • Non Durable
Pb EVs

Lithium nickel manganese cobalt (NMC) • Most widely used in • Higher energy density • Thermal instability
E2Ws (compared to LFP) & thus, • Dependence on cobalt
11% 54% 17% 18% • New chemistries with more driving range • Price instability of these
Li Ni Mn Co lower cobalt usage being elements
developed
Lithium nickel cobalt aluminium oxide (NCA) • Very rarely used in EVs • High energy density • Lowest safety as
in India • Swaps environmentally compared to other Li-ion
11% 84% 3% 2% • Popular in EV unsustainable Mn with Al batteries
Li Ni Co Al
powertrains in NMC batteries • Dependence on cobalt

Lithium ferro (iron) phosphate (LFP) • Widely used in • Long cycle life • Import dependence and
commercial vehicles • Better safety due to environmental concerns
7% 60% 33% • Gradual shift from NMC thermal stability around lithium
Li Ni P to LFP across all • Cheaper price (compared • Lower energy density
segments expected to NMC/NCA) compared to NMC/NCA

29 Confidential. © AVALON CONSULTING Source: RMI India, Niti Ayog, Avalon Consulting Research and Analysis

Note: Diagram is for representation purposes only and is not made to scale
 Even though new
chemistries are
Going forward, multiple technological developments are expected to reduce the expected to be
developed, LFP and
import dependence and increase safety and density of EV Batteries advanced NMC will
EV Batteries – Technological Developments dominate the market
at least until 2030
Cell Schematic Current Usage Pros Cons
Lithium Sulphur • Currently in R&D stage • Higher specific energy & power • Low cycle life and longevity
discharge compared to
Liquid
Lithium Organic Sulphur conventional Li-ion batteries
compound

Solid State • Currently in development • Safer due to non-flammable • Cycle life highly dependent
stage and not yet been nature of solid electrolytes on specific anode-cathode
Solid sulphide/ Li-based
Silicon
inorganic oxide (NMC, used in EVs • Higher energy density mix (currently less than
based • 1st use in EVs expected by compared to Li-ion batteries 1,000 cycles)
compounds LFP etc.)
2025
Aluminium Air* • JV of Indian Oil Corp. & • High theoretical energy density • Non-rechargeable, so
Aqueous/ Phinergy to provide Al Air • Not susceptible to thermal battery replacement
Aluminium nonaqueous Air batteries to OEMs like runaway stations need to be built
compound Maruti, Ashok Leyland • Abundant Al reserves in India out

Sodium ion • Currently in initial • Low material cost for sodium, • Bulkier than NMC batteries
commercialisation phase, more abundant and • Lower energy density
Aqueous/ Na based has not achieved scale sustainably sourced compared to Li-ion
Hard
nonaqueous layered • Can be transported in a fully batteries
carbon
compound material
discharged state without safety
risks
30 Confidential. © AVALON CONSULTING Source: RMI India, Niti Ayog, Avalon Consulting Research and Analysis Anode Electrolyte Cathode
*Lithium & Zinc Air batteries also in R&D
Note: Diagram is for representation purposes only and is not made to scale
India is completely dependent on imports for Lithium, Cobalt and Neodymium and
imports significant amounts of Nickel and Copper
Raw Material Imports

Recent discovery of
lithium reserves in
J&K might reduce
Material Produced in India Imported from Value of Import the import
dependence
USD 23 Mn (+ USD 1.2 Bn
Lithium No China/Japan
cells) - 2021

Cobalt No UK/USA USD 26 Mn (2021)

Norway, Canada, China,

Nickel Yes USD 1.04 Bn (2021)
Japan

USD 635 Mn (a lot of it is

Aluminium Yes China/USA
scrap)

Copper Yes USA, Saudi Arabia, UAE, Iraq USD 2.7 Bn (FY22)

Neodymium & Rare Earths No Mainly China NA

31 Confidential. © AVALON CONSULTING Source: Ministry of Commerce, Avalon Consulting Research and Analysis
EV Component Industry in India is at a nascent stage and OEMs expect higher
indigenisation and differentiated products and technology
Gaps in the Indian EV Components Industry

Expectations of Indian Automotive OEMs from EV Component Manufacturers

Setting up manufacturing facilities in India and increasing the local value addition so that OEMs can avail
Government benefits which are linked to minimum localisation content

OEMs are looking forward to minimal magnet usage or magnet-less technology in motors to reduce import
dependence since rare earth magnets are not found in India

OEMs are completely dependent on battery pack manufacturers for quality and subpar cell quality or lack of
protection within BMS leads to fire. Thus quality control and certification of cells are expected from battery pack
manufacturers

OEMs are seeking local suppliers of power electronics such as connectors, contactors, relays, DC-DC convertors
where there is no major challenge in localization except requirement for capital for R&D & setting up infrastructure

HV Wiring Harness is not easily found in India and has limited Indian suppliers. OEMs expect differentiated
products customised according to high Indian temperatures

OEMs are looking forward to good quality motor controllers produced indigenously and customised according to
the Indian environment
32 Confidential. © AVALON CONSULTING Source: India briefing, Avalon Consulting Research and Analysis
Indigenization is expected in all components – rapid indigenization is especially
expected for Motor Controllers, BMS and Chargers
Import Dependence
Expected Level in Import Dependence per Component (Component Value), 2023-28

Component E2W E4W E3W LCV HCV Comments

▪ Players like Comstar, Mahle
Motor already present
▪ Magnets to still be imp.
▪ Higher margins -> incentive
Motor
▪ Need to adapt for local
Controller ▪ Not as complex as BMS
▪ Already indigenized excl. cell
Battery
▪ Some cell manuf. expected
Pack (Log9 – started in April’23)
▪ PCB and Power Electronics
BMS (only microcontrollers / chips
Imp.)

On Board ▪ Local players exist but

Charger mostly relabel

HV Wiring
N/A N/A ▪ Already mostly indigenized
Harness

Almost completely import dependent Almost completely indigenized

33 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis, Expert Interviews
Almost all EV powertrain components are imported from China, but the share of Korean
imports in battery packs and power electronics is higher than in motors
EV Component Imports in 2021-22 (USD Mn)
<EV Component Imports by Category, 2021-21 (USD Mn, %)>
Battery Packs and BMS Chargers & Converters Motors and Controllers Total:
237 38 107 USD 382 Mn

95%

98%

100%

9 China
(4%) South Korea
0 Hong Kong
(0%) Japan
1%
0% Vitenam
0% 0%
0% 1%
0% 0% Others
0% 0% 0% 0% 0%
34 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis, Expert Interviews
The biggest EV components exporter from South Korea to India is LG Energy, mainly
through Li-Ion Cells for battery pack assembly
EV Component Imports in 2021-22 Korean EV Component Exporters – USD Mn by Supplier in 2021-22
6.35
South Korea – EV Component Exports to India (USD Mn, 2021-22)
2.51
LG Energy
Components USD Mn % Imports Hyundai
Edison Motors
Samsung SDI
Battery Pack and BMS 8.86 96.94%

0.18
0.01
Motor and Motor Controller 0.10 1.06%
Korean EV Components Importers– USD Mn by Importer in 2021-22
6.35
Converter 0.11 1.20%
2.51 Elentec Power
Hyundai Motor
Electricals and Harness 0.07 0.80% Navbharat Edison Motors
Exicom

0.18 0.11

35 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis, Expert Interviews
 Traditional Tier 1 players like Anand Group, Spark Minda, UNO Minda and Napino have diversified
into EV components through JVs, acquisitions and partnerships. Other large groups are keen to
follow suit
Timeline of Recent EV Related Activity Amongst Tier 1 Suppliers
2020-21 2021-22 2022-23
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Varroc Mar’21- Contract mfg. Apr’22- Divests 4W
agreement with Delta-Q lighting biz. in America and
chargers Europe to focus on EV
Aug’21- Partnership
Napino Aug’ 20 - Acquired 16% stake with Endenym Inc. to Apr’22- Partnership with
in Virtual Forest controller manufacture SRM EVR Motors for
manufacturing startup motors Trapezoidal RFPM motors

Apr’21 - License Dec’21 - JV with FRIWO for Nov’22 - JV agreement with

Uno Minda battery packs, drive, BMS Buehler Motor for traction motors
Agreement with AMP (USD 48 Mn for JV,EUR 15
Inc. USA for BMS Mn in FRIWO)
(for E2W and E3W)

Anand Mando Jul’21- JV with Mando for Oct’21 - Prod. Starts May’22- Capacity exp. To Jan’23 - Launched a new
motors and controllers Mar’22- 4K motors and500K units/yr. platform, Anevolve to develop
(USD 26 Mn) motors
2K controllers sold cleantech in India
Aug’21- Partnership with Jan’23 - Partnered to supply
LucasTVS 24M(USA) for Li-Ion cell mfg. 50,000 motors & controllers to
(10GWh, 2023) Sunlit Power

Spark Minda Feb’21 – Spark Minda Apr’21 - Partnership Oct’21 - 26% stake in EVQ Point (Charger) Oct’ 22- technical collaboration
Green Mobility with Ride Vision in Nov’21 – Acquired 49% stake in Minda Stoneridge with Daesung Eltec for ADAS
Incorporated Israel for ADAS (USD 32 Mn)

Endurance May’22- Acquire BMS

business from ION
energy (USD 18 Mn)

36 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research & Analysis; News Articles
There is no regulatory mandate in India but CCS chargers are gaining share in India
like Korea
Charging Standards

Region
Europe,
Current
Japan America rest of China
Type
world

AC

Plug J1772 J1772

CCS2 GB/T
Name (or Type 1) (or Type 1)

CCS 2
CCS 1 DC

GB/T
Plug
CHAdeMo Name
CHAdeMo CCS1 CCS2 C8/T

37 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis

Public charging infrastructure is set to boom with investment by several players
Public Charging Infrastructure

No of Public Chargers, ‘000

71

CAGR
+121% 45

25

6
3

2021 2022 2023 2024 2025

38 Confidential. © AVALON CONSULTING Source: EY Report, Avalon Consulting Research

 In Battery Packs, established battery players, Tier 1s and start-ups are jostling for
market share
Battery Packs – Competitors in India
Supplier Name Category E2W E3W E4W LCV HCV OEMs Supplied To
Spark Minda Auto-Components Manufacturer N/A
Anand Mando JV N/A
Napino Auto-Components Manufacturer N/A
UNO Minda Auto-Components Manufacturer N/A
Varroc Engineering Auto-Components Manufacturer N/A
Exicom Lead-Acid Battery Player Ampere, Piaggio
Electra EV Start-up / Recent Entrant N/A
Phylion JV Ampere
Bosch MNC Bajaj, TVS
Amara Raja1 Lead-Acid Battery Player N/A
Exide1 Lead-Acid Battery Player N/A
Log 9 Materials Start-up / Recent Entrant Hero Electric, OSM, EKA
Greenfuel Energy Start-up / Recent Entrant N/A
Trontek Start-up / Recent Entrant Okinawa
Sun Mobility Start-up / Recent Entrant Hero Electric, Piaggio, Ashok Leyland
Okaya Lead-Acid Battery Player N/A
BorgWarner MNC N/A
Tata Auto Components OEM Subsidiary Tata Motors

39 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis

Product Exists Product doesn’t exist Under Development
Note: Above competitors have existing products for the above components and vehicle segments, but may not be necessarily supplying to OEMs 1. Setting up automated pack assembly, product under development
Thus, the overall battery pack demand is expected to grow rapidly at almost 100% CAGR and
reach ~29.5 GWh in 2025-26 and subsequently grow at ~50% to touch ~152.3 GWh in 2029-30
Overall Battery Demand Growth (GWh)

Growth of demand for energy capacity in battery packs (GWh)

▪ Pack demand can vary based on EV adoption scenarios and

OEM
penetration of battery swapping. With high swapping
Replacement
penetration, demand can be higher
CAGR ▪ The Niti Aayog released the first draft of the Battery
+80.4% +54.9% Swapping Policy 2022 on April 21, 2022, to improve
172.3 interoperability and push for faster adoption of EVs in the
CAGR
29.1 two-wheeler and three-wheeler segment.
CAGR ▪ This segment has competitive prices compared to others. It
+103.9% also constitutes about two-thirds of vehicles registered and
can thus play a critical role in faster adoption of EVs.
143.2
▪ Cells account for ~65% of the cost and are imported
29.9
0.9 ▪ Thermal pads are also imported
0.9 29.1
0.9 0.0 ▪ All other components – copper harness, terminal, non-
FY21 FY26 FY30 reactive glue, outer casing can be produced locally

40 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis

 The Government has been actively focusing on promoting indigenous manufacturing
of EV battery cells
Cell and Battery Log9 commercially
launched indigenously
made li-ion battery cell,
will start catering to EVs
PLI ACC1 Allotment, GWh by H2 FY23
Upstream Supply Chain
• KABIL, a JV between 3 major public sector companies,
was set up to identify, acquire, develop, mine and
process strategic minerals overseas
Rajesh Exports 5
Lithium Reserve in India
Reliance New Energy Solar 5 • In Feb 2023, Lithium deposits were found in J&K which
could act as a catalyst in reducing prices of raw
materials of cells

Ola Electric 20
Ambition
• Indian Government has set a target to establish
manufacturing capacity of 50 GWh in cells by 2030
100% Foreign Direct Investment Allowed
PLI
Hyundai Global was also awarded 20GWh of capacity but • Production linked incentives outlay of INR 180 Billion
was later withdrawn as it was reported to not have any ties (~ USD 2.18 Billion)
with the South Korean automaker Hyundai Motor Co

1. ACC = Advanced Cell Chemistry

41 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis, Government Websites
Retro-fitment has many players, but the space is niche and evolving
Retro-fitment

Company Name Location Category

E-trio Hyderabad E4W
Loop moto Gurugram E2W & E4W
EV retron energies Hyderabad E2W& E4W
Cell propulsion Bengaluru E4W
RACEnergy Hyderabad E3W
Folks Motor New Delhi E4W
Volta Automotive Bengaluru E3W
Northway Motorsport Pune E4W
Motor Kit Ahmedabad E2W & E3W
Bosch – E4
GoGoA1 Navi Mumbai E2W, E3W & E4W
Zuink Retrofit Bengaluru E2W
RacEnergy Hyderabad E3W

42 Confidential. © AVALON CONSULTING Source: Avalon Consulting Research and Analysis

Currently, the entry initiation cannot be delayed as the industry is in the midst of a
huge growth spurt
Strategy for Korean Companies
Add OEM accounts and
grow
Develop supplier
ecosystem
Establish manufacturing
presence
Initiate marketing
with imports

Initiation Establishing Roots Branching Growth

Initial marketing to potential
partners and customers by
importing products / developing
products suitable for India in
home base
Greenfield, brownfield or JV to Deepen supplier ecosystem to Add more OEMs, diversify and
establish manufacturing achieve higher degree of grow
presence. KOTRA and Avalon localization
can help in partner search

43 Confidential. © AVALON CONSULTING Source: Avalon Consulting Analysis

Upcoming EV events to unite innovators, investors & industry leaders for ideation
and investing
Upcoming EV events
S. No. Name Date Venue About

India International EV 26th - 28th May Chennai Trade Centre, India’s largest gathering of EV Industry, coupled with the vast
1
Show 2023 Ramapuram opportunities and potential challenges of EV development

16th - 8th June
2 Green Vehicle Expo
2023
BIEC Bengaluru
Expo to promote “Made in India” campaign by showcasing EVs
International Exhibition
from all fields of 2/3/4Ws
Centre, Bengaluru, India

Conference will talk on automobile technology - from

21st - 22nd June Taj Yeshwantpur,
3 ET Auto Summit 2023 automobile softwarisation, new manufacturing technologies, to
2023 Bengaluru
sustainable tech innovations
The India E-Vehicle 7th - 9th Pragati Maidan, New Will showcase the latest developments and news from both
4
Show & BV Tech Expo September 2023 Delhi Indian and international companies in the EV sector

14th - 16th India Exposition Mart, International event for manufacturers to showcase their latest
5 EV India Expo
September 2023 Greater Noida, India products, equipment, and technology

6 India eMobility Show
7 Auto EV India
44 Confidential. © AVALON CONSULTING
11th - 13th Will provide convening space for regional & global EV players
KTPO Bengaluru, India
October 2023 to network and explore business opportunities
KTPO Convention World’s premier EV Auto & technology show. It showcases the
2nd - 4th
Centre, Whitefield, entire e-mobility ecosystem. Will help to identify numerous
November 2023
Bengaluru, India business opportunities in a hypercompetitive EV market
Source: Avalon Consulting Research and Analysis
 E Kotra
Chennai
Avalon Consulting
Mumbai

D
E-mail : kotra@chennaiktc.com E-mail : mumbai@consultavalon.com

New Delhi Delhi-NCR

E-mail : reception@ktcdelhi.net E-mail : delhi@consultavalon.com
Contact Us:

G
MINHYEONG LEE​
Director, Kotra
Bangalore Bangalore
E-mail : kotrabangalore9200@gmail.com E-mail : bangalore@consultavalon.com
ray.lee@kotra.or.kr
+91 98408 14159
+91 442847 2281 Mumbai Chennai
E-mail : kotra_mumbai@kotra.or.kr E-mail : chennai@consultavalon.com

E
SUBHABRATA SENGUPTA​
Executive Director, Avalon Consulting Kolkata Singapore
subhabrata.sengupta@consultavalon.com E-mail : kolkata@kotra.org.in E-mail : admin@apex-avalon.sg
+91 99100 12983
+91 88609 97677 (WhatsApp) Ahmedabad
E-mail : leese@kotra.or.kr