Can Green Mobility India enter the electric vehicles segment?

Green Mobility India Pvt Ltd is a wholly-owned subsidiary of a renewable energy giant and was established to launch electric vehicles in India. The core team that worked on this project did a lot of work on EVs and their potential in India. With investment and technology ready for electric passenger vehicles, the team approached the board to approve the plan. However, the board sent back the team to engage a good consulting firm to study the market very well, given the marked change in scenario between EVs in Western countries and India and also given the change in ground realities over the years. There are many factors that the board felt needs to be considered before representing the project document.

The board felt that the conditions abroad that have helped the penetration of EVs is different from India, especially when you consider the charging infrastructure and the availability of space for public charging facilities as well as the subsidy environment, which has changed since the initial years. And also the competition, which is not only from the existing automobile manufacturers, but also from the new entrants.

The EV team has approached you as a consultant to answer questions that would help them decide whether, it is still viable to go ahead with the EV project or just drop it. Or look at Hybrids or Hybrid-EV combinations.

The EV Market

The Indian electric vehicle (EV) market is experiencing rapid growth, with the 4-wheeler segment showing promising signs. In 2024, electric car sales increased by 20 per cent, reaching nearly 100,000 units, which is about 2.4 per cent of total passenger vehicle sales. The overall EV penetration in India’s vehicle market is around 8 per cent, up from 6.8 per cent in 2023. India’s total EV sales, including three and two-wheelers, crossed two million units in 2024, a significant milestone.

However, India has an ambitious projection to sell 20 million EVs (all categories put together) for the year 2030. Just to get an idea of the enormity of this growth, the passenger vehicles market for EVs will have to grow from just 0.55 lakh in the year 2023-24 to 14 lakh in the year 2030. Some 28 times in six years.

Currently, all passenger vehicles put together the country add up to 3.8-4.0 million per annum. And the passenger vehicle market (of new vehicles) is expected to grow at a CAGR of approximately 9 per cent in the next 5-7 years thereby increasing this market to approximately 6.5 million vehicles by 2030. The country therefore expects to sell 22 per cent of all passenger vehicles in 2030 as EVs.

While this is achievable theoretically, various factors will be responsible for keeping this growth going. Some of the key factors being:

1. The pace at which the public battery charging infrastructure grows. India has barely 12,100 public charging stations currently. And even if we look at one charger per 40 vehicles, we would need a staggering 1.32 million charging stations by 2030. Which means, we will have to add 4 lakh charging stations every year from now on. Will the charger and battery Industry keep pace? One of the key constraints in India is the space for putting up charging stations. It is not feasible still to have more than a few charging stations in large apartments. Very little space for public charging stations is available.

Though the requirement could reduce with the charging speeds increasing and the time for full charge coming down drastically, the real progress and feasibility is still very hazy. China and its strategy in the battery market will hugely impact the Indian market for next 10 years at least.

2. The cost of ownership of EVs: Currently the cost of EVs is even higher than the hybrids and much higher than the regular petrol or diesel vehicles. Will these costs come down for mass adoption? Or, will only the top income bracket convert?

3. Subsidy and government policy will determine the cost of vehicles and the charging cost. For example, with FAME II subsidies withdrawn, the two-wheeler market saw a steep decline for a few months, though it has started picking up again. Again the power per unit charged to the EV chargers is at a subsidised rate. How long will the government subsidise these and hence what would happen to the economics of owning an EV over the years?

4. What would be the consumer preference over a period of time? Would they go for pure electric car with a max range per charge of 250 kms? Or would they go for a hybrid? And, if hybrid, what kind of hybrid would it be?

5. Will the trends in the Western countries be a benchmark for India?

6. Finally, will alternative green power come in fast enough for the increasing charging load or will the country burn more coal to generate power to charge EVs.

Technical Facts of EVs:

What is a Hybrid Car?

Hybrid cars are powered by two engines: one petrol, one electric. Both work with each other to spin the wheels. This leads to lesser petrol being burned and therefore better fuel efficiency. When compared to conventional vehicles, hybrids offer better power and fuel efficiency as they combine the benefits of high fuel efficiency and low emissions. When hybrid vehicles are cruising or while braking, the result is excess power which is used to charge the batteries. This, in turn, aids higher fuel efficiency or range.

How Do Hybrid Electric Cars Work?

Popularly referred to as hybrid cars, Hybrid Electric Vehicles (HEVs) draw power from an internal combustion engine (petrol engine) and at least one electric motor. Read on to know more about how hybrid electric cars work.

Hybrid Vs. Electric Cars:

The main difference between a hybrid car and an electric car is that the hybrid combines an internal combustion engine and electric motor(s) to send power to its wheels. However, the electric car draws power from a single source of the electric motor(s) to propel the vehicle.

While hybrid cars offer better fuel efficiency or longer distances/ranges, electric vehicles are still yet to reach that potential. That said, electric vehicles emit lower emissions compared to hybrid cars which are dependent on an internal combustion engine.

Types of Hybrid Cars:

Automobile companies use different hybrid designs to either achieve maximum fuel efficiency or to keep the hybrid car prices as low as possible. Below are the different types of hybrid cars:

1) Parallel Hybrid:

In the most popular or common hybrid design, the parallel hybrid combines both electric and internal combustion engines to power the vehicle. They can run together or can be used as the primary power source while the other kicks in when extra power is required such as a hill climb, overtake a vehicle, and so on. Both power sources are parallelly connected to the gearbox or the transmission and hence they are called “parallel”. An example of Parallel Hybrid Cars is the Toyota Camry, Honda Accord, Toyota Prius, Hyundai Sonata.

2) Series Hybrid:

Under this type of hybrid car, the Series Hybrid also employs both the petrol internal combustion engine as well as the electric motor. However, the internal combustion engine does not propel the car, instead it generates electricity to recharge the battery pack. The battery pack in turn powers the electric motor(s) which in turn sends power to the wheels. An example of a Series Hybrid car is the BMW i3, Kia Optima, Ford Fusion, Chevrolet Volt.

3) Plug-in Hybrid

The Plug-in Hybrid elevates the conventional hybrid car with a much larger battery pack that requires to be charged. Generally, it uses an 110-volt electrical socket to charge the battery pack similar to an electric car. Since the Plug-in Hybrid car does depend on an internal combustion engine and can be run after it is fully charged, there is substantial improvement in the vehicle’s fuel efficiency. An example of a plug-in hybrid car is the BMW 330e, Hyundai Ioniq Plug-in Hybrid, Volvo XC40 Recharge Plug-in Hybrid.

4) Two-Mode Hybrid

This type of hybrid design operates in two different ways. While on the first mode, it works just like a regular hybrid car. In the second mode, the design can adjust to different requirements by the engine to meet specific vehicle tasks.

5) Mild-Hybrid

In recent times, the cost to build an efficient hybrid car continues to be high. Car companies are devising new strategies in offering hybrid technology to the common man. Mild-hybrid designs have been adopted by car companies to adhere to emission norms as well as to slightly improve fuel efficiency without increasing the cost considerably. In this type of hybrid, the electric motor assists the petrol engine in increasing fuel efficiency, improving performance or both. Additionally, it acts as a starter for the automatic start/stop function, which switches off the engine when the vehicle comes to rest and thereby reduces the use of fuel. An example of mild-hybrid cars include Maruti Suzuki Ertiga, Ciaz, Baleno.

Advantages and Disadvantages of Hybrid Cars vis-a-vis Electric

Hybrid cars may be a stepping stone before the automobile industry moves into pure electric vehicles. So, understanding the pros and cons of hybrid cars will help you understand the technology.

Pros & Cons of Hybrid Cars:

• Emission: Compared to the internal combustion engine, hybrid cars employ both electric and internal combustion engines. The result is reduction in emissions and is environmentally friendly. However, compared to EVs their emission is higher as EVs have no tail pipe emission at all

• Fuel Dependency: Hybrids use electric power till a certain critical level of battery is reached and then it automatically switches to fossil fuel. Hence much less fossil fuel consumption. Hence their range is not limited by availability of a charging station.

• Smaller and Efficient Engine: Smaller engines don’t have to power the hybrid car alone since there is an electric motor. Also, petrol engines used in hybrid cars are smaller in size and comparatively fuel efficient. In contrast, the electric vehicle is very heavy, primarily because of the weight of the battery pack

• Regenerative Braking: Every time the brake is applied in a hybrid vehicle, the electric generator generates electricity and recharges the battery. This eliminates the need to stop the vehicle to charge the battery pack. Therefore a hybrid car does not need any plug in, except for plug-in hybrids

• Cost and Maintenance: Hybrids cost more than regular petrol or diesel cars, but cost much lower than electric vehicles. These vehicles are more expensive to maintain though compared to both fuel and electric vehicle due to more moving parts. However, life of a battery in electric cars is still a variable. Every day better technologies are coming in to improve efficiency. But replacement of battery in an electric car is almost 25-30 per cent of the car price

Some Battery Facts:

• A typical electric car battery (60kwh battery) takes about 8 hours to charge fully from zero charge with a 7kw charging point.

• Rapid charging batteries are being introduced by EV manufacturers that can be charged much faster with higher kw charging points. This will reduce the number of charging points required.

• L1 and L2 chargers use AC supply which gets converted to DC by an onboard converter before it reaches the battery.

• L3 and L4 are fast chargers and here the charging station has an AC to DC converter and the vehicle receives DC power directly

• L3 chargers can provide full charge to a typical vehicle in 40 mins by using an 80 kw charger

• L4 chargers can provide full charge in just 25 mins by using a 120 kw charger.

• However these chargers have still not become popular for cost and operational reasons, including the cost of the batteries that can take this type of charge

Investment in Plant and Machinery

• Investment in setting up and running a manufacturing set-up for any type of car is similar.

• Only variable being the manufacturing capacity and extent of automation.

• Most car companies do not manufacture the components. They essentially assemble the components procured from various vendors.

• You may obtain data on the investment requirements for setting up electric car/SUV plant from secondary sources depending upon the capacity you choose

Competition

• Competition is pretty intense from the existing automobile manufacturers, entering hybrid or EVs.

• The existing companies enjoy a distinct advantage of their brand recall and therefore less promotion expenses

• While Tata Motors is heavily leaning towards EVs with various models, a player like Honda is still playing safe with a hybrid car first. And then there are players like Hyundai, Toyota, Suzuki, which are looking at both the versions. BYD is another player which has made big strides in the EV market.

• Players like Tatas are also investing in charging stations for helping the penetration of their products, given that they are the largest EV seller in India.

• All electric passenger vehicle manufacturers put together are spending upwards of Rs 3,000 crore on promotions

• And experience shows that a new player with no presence in the automobile sector will need to have three times SOV (share of voice) to garner the same market share as the existing players.

• As the EV industry is still nascent, the dynamics are changing rapidly and most of these players will rapidly change their portfolio and adopt more current technologies, thereby causing the early vehicles to become obsolete very fast.

• Same will be the case with chargers and charging stations and batteries.

The Task for You:

You are part of a consulting company that has huge knowledge in the EV area and your task for the planning team is to make a 5-year business plan.

It goes without saying that they would need to consider all the dynamics of the industry, including how long will the government support through subsidies.

The team would need to present:

1. The dynamics and therefore qualitative and quantitative inputs on go/no go – based on your study you can even recommend that the company not to go ahead with EVs, but with proper justification.

2. Real impact of the EVs on the environment considering cradle to grave impact vis-a-vis ICEs and Hybrids.

3. Understanding consumer preference from secondary sources and hence projecting the market scenario for five years.

4. Projected progress of charging infrastructure and its impact on penetration of EVs.

5. The business plan if it feels the company should enter the field as in Annexure 6.

Note: While all the data has been kept as close to real life as possible, the case author does not claim authenticity of the figures as the data has been created purely for the purpose of creating a case study.

Published on May 29, 2025

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