Summary | State of EVs in India

My understanding on the Blume primer and a small case study on Log9, it’s conquest to improve india’s EV infra.

EV Types and Brands:

2 Wheelers: Ather, Yulu, Revolt

• TCO became positive in 2017–18, thanks to government subsidies.
• Continuous cost reduction; TCO remains positive in 2023 even without subsidies.

3 Wheelers: E-Rickshaw, Euler, Mahindra

• Remarkably, 85% of new 3 wheeler sales are electric vehicles (EVs).

4 Wheelers: Nexon, buses

• 85% of new bus sales are EVs; TCO already positive.

Total Cost of Ownership (TCO):

• Cost of ownership include down payment, car cost (major expense in EVs), insurance, energy (major expense in ICE vehicles), maintenance, registration, and interest.
• EVs have simplified manufacturing processes, leading to more brands and innovative subscription models.

Projected EV Growth by 2030:

• Expected 12 million EVs and nearly a million cars on the road.
• TCO may be 0–60% higher for ICE vehicles in 5 year span.
• FAME 2 subsidy has made EVs TCO positive.
• Anticipated cost reduction of buying EVs by half in the next decade.

Key EV Components:

• Battery pack (35–50% of car cost) — Lithium-ion dominant but moving toward safer Sodium-ion batteries (e.g., BYD’s Blade Battery).
• Motor (10% of car cost).
• Powertrain — controls energy flow from the battery. Powertrain optimizes energy usage based on acceleration.
• Inverter — converts current between AC/DC.

Battery Challenges:

• Battery degradation, temperature sensitivity, and limited mileage.
• Tesla’s batteries maintain health with cutting-edge software/hardware, they source components directly to reduce costs of supply and have higher resale value.
• Battery Management System (BMS) monitors and manages battery functions.

Safety Measures and Regulations:

• Battery related incidents have raised safety concerns; AIS-156 certifications expected from government.
• Battery prices decreasing; electric motors are getting easier to maintain and produce in large scale as assembly lines are simpler than ICE but poses threat to businesses in terms of lower barrier to entry.

Business Challenges:

• Challenges include vehicle quality, component availability, charging infrastructure, and financing such as low-cost loans as provided by IDFC (5% for Ather).
• PLI and FAME 2 subsidies encourage manufacturing in India.
• Charging solutions: Majority of chargers are slow in the charging network of India, Fast chargers are costly to set-up as it requires connection with electricity grid (FAME 2 incentives bring cost down), most charging is done in home/office, emerging small charging operators are creating a better network, battery swapping stations are coming more & more which are better for fleet-owners for services like Yulu-Swiggy/Zomato, and banks will soon start offering EV loans.

Opportunities:

• OEMs can excel in software development and personalized user experiences which they did not focus till now, EV owners will prefer both software/hardware features before choosing an EV.
• Low assembly costs create entry opportunities; competition will drive prices down.
• Focus on efficiency, thermal management, and charging control to enhance battery and tire efficiency.

Opportunities to disrupt in the EV OEM Value Chain

Branding, distribution, and after sales service are key to winning customers’ loyalty.

Two OEM Approaches:

• Everything built In-house (iOS-like) or component-based (Android-like) manufacturing.
• Successful OEMs focus on sales, distribution, marketing, and software.

Software Functions:

• Telematics — cloud-based vehicle control, usage data, security, and emergency services.
• Media — entertainment services like Netflix, music, and games.
• GPS/Navigation.

Distribution Channels:

• Dealerships — multi-brand stores.
• Online channels — software-driven sales.
• Charging station aggregators — expanding charging infrastructure.
• Battery recycling — extracting value from used battery packs.

Case Study: Log9

The global automotive landscape is rapidly evolving, with one in seven cars now being electric vehicles (EVs). However, in India, the focus has been predominantly on two-wheelers, accounting for over two-thirds of the market. By 2030, India is projected to have two crore EVs on the road, marking a 12-fold increase from 2023. Despite this growth potential, India faces challenges such as reliance on other countries for battery cells and a lack of EV charging infrastructure, which hinder consumer adoption.

Log9 is poised to address these challenges by pioneering the development of India’s own lithium-ion batteries. Currently, 40–50% of an EV’s cost is attributed to the battery pack, and importing batteries further escalates prices. Even companies manufacturing EVs in India often source key components from China, which is a significant global player in the lithium supply chain.

While India possesses ample lithium resources, they have not been extensively tapped for EV purposes. Establishing a local EV battery supply chain is a complex undertaking, but Log9 has taken a significant step by importing lithium and processing it into battery cells optimized for Indian tropical conditions. The company boasts a manufacturing capacity of 50 milligrams per hour watt, with an annual output of 8,000 three-wheeler lithium-ion batteries. Three-wheelers account for a substantial portion of Log9’s business, capturing 62% of the market share in the EV two- and three-wheeler segment. It’s current valuation is around $250 Million, fresh funds from recent series B round.

Remarkably, no Indian two, three, or four-wheeler company currently manufactures lithium-ion batteries in India; instead, they rely on imports. Log9’s batteries stand out for their safety, being AIS156 certified and incorporating advanced technology compared to conventional alternatives. Offering competitive prices, Log9 has become a market leader in the three-wheeler segment and has secured significant partnerships, including a major deal with Omega Seiki Mobility for their three-wheeler fleet. Other notable customers include Revo & 3Eco, Quantum, and Log9, which launched a two-wheeler with the fastest charging capacity. For four-wheelers, Log9 has partnered with Northway Motors.

While Log9’s presence in the two-wheeler market is just beginning to take shape, their initial focus was on obtaining certification, which took considerable time. Looking ahead, they plan to deploy more than 4,000 EVs in partnership with Hala Mobility, Whizzy, and Fae Bikes. However, India’s charging infrastructure still lags behind, with approximately 11,000 public charging stations compared to 130,000 in the United States.

Log9 has also collaborated with Instacharge, leveraging Pulse Energy API to create a platform where any Charging Point Operator (CPO) can list their charging station locations. This platform facilitates seamless collaboration between EV owners, CPOs, and fleet operators. EV owners using charging stations on the Instacharge platform can conveniently scan QR codes and make payments through UPI, including WhatsApp which is the first of it’s kind leveraging tech provided by WATI.

In addition to their technological innovations, Log9 has forged strategic partnerships, such as with Amara Raja (with a 15% ownership stake), which brings valuable industry connections and synergies. Their collaborations extend to sectors like buses (e.g., Eks), three-wheelers (e.g., Indeanta, Lets Transport, and FYN Mobility), and financing (with partners like 3 Wheels United and Eqaro). Log9 offers financing options, unlimited kilometer warranties on batteries for up to six years, and a buyback option at 1.2 lakh rupees. The company also provides maintenance and servicing for EVs.

Log9’s tripartite approach encompasses batteries (including TIB, RapidX, and LFP Cells), Instacharge for charger discovery and maintenance, and various services related to financing EVs. Their future expansion plans include targeting the energy storage sector under the Zapp Up umbrella.