Tunwal E-Motors Ltd Management Discussions

1. INDUSTRY OVERVIEW

Global Electric Two-Wheeler Market

The global electric two-wheeler (E2W) market has witnessed unprecedented growth in the past decade, driven by the convergence of environmental imperatives, policy incentives, and rapid technological innovation. With urban mobility challenges intensifying, electric scooters and motorcycles have emerged as a sustainable alternative to conventional internal combustion engine (ICE) vehicles.

According to recent industry estimates, the global E2W market is projected to grow at a CAGR exceeding 10% over the next five years, propelled by:

• Government subsidies and tax incentives in key markets such as China, the EU, and Southeast Asia.

• Continuous advancements in lithium-ion battery technology, improving range and charging speeds.

• Expansion of charging infrastructure in urban and semi-urban areas.

• Growing consumer acceptance due to lower operating costs and rising fuel prices.

While Asia-Pacific remains the largest market, Europe and North America are catching up through aggressive electrification policies. Notably, technological integration such as IoT- enabled vehicle diagnostics, AI-based energy management systems, and connected mobility features are redefining user experience and brand differentiation.

Indian Electric Two-Wheeler Market India stands at a critical inflection point in its EV adoption journey. Supported by government-led initiatives like the FAME II Scheme, state-level subsidies, and growing environmental consciousness, the Indian E2W market is expected to outpace many global peers in terms of unit sales growth.

Key market drivers include:

• Rising fuel costs making EVs a financially attractive option for daily commuters.

• Government policies targeting 30% electric mobility penetration by 2030.

• Rapid growth of the gig economy (food delivery, courier services) creating demand for low-cost, high-mileage E2Ws.

• Increasing investment in battery manufacturing and localization of critical EV components.

However, challenges remain in terms of charging infrastructure standardization, battery recycling protocols, and consumer perception on long-term performance.

2. COMPANY OVERVIEW

Your Company, a SME Listed Company and innovation-driven EV two-wheeler

manufacturer, focuses on delivering affordable, efficient, and reliable electric mobility solutions tailored to Indian road and usage conditions. While maintaining a lean manufacturing approach, the Company places strong emphasis on:

• Indigenous design and engineering for high localization content.

• Modular product architecture to accommodate future upgrades.

• Integration of smart vehicle features for improved rider experience.

• Compliance with evolving environmental and safety standards.

3.OPERATIONAL AND FINANCIAL PERFORMANCE

The Company achieved significant operational milestones during FY 2024-25, including the expansion of its assembly line capacity, establishing new factories, launching and development of prototype models designed for both personal commuting and last-mile delivery.

While revenue streams are in early stages due to the ongoing plant setup and product launch pipeline, capital expenditure is strategically aligned towards high-efficiency production systems, energy conservation measures, and R&D facilities.

6. OPPORTUNITIES

• Rising demand for cost-effective urban mobility solutions

Increasing fuel prices, urban congestion, and shorter commute distances are driving adoption of electric two-wheelers in both metropolitan and semi-urban areas. Consumers are actively seeking affordable, eco-friendly alternatives to conventional scooters and motorcycles.

• Policy support through subsidies, tax exemptions, and R&D incentives

Central and state governments are providing significant fiscal incentives, including purchase subsidies, GST reduction to 5%, and road tax waivers. Dedicated R&D grants for EV technology and energy storage systems offer scope for technological leadership.

• Untapped export markets

Many emerging economies are witnessing early-stage EV adoption, creating an opportunity for India to position itself as a hub for affordable and durable EV two- wheelers. Targeting export-ready models adapted for local conditions can unlock substantial revenue streams.

• Growing demand from B2B fleet operators for low-maintenance vehicles

Logistics, e-commerce, and hyperlocal delivery companies are rapidly transitioning to EV fleets to meet sustainability goals and reduce operational costs. This segment offers steady order volumes and opportunities for long-term contracts.

• Technological integration and connected mobility

Increasing consumer interest in smart features — such as GPS tracking, mobile app connectivity, remote diagnostics, and antitheft systems — presents an avenue for differentiation in the competitive EV market.

• Government push for charging infrastructure development

Initiatives like public charging stations in urban clusters and incentives for private charging installations will help address range anxiety, thereby improving adoption rates. This indirectly boosts demand for EV manufacturers.

• Opportunities in battery swapping and leasing models

Battery-as-a-Service (BaaS) and swap station networks are gaining traction for commercial users, reducing upfront vehicle costs and offering faster turnaround times for fleet operations.

• Potential for vertical integration

Backward integration into battery assembly, motor manufacturing, or EV electronics can reduce reliance on imports, improve cost control, and enhance supply chain resilience.

7.THREATS

• Intense competition from ICE twowheeler giants entering the EV market

Established players with extensive dealer networks and strong after-sales capabilities can aggressively capture market share, especially in price-sensitive segments.

• Dependency on imported critical components

Lithium-ion cells, semiconductors, and

certain electronic controllers are still largely imported, exposing manufacturers to supply chain disruptions and foreign exchange fluctuations.

• Volatility in raw material prices

Rising costs of key materials like lithium, cobalt, and rare earth metals can erode

margins and lead to price instability.

• Fluctuations in government subsidy

policies

The EV industrys price competitiveness is still heavily dependent on subsidies. Any rollback or delay in disbursement could reduce consumer affordability and slow adoption.

• Rapid technological obsolescence

Constant advancements in battery chemistry, charging speeds, and motor efficiency mean that models can become outdated quickly, requiring frequent R&D investment.

• Infrastructure gaps in smaller cities and rural areas

Limited charging infrastructure in tier-II, tier- III, and rural regions could slow penetration in untapped markets, despite strong product potential.

• Consumer perception and safety concerns

Incidents of battery overheating or fire hazards — though rare—can create negative sentiment towards EVs, impacting demand.

• Regulatory compliance burden

Compliance with evolving safety, environmental, and performance standards adds complexity to product development and may increase time-to-market.

8. STRENGTHS

• Established Market Presence

Recognized as a listed entity on NSE, enhancing brand credibility, investor confidence, and market visibility.

• Diverse Product Portfolio

Multiple EV two-wheeler models catering to different consumer segments — from entry- level commuters to premium urban riders.

• Growing Dealer and Service Network

Expanding distribution channels across multiple states, ensuring customer accessibility and strong after-sales support.

• Access to Capital Market

Ability to raise funds through equity and debt instruments for capacity expansion, R&D, and marketing campaigns.

• Integrated Manufacturing Facilities

In-house production capabilities for chassis, body panels, and partial localization of components, reducing dependency on imports.

• Strong Compliance & Governance Framework

Adherence to SEBI (LODR) requirements, periodic disclosures, and structured corporate governance policies instills investor trust.

• Innovation and R&D Focus

Dedicated research units working on improving battery efficiency, charging times, and smart connectivity features.

9. WEAKNESSES

• Partial Dependency on Imported Battery Cells & Semiconductors

Despite localization efforts, critical high- value components remain import-dependent.

• Higher Operational Costs

Larger scale operations require higher fixed costs in plant maintenance, workforce salaries, and compliance overheads.

• Brand Perception in Premium Segment Still Developing

Strong presence in affordable commuter EVs, but limited recognition in high-end or performance EV categories.

• Supply Chain Vulnerabilities

Geopolitical events or currency fluctuations can impact procurement of key imported components.

8. OUTLOOK

The Company envisions positioning itself as a cost-innovator in the EV two-wheeler segment, delivering products that blend affordability, efficiency, and durability. With consumer adoption accelerating and the policy environment remaining favorable, the Company expects to commence full-scale operations in the coming year, targeting both domestic and selective export markets.

FOR AND ON BEHALF OF BOARD OF DIRECTORS TUNWAL E-MOTORS LIMITED

Sd/- Jhumarmal Pannaram	Sd/- Amit Kumar Mali Whole Time Director DIN: 07683275	Sd/-	Sd/-
Tunwal		Riya Lunkad	Niharika Choudhary
Managing Director DIN: 07486090		Chief Financial Officer	Company Secretary

Date: 14^th August 2025 Place: Pune