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BNC Motors transforms the EV scape in India
Interviews- Jul 24,24
As more and more customers transition to EVs, we are seeing that the technology evolution is being shaped by customer preferences.
The electric vehicle (EV) industry in India is experiencing a period of dynamic transformation, driven by technological advancements, evolving customer preferences, and supportive government policies. Anirudh Ravi Narayanan, CEO, BNC Motors Pvt Ltd explores the technological evolution of EVs in India, the unique approaches taken by companies like BNC Motors, and the broader challenges and opportunities shaping the future of electric mobility in the country.
How has the EV industry evolved technologically over the last few years in India?
As more and more customers transition to EVs, we are seeing that the technology evolution is being shaped by customer preferences. For example, we are seeing more demand from customers for quality, which is filtering out companies which are predominantly importing from China and white labelling. This is forcing companies to build up their R&D and localise their supply chains.
Another example is where we are seeing customers demand higher speed vehicles which match the speed of their ICE counterparts. Previously, customers were satisfied with 25 kmph EVs or max 50 kmph EVs – 4 years ago 90%+ market share vehicles were sub-50 kmph top speed and now they are less than 10% market share. Related to this, we are now seeing many more motor companies coming up in India, and many of them working on innovative new technologies on the motor.
We are seeing that most customers look for app features in their vehicles, and most of the vehicles being sold today have built in telematics and connected capabilities. We are also seeing cost reductions going on by all manufacturers to make vehicles more affordable to customers. For example, manufacturers who had large touch screens on their scooters are reducing or eliminating touch screens to reduce costs.
How is your company tapping the opportunities in electric vehicles (EV) space?
We are the only company in the industry who has a vehicle in the 100-150 cc equivalent motorcycle category. We are planning to launch additional vehicles in underserved – but nonetheless significant - categories.
For example, we have a 125cc equivalent scooter launching son: the Perfetto. We have another 150cc equivalent motorcycle coming later this year: the Boss. So far, EV manufacturers have tended to focus predominantly on compact scooters, we are the first company to branch out to across categories in this way.
How has BNC’s collaboration with Musashi Seimitsu Industry benefited the company?
Musashi has very strong technology on batteries and drivetrain, and BNC is collaborating with them to introduce this technology in our new products. Our Perfetto scooter, for example, incorporates drivetrain unit supplied by Musashi. We are also collaborating with Musashi on drivetrain for future product developments. Our future battery products will also soon feature Musashi technology.
What are key challenges before the EV industry at present? What are the biggest challenges in optimising EV efficiency?
While our Government has done a tremendous job in boosting the EV industry, increasing localisation, and forcing quality improvements, one of the biggest challenges in the industry has been policy uncertainty. For example, the assumption was that after FAME II ends on March 31, 2024, subsidy will end in India, but then EMPS was announced just few weeks before FAME II ended. EMPS is supposed to cover subsidies through July 31, 2024 – we are now in the middle of July and under the assumption that there will be no new subsidy after this. However, there is speculation that new subsidies in the form of FAME III will be announced during budget.
These kinds of last minute announcements make it very difficult for manufacturers to make business plans. It really doesn’t matter at this point whether the EV industry has subsidies or not, but it does matter that we know one way or another so that we can plan our investments, supply chains, and other aspects of our business. Subsidy changes affect gross margins or pricing by >10%, so they are very important.
The other challenge is that some manufacturers are potentially indulging in anticompetitive pricing for gaining market share. This can negatively impact the industry as a whole in the long run and should be reviewed.
Any new innovative products/solutions you have launched for EVs in 2023 & 2024?
In 2023, we launched the Challenger S110 and S125 which are 110cc and 125cc equivalent motorcycles respectively. We also launched our battery platform: Etrol, which includes a swappable battery, automated cabinet, and related software.
This year, in 2024 we are gearing up production for the Perfetto scooter and Boss motorcycle. We also have a lot of innovations / patent filings at a component level – we are continuously developing new technologies for components that go in our vehicles.
What has been the effect of various Government initiatives on the EV supply chain industry?
As mentioned briefly earlier, our Government has done a tremendous job in boosting the EV industry, increasing localisation, and forcing quality improvements.
On localisation, due to FAME subsidy, all OEMS localised a good portion of their supply chains and over the past 4 years, we have seen a flourishing EV components eco-system develop in India. We have also seen foreign capital coming on to establish or expand domestic EV component manufacturing – with Musashi itself being a great example.
On quality, new regulations such as AIS-156 Amendment 3 were much needed for the industry and have led to significant improvement on battery safety, as well as localisation of battery manufacturing for all players.
What more can be done to propel growth?
On policy side, three primary feedbacks: First, as mentioned earlier, to provide longer term policy clarity. For example, Mercedes recently mentioned that they would invest in the EV market in India if GST stayed at 5% for the next 10-years. This type of policy clarity will be beneficial for all players. Automotive investment returns are over many years, and policy plays a big role in the returns, so having long-term clarity is necessary for long-term investments.
Second, to either eliminate subsidies altogether or make them more inclusive. The PLI policy, for example, is closed to a certain set of manufacturers and the criteria for investments and audits are so high that most who have qualified are not able to benefit from it.
Third, it really is time to rollout a policy for battery swapping. Battery swapping is far superior to charging – it cuts down time of refuelling to a few minutes from a few hours, and eliminates one of the major inconveniences of owning an EV. Clarity on this will be a big boost for the EV industry.
What are your growth plans for the EV business?
By FY’26 we are targeting Rs 10 billion+ revenue while maintaining strong customer satisfaction and dealer satisfaction. We are in the process of expanding our distribution network in order to support this.
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