Chennai, Three A’s – affordability, availability and acceptance – are driving the growth of electric vehicles (EVs) globally and in India, he said. Emkay Global Financial services in one report.
According to the report, the government’s benign policy has increased the affordability quotient with reduced input costs.
Advancement in availability is due to increased EV model options for customers and expanding charging/manufacturing ecosystem. And customer acceptance is improving due to better aspirational value for electric vehicles and environmental awareness, Emkay Global said.
According to Emkay Global, the rate of electric vehicle penetration in India will be driven by two-wheelers and three-wheelers and buses.
The major vehicle manufacturers to benefit are TVS Motor ( TVSL ), Tata Motors ( TTMT ) and Ashok Leyland ( AL ) and in the case of component manufacturers a mind (mind), Motherson wiring (SUMI) i Samvardhana Motherson (SAMIL), said Emkay Global.
According to the report, sales of electric vehicles (hybrid and electric) rose 52 percent to about 10 million units, or 14 percent of global auto sales, in 2022. S ‘expect this penetration to rise to 25%/36% by June 30, based on the International Energy Agency’s (IEA) base case/bull case estimates, respectively.
In two-wheelers, EV adoption is likely to be faster, with sales penetration projected at 50% in CY30 versus over 25% currently.
For the Indian market, Emkay Global expects a notable increase in the share of electric two-wheelers/three-wheelers/buses/passenger vehicles from 2%/9%/10%/1% in FY22 to 46% /56% cent/55 percent/20 percent in FY30.
According to Emkay Global, TVSL is more aggressive in the EV space than its peers and would be a key beneficiary, with emphatic organic/inorganic efforts and better exposure to the expanding scooter segment.
“We expect the incumbents to maintain dominance in the electric vehicle era, given their strong brand image, aggressive R&D efforts, improved reliability and extensive sales and service networks; we model the new entrants to remain less than 15% of total electric two-wheeler sales by FY30,” the report noted.
As for Eicher Motors launching high capacity bikes like the bullet and others, will be relatively less affected by the transition to electric vehicles in the next 2-3 years.
In the case of electric cars and commercial vehicles, TTMT models are seeing strong acceptance and AL is witnessing large order gains in electric buses.
TTMT is poised to capture a higher market share in electric cars compared to ICEs, thanks to the first-mover advantage, in which models like Nexon, Tigor and tiago have witnessed strong acceptance. The upcoming pipeline is strong, with launches including Altroz, Punch, Sierra, Currv and Avinya in FY24-26, Emkay Global said.
TTMT has also been successful in E-Bus/E-LCV, with a backlog of over 2,700/over 39,000 units respectively. Also, AL is making inroads with a pending order book of over 2,600 units in E-Bus, and is slated to enter the E-LCV space with the launch of its Bada Dost model in 1HFY24.
The two vehicle makers are evaluating the sale of stakes in E-CV subsidiaries, which could unlock value, Emkay Global said.
In terms of the impact on accessories, companies with greater exposure to segments such as aluminum casting, wiring, lighting, tires and specific components for electric vehicles are likely to benefit from the transition to electric vehicles, due to increased content.
Suprajit Engineering should also have more content as the transition to electric vehicles would lead to better acceptance of new products such as electronic throttle, digital speedometers, actuators and braking systems.
Instead, content may be reduced for companies with greater exposure to ICE engines, transmissions, fuel injection, exhaust, lubricants and lead-acid batteries, which currently make up more than 40 percent of the component market.
“Within our universe, Exide Industries and Amara Raja are likely to be adversely affected unless they transform to embrace the inevitable transition to electric vehicles, which would see a return on equity in the early years,” Emkay Global said .
According to the report, the government’s benign policy has increased the affordability quotient with reduced input costs.
Advancement in availability is due to increased EV model options for customers and expanding charging/manufacturing ecosystem. And customer acceptance is improving due to better aspirational value for electric vehicles and environmental awareness, Emkay Global said.
According to Emkay Global, the rate of electric vehicle penetration in India will be driven by two-wheelers and three-wheelers and buses.
The major vehicle manufacturers to benefit are TVS Motor ( TVSL ), Tata Motors ( TTMT ) and Ashok Leyland ( AL ) and in the case of component manufacturers a mind (mind), Motherson wiring (SUMI) i Samvardhana Motherson (SAMIL), said Emkay Global.
According to the report, sales of electric vehicles (hybrid and electric) rose 52 percent to about 10 million units, or 14 percent of global auto sales, in 2022. S ‘expect this penetration to rise to 25%/36% by June 30, based on the International Energy Agency’s (IEA) base case/bull case estimates, respectively.
In two-wheelers, EV adoption is likely to be faster, with sales penetration projected at 50% in CY30 versus over 25% currently.
For the Indian market, Emkay Global expects a notable increase in the share of electric two-wheelers/three-wheelers/buses/passenger vehicles from 2%/9%/10%/1% in FY22 to 46% /56% cent/55 percent/20 percent in FY30.
According to Emkay Global, TVSL is more aggressive in the EV space than its peers and would be a key beneficiary, with emphatic organic/inorganic efforts and better exposure to the expanding scooter segment.
“We expect the incumbents to maintain dominance in the electric vehicle era, given their strong brand image, aggressive R&D efforts, improved reliability and extensive sales and service networks; we model the new entrants to remain less than 15% of total electric two-wheeler sales by FY30,” the report noted.
As for Eicher Motors launching high capacity bikes like the bullet and others, will be relatively less affected by the transition to electric vehicles in the next 2-3 years.
In the case of electric cars and commercial vehicles, TTMT models are seeing strong acceptance and AL is witnessing large order gains in electric buses.
TTMT is poised to capture a higher market share in electric cars compared to ICEs, thanks to the first-mover advantage, in which models like Nexon, Tigor and tiago have witnessed strong acceptance. The upcoming pipeline is strong, with launches including Altroz, Punch, Sierra, Currv and Avinya in FY24-26, Emkay Global said.
TTMT has also been successful in E-Bus/E-LCV, with a backlog of over 2,700/over 39,000 units respectively. Also, AL is making inroads with a pending order book of over 2,600 units in E-Bus, and is slated to enter the E-LCV space with the launch of its Bada Dost model in 1HFY24.
The two vehicle makers are evaluating the sale of stakes in E-CV subsidiaries, which could unlock value, Emkay Global said.
In terms of the impact on accessories, companies with greater exposure to segments such as aluminum casting, wiring, lighting, tires and specific components for electric vehicles are likely to benefit from the transition to electric vehicles, due to increased content.
Suprajit Engineering should also have more content as the transition to electric vehicles would lead to better acceptance of new products such as electronic throttle, digital speedometers, actuators and braking systems.
Instead, content may be reduced for companies with greater exposure to ICE engines, transmissions, fuel injection, exhaust, lubricants and lead-acid batteries, which currently make up more than 40 percent of the component market.
“Within our universe, Exide Industries and Amara Raja are likely to be adversely affected unless they transform to embrace the inevitable transition to electric vehicles, which would see a return on equity in the early years,” Emkay Global said .
