The Electric Vehicle sector globally has been mainly focused on passenger cars and replacing the internal combustion engine domination. Several factors including climate change, and the ban on IC engine manufacturing by several countries have exacerbated this trend further. The Indian EV market is dominated by 2W and 3W which is possibly unique to the country. Several publicly listed companies have forayed into the sector with their investments. We believe that the unlisted sector is primed to compete and perform, considering both investments and progress made by the OEMs. The EV sector reports relies on infrastructure and a manufacturing base to support both production and ongoing services to the sector.
In the 2 reports, we just released on privatecircle.co, we keep our focus on the unlisted EV players both OEMs and Infrastructure and Component players. This post is an introduction to the reports, and we encourage you to download the reports for more details.
We mostly rely on our own privatecircle.co platform data. Our coverage is limited to unlisted players who are incorporated as private limited companies. We selected the OEMs based on their registration data from the VAHAN database that is now openly available, of these two we only concern with 2W and 3W players. We picked 40+ companies from our database that operates in the electric vehicle components/ infrastructure space.
Adoption of EVs
Three-Wheeler (T) EV adoption stands at 48% and it is likely we will have more EVs registered in this category this year than all other fuel types put together. Whereas the Two-Wheeler (NT) here only covers the high-speed models (above 25 kmph) that require registration. 2W EV adoption is only beginning and is already at ~ 3% (3X growth in 1 year) and is likely to show some major adoption in 2022.
Registrations of EVs across the country
State-level tariffs and subsidies play a major role in the adoption and we see signs of secular adoption countrywide.
EV registrations are on a clear exponential curve. Till March 31, 2022, many OEMs have sold more vehicles than for the entire year of 2021. Bumper 2022 is in the offing if supply chain and fire/safety-related issues do not persist (particularly on semiconductors and batteries).
2W OEMs
2W OEM space is dominated by Hero. Ola is growing fastest and has already become the second highest selling after Hero in 2022, the effects of recent fire incidents and the overall perception may have some impact downstream, at the time of writing this report they were not material. Some of the other heavily funded 2W OEMs like Simple Energy are yet to release vehicles into the market.
After Hero, the next in line is less than half its revenue. We believe this will change in 2022 with Ola Electric’s numbers. The highest growth among the top 5 includes Pur Energy, Ather, and Ampere. In the mid-sized OEMs, Komaki and Jitendra are growing at a rapid pace. EBITDA margins are still negative or not substantial for most of the OEMs. Loss leaders include Ather, Revolt, and Nexus.
The report also covers the three main listed company deals in the unlisted EV OEM space by Hero, Greaves, and TVS. Such investments have also led to disproportionate returns. Among these Ultraviolette is yet to release its EV into the market although the initial launch presentations happened back in 2019. This clearly indicates manufacturing capability is not to be taken lightly.
Ola Electric has cornered much of the funding in recent years. The current Ather deal that was announced in May 2022 is not included in this reporting. Such a funding scenario also shows the investor betting on the aggressive leaders. This also leaves the other early-stage players dry, especially the ones who do not have manufacturing capacity planned. Revolt is an exception here.
3W OEMs
3W OEMs is a lot more crowded; surprisingly, there is not much real action in this. Also, many 3W OEMs remain proprietorship/partnership companies.
Terramotors leads with its revenues, but Jezza and JS Auto are not far behind. As the adoption in 3W started earlier, the 20-30% 2-year CAGR in the past year is remarkable among Terra, Jezza, and Bestway. 3W OEMs seem to be doing better on the EBITDA front when compared with 2W OEMs. Even then investor interest seems low on the 3W side.
LMV OEMs
Tata Motors dominates the LMV EV OEMs, with the second-in-line MG Motor much behind. We think this will change as the infrastructure develops and more options become available to consumers.
EV Components and Infrastructure Companies
We believe the EV components and infrastructure story is far more interesting to follow, primarily because of the different models that are being tried out.
Feel free to download these reports from https://privatecircle.co to see additional details on revenue productivity, growth, and investors.