India is already seeing large companies like Tata and Mahindra fighting for EV market share. What would it take an EV four-wheeler startup to penetrate the market at this stage? The Mumbai-based PMV Electric is betting on creating an entirely new segment that identifies and meets certain unique requirements.
Speaking to Digitimes Asia recently, Kalpit Patel, founder and CEO of PMV Electric, explained that while the market is large and only larger players exist in the passenger car segment, his company is creating a new category of cars altogether called Personal Mobility Vehicle (PMV), purpose-built for everyday use.
"We are addressing a white space in this large segment to start with here in India," Patel said. "Also, we want to address the pain points of a set of consumers who are looking for a smart & sustainable alternative for their everyday travel requirements. Our USP is to offer a safe, sustainable & technology-oriented solution to help travel faster, smarter, and greener in the everyday use case of a personal car."
Significantly, the company is also looking at the export market as a big opportunity, due to the technology & cost structure available in India, compared to Europe or USA. Patel believes that a clearly articulated use case coupled with the right technology and affordable cost structures will help them carve out their market share.
What the Indian consumer wants
Given that PMV puts significant stress on customer requirements, Patel must have a clear understanding of the local market behavior. That the Indian consumer wants a stable and reliable product that is also cost-efficient may sound cliched, but the market is also seeing a growing number of users who are more concerned about the value than the cost.
"Indian customers have reliability, durability, and value for money as the cornerstone for their EV purchase," Patel said. "In the last year or so, many incidences in the 2-wheeler space have shaken the confidence of the consumers in India about EVs. So, customers expect these aspects while adopting relatively new technology like EVs. We must also understand that Indian customers have evolved over the last few years from being price-conscious to value-conscious."
Domestic market to see significant growth in 5 years
The current EV market is still nascent, particularly for the personal segment in the 4-wheeler space. However, the two and three-wheel segment has picked up well. The EV penetration in these segments will only grow from here at a much faster pace as better products and more alternatives enter the market. The commercial segment has also seen better traction due to higher utilization benefits associated with low operational costs.
"The growth potential is immense as it is expected that close to 30-40 percent of the overall vehicles will be converting into EVs in the next 5-7 years," Patel said. "Also, the opportunity as an export hub for the international market is immense owing to better engineering capabilities built over the last few years with better cost structures available in India."
But Patel is quick to point out that a few challenges must be addressed to build a sustainable growth trajectory. One of the critical aspects is the supply chain and sourcing of critical rare metals and battery materials which can be a significant roadblock as the demand for EVs explodes globally. For India, building alternative technologies that make it less dependent on imports of essential components, parts & raw materials is necessary.
Component sourcing
PMV plans to source most of its components locally in line with the Indian government's "Make in India and Make for the world" initiatives. All things related to powertrain, BIW, suspension steering, and other aggregates will be produced locally in partnership with advanced auto ancillary companies in India.
"The only parts we will have to import will be magnets for motors, cells for the battery pack & electronics chips, which don't have a manufacturing base in India yet," Patel added.
Partnerships to grow
It takes two to tango, and the relationship must be complementary, creating a win-win situation for both parties involved.
"The automotive business is a very complex one," Patel said. "All major auto OEMs depend on their partners for various aspects of the business, from product engineering to vendor partners for parts supply to distribution through channel and service center partners. Likewise, we will also be working with all such businesses that help us go to the market faster and allow us to be closer to our consumers."
