TVS Motor Aims to Double Electric Vehicle (EV) Production in FY24 through Fresh Launches

TVS Motor Company is gearing up to achieve an unprecedented milestone by rolling out over two hundred thousand electric scooters within the current fiscal year. 

A high-ranking executive shared this information during the unveiling of TVS’s inaugural electric scooter, the TVS X, in Dubai. This launch is strategically aimed at capturing the attention of a new segment of buyers.

Sudarshan Venu, the Executive Director at TVS Motor, stated, “Starting from August, we are accelerating the production of the existing EV scooter, iQube, by an additional 25,000 units per month. Furthermore, the introduction of novel electric scooter models will contribute to our overall EV production growth.”

Holding a 22% market share as of July, TVS Motor stands as India’s second-largest two-wheeler EV company, trailing only behind Ola Electric. The company has invested nearly Rs 250 crore in the development of the TVS X model. 

For the current fiscal year, TVS Motor anticipates capital expenditures ranging between Rs 900-1,000 crore, with a significant portion allocated to EV product development. 

According to Vahan data, the company sold nearly one hundred thousand EV scooters in FY23, along with 47,102 units during the initial four months of the current fiscal year in India.

Venu expressed, “The expansion of our EV product lineup is enabling us to broaden our target consumer base. We anticipate that our share in the EV scooter market will double over the next two years.” He envisions that EV scooter adoption in India will reach 30% by 2025.

Venu remains confident that the surge in EV production will not adversely impact the company’s double-digit profit margins. “iQube has consistently maintained a positive gross margin. The newly introduced TVS X model won’t be eligible for the FAME subsidy due to its price point, ensuring a positive gross margin right from its inaugural production batch,” Venu affirmed. 

The Faster Adoption and Manufacturing of Electric Vehicles (FAME) subsidy scheme was initiated by the government in 2019 to bridge the price gap between conventional and electric vehicles.

TVS Motor has sustained a double-digit operating margin prior to depreciation and amortization (EBITDA margin) for eight consecutive quarters up until the June 2023 quarter. The most recent quarter saw a record EBITDA of Rs 8,000 per unit.

With both the domestic and export markets in its sights, TVS Motor’s plans encompass an annual production target of approximately 30,000 TVS X units, facilitated by a daily capacity of 100 scooters. Venu revealed, 

“We have already introduced an EV scooter in Nepal. With the latest launch of the TVS X, we are setting our sights on new markets like Europe and Latin America, in addition to our existing export destinations.” Exports constituted a quarter of the company’s total volume in FY23.

The Shift, EV’s

As the global marketplace sees a profound shift toward electric vehicles, likewise, the Indian automotive industry is undergoing a shift and a dynamic expansion of the electric two-wheeler segment. Once considered a niche market, electric two-wheelers are now emerging as a compelling and sustainable solution to the challenges faced by traditional internal combustion engine vehicles. 

This shift is driven by various factors, ranging from governmental initiatives and environmental awareness to technological advancements and changing consumer preferences. 

Hence, with the trend, the two-wheeler electric segment in India is similarly experiencing a remarkable upswing, driven by a convergence of factors reshaping the mobility landscape. 

Here’s how the electric two-wheeler market is expanding in India

Government Initiatives and Policies

 One of the primary driving factors is the Indian government’s push for sustainable transportation solutions, which has been a pivotal driver for the electric vehicle (EV) market’s growth. 

Initiatives like the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme have provided incentives and subsidies, making EVs more accessible and attractive to consumers. Besides, regulatory mandates have been implemented to encourage a transition to electric mobility.

Environmental Awareness

As concerns about air pollution and climate change mount, more Indian consumers are seeking eco-friendly alternatives for their transportation needs. Electric two-wheelers offer a cleaner mode of commuting with zero tailpipe emissions, aligning well with these environmental concerns.

Reduced Operating Costs

Electric two-wheelers have significantly lower operating costs than their internal combustion engine counterparts. Electricity is generally cheaper than gasoline, and EVs have fewer moving parts, reducing maintenance expenses over the vehicle’s lifespan.

Advancements in Technology

The electric vehicle industry has witnessed substantial technological advancements, particularly in battery technology. Lithium-ion batteries, which power most electric two-wheelers, have become more energy-dense, allowing for longer ranges and improved performance.

Rising Fuel Prices

Escalating fuel prices has a direct impact on consumers’ budgets. Electric two-wheelers offer a cost-effective alternative by utilizing electricity, which is comparatively more stable in terms of pricing.

Urban Congestion and Last-Mile Connectivity

Electric scooters are particularly well-suited for navigating congested urban environments and providing efficient last-mile connectivity. They are maneuverable, lightweight, and offer easy parking options.

Increased Manufacturer Focus

Many established and new players in the Indian automotive industry are recognizing the potential of the electric two-wheeler market. This has led to an influx of electric models with diverse features and price points, catering to a broader range of consumers.

Infrastructure Development

Charging infrastructure, while still in its nascent stage, is expanding across Indian cities. Charging stations at various public places and private establishments are gradually becoming more accessible, addressing range anxiety concerns among potential EV buyers.

Consumer Acceptance

As more electric two-wheelers hit the roads, consumers are witnessing their practicality and performance firsthand. Positive word-of-mouth and growing familiarity are contributing to a shift in consumer perception towards electric vehicles.

Financial Incentives

In addition to the central government’s incentives, some state governments are offering additional benefits such as lower road taxes and registration fees for electric vehicles, making them more economically viable.

Hence, the electric two-wheeler segment in India is undergoing a transformative journey. With the confluence of government support, environmental consciousness, technological advancements, and changing consumer preferences, electric two-wheelers are poised to become an integral part of India’s transportation ecosystem. As infrastructure and technology continue to develop, the electric two-wheeler market will likely experience sustained growth in the coming years.

The Last Bit, As India helms the crossroads of environmental consciousness, technological innovation, and economic development, the electric two-wheeler segment stands as a beacon of change and progress in the automotive industry. 

The surge in popularity of these vehicles, driven by government support, heightened environmental awareness, and advancements in technology, signifies a promising shift towards a more sustainable and efficient mode of transportation.