Electric Vehicles (EVs) sales are likely to be hit post the lockdown as people will tighten their purse strings and focus on essential expenditure rather than secondary costs
The lockdown imposed due to the corona-virus pandemic has created a drastic transformation in the environment, with a marked improvement in air quality and reduction in air pollution
The coronavirus outbreak has affected business as usual in most sectors across India. The lockdown imposed by the central government to combat the outbreak has affected the economy which might take a long time to regain traction. Electric Vehicles (EVs) sales are likely to be hit post the lock-down as people will tighten their purse strings and focus on essential expenditure rather than secondary costs. The Society of Manufacturers of Electric Vehicles (SMEV), the foremost proponent of EVs in the country, has broken down the situation to derive an experience based prognosis on the future of EV sales post corona.
According to EV manufacturers, two and three wheeler EV dealerships are run by novice entrepreneurs that are lacking in essential financial reserves to help them survive this lockdown period. These small businesses will struggle to pay rent and other overheads during the COVID-19 lockdown since as of now sales have reduced to a mere trickle.
“The EV industry is in a vulnerable stage and a network collapse is expected once the lock-down ends. Most EV dealerships are small operations and there is no backup support. Since these dealerships are not capital heavy, they attract small investors,” said Sohinder Gill, director general, SMEV.
“It is a day-to-day operation these days and monitoring being done on an everyday basis because in the network across India all shutters are down, which means for the last 25 days the retail is zero. It is also unclear if the customers will really come back to showrooms as discretionary spends will always be secondary. No one is going to purchase automobiles so soon and within that electric vehicles, which were already having a question mark, people will have second thoughts, “If the retail earnings stop you cannot order materials. So many of the small and medium players who don’t have deeper pockets are already passing through extreme cash crunch situation. You will find that in the process closure of some of the smaller players who are not able to linger on. It is an extreme short term view,” Gill said.
Players who have financial backing; those who are capital rich and well-funded startups will be able to survive this temporary phase, says SMEV. The progress of most EV related business will be delayed, and a lot of restructuring in terms of strategy is expected to take place in the market. On the plus side, fly by night operators bringing down standards in the EV ecosystem owing to below par product quality, will stop operations. This will raise the bar in the overall EV market in India.
The lockdown imposed due to the coronavirus pandemic has created a drastic transformation in the environment, with a marked improvement in air quality and reduction in air pollution. Hopefully, lawmakers will take this into consideration in devising policies and plans to accelerate EV adoption once businesses and markets get back on track. How long that will take only time will tell.
According to Gill, “With people expected to stay away from public transport for some time in post-coronavirus scenario, he said with EVs, specially low cost two-wheelers offering affordable option, there would be more acceptance for such vehicles with enabling government policies.”
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