India's EV market is set for massive growth: Hero Electric MD Naveen Munjal

Will electric mobility truly seize the moment in India? If so, what’s the main reason for it? Is it the push by the government or have consumers become more conscious about clean mobility? Will the entry of Ola lead to a price war in the EV segment? In a conversation with Business Standard’s Arindam Majumder, Hero Electric Managing Director Naveen Munjal answered these and many more such questions on the present and future state of electric mobility in India. Here are the highlights of the Q&A:

Why is this the moment for electric mobility in India? What has changed?

• We came in too early; some things worked, a lot didn’t

• Now, things are falling into place

• Central govt on board, state govts pushing subsidies, finances coming

Do you think customer perception has changed in favour of EVs, or is it the govt push that is driving growth for EVs? 

• It’s a culmination many factors

• Govt policies are a huge driver

• Battery prices declined steadily, battery tech improved

• Some states coming up with policies to increase demand

• Environmental concerns also driving EV growth

• Covid-19 has made people wary of public transport

What is your reading of the govt’s PLI scheme for the automobile industry? 

• Govt intent clear: It wants to push electric mobility and zero-emission vehicles

• Any policy evolves with time, corrective action is taken periodically

• The policy will create a very vibrant EV ecosystem

The entry of Ola has led to a price competition in the sector. Will we see prices falling further?

• Prices down due to state subsidies being passed on to customers

• We are maintaining our margins and don’t plan to get into a price war

• Responsible companies know they don’t want to get into a price war 

• Prices gradually come down as the ecosystem scales up

Hero Electric is the market leader in the segment. What are your expansion plans?

• We are not able to meet the demand yet, want to scale up own manufacturing

• By mid-2022, we will expand manufacturing capacity 5x to 500,000 units

• Will add a million units to capacity every year for the next 5 years

• We have 700 dealer touchpoints; this number will go up

• Online sales, service network, charging stations will all increase

How has investor perceptions of India’s EV ecosystem changed? 

• Perception has changed hugely

• Those who chose not to invest a few years ago are now pursuing us

• The growth in the EV ecosystem is going to be rapid. Those not participating as investors, OEMs, or supply chain players will miss out

How will Hero Electric deal with competition from conventional ICE-engine players which are now entering the EV market? 

• More competition better for the customer, will grow the industry

• Last year around 150,000 units were sold. We anticipate this industry to be about 4 million units by around 2026

• Not fearful of competition, we welcome it 

Do you think the government should put a sunset clause for ICE vehicle manufacturers?

• Targets are required

• Without aggressive targets, it’s a very open-ended game