The Electric vehicle race, and what lies ahead in the time to come is an intricate paradigm, with many factors influencing it's future. On one hand nations try to move towards a greener and more sustainable alternatives, the overview of the EV-market in itself is a compelling story.
Although companies vehicle start-ups like Nio, Li Auto , Xpeng, Rivian and Lucid along with traditional motor-giants, GM, Ford and Volkswagen have made it to the headlines, the centre-stage has been occupied by the new titans of the industry, the American behemoth Tesla, and its Chinese challenger, BYD. BYD has brought about a revolution in the market. For, in no time the company has found it's feet and powered past major players, who have been in the industry for years, and even decades.
Today the Shenzen-based wagon-maker has it's nose ahead of the Elon Musk run entity. When it comes to market share, BYD has 17.5 per cent of the market, while Tesla has 12.5 per cent of the ever-growing market, where a legacy player like Volkswagen trails with just over 4 per cent of the market. Despite this, thanks to the greater prices, at which Tesla cars are sold, especially compared to BYD, the revenue generated by the American car manufacturer is twice that of BYD, at just over 20 per cent, while BYD trails at just over 10 per cent.
The Indian EV Market
Overseas sales are a crucial area of growth and margins for BYD, which just announced its entry into Indonesia and plans to build a plant there. This could lead to the vehicular realm ushering into the world of a price-war, as after all, it boils down to the green. Especially when it comes to large and relatively untapped markets like India, which has a huge potential, but impediments in the form the price continues give headaches to EV-manufacturers. India has another layer or hurdle for these 'big two' of the EV-world, the indigenous corporations and the products that they churn out. Motor majors like Tata and Mahindra, have started making their moves in the direction of transition.
'The Price is Right'
Eventually price would again be the cornerstone of this discourse, major American and European automakers, including Ford, VW, GM and Mercedes have struggled to leave a mark in the segment of the market, once they ruled, a price-war would not be the easiest step for them, particularly when we focus on the Indian market, where these big brands have limited presence.
When it comes to Tesla, one of it's top selling car, Model Y, a five-seater would cost an Indian buyer around Rs 70 Lakhs. While, Tata's hatchback Punch EV is pegged at around Rs. 11 Lakhs. This price variation and the units sold is emblematic of the rate problem in India, and the world at large. As a result of this, Tesla slashed prices worldwide in January 2023, with further cuts since then. China EV makers, including BYD, cut prices in response to Tesla.
Policy Paradigm
The role of states/governments, and the policies, that they choke out is also important. BYD, being a Chinese company, has been accused of having an unfair advantage, thanks to the support, that it ostensibly receives from PRC government. On the other hand, Western nations, with an aim to transition from crude oil driven dirty vehicles, chalk out schemes and plans to aide the consumer buying these vehicles, or even assist manufacturers with subsides. Similarly in India, the government launched The FAME-2 (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) subsidy program was launched in 2019 and extended until 2024. Offers a subsidy of Rs 15,000 per kWh for two-wheelers and Rs 10,000 per kWh for three-wheelers. The subsidy is capped at 40 per cent of the cost of the vehicle.
In addition to all, another factor that influences the market, is the manufacturing and the sustainability in the making of the these wagons themselves. Although, technology is evolving to mitigate and adapt, the industry is still at peril because of what goes into the making of these vehicles. The rare elements (including Lithium) used and the ethicality and rectitude of the means of procurement of the same, often raises questions regarding the irony of the process, for its drives towards sustainability through unsustainable means, creating an avenue for harm in the not-so-distant future.
