Wardwizard Innovations & Mobility Ltd Management Discussions

MANAGEMENT DISCUSSION & ANALYSIS

Economic Overview

In 2024, the global economy began to stabilize after a period of overlapping negative shocks, including elevated financing costs, persistent inflation, and geopolitical tensions. Despite these challenges, global economic activity showed resilience, with the OECD projecting a steady global GDP growth of 3.1% for 2024, consistent with the growth seen in 2023, and a slight acceleration to 3.2% anticipated in 2025. This resilience is primarily driven by a rebound in consumer spending in advanced economies, supported by strong labour markets and sustained government stimulus.

However, the global economic landscape remains uneven. While advanced economies have generally performed well, benefiting from technological advancements and strong consumer demand, many developing economies continue to struggle with high inflation, currency depreciation, and political instability, which have hampered their growth prospects. Additionally, the global shift towards sustainable practices and green investments is reshaping industries and influencing both policy and market dynamics as nations work towards achieving climate goals.

Looking ahead, while the global economy is on a path to recovery, it remains vulnerable to external shocks. The focus on innovation, sustainability, and geopolitical stability will be crucial in navigating the challenges and opportunities that lie ahead.

The current growth momentum has been reinforced by favourable macroeconomic indicators, improved labour market conditions, increased urban demand, and heightened government focus on capital expenditure in FY 2023-24. The Reserve Bank of Indias (RBI) Monetary Policy Committee (MPC) has played a vital role in maintaining economic stability, keeping the policy repo rate steady at 6.5% throughout the fiscal year, thereby bolstering confidence in the economy. The RBI remains steadfast in its commitment to an inflation target of 4%, with an estimated inflation rate of 5.4% for FY 2023-24. The positive outlook for economic growth is further supported by a rise in private capital expenditure, strong business sentiment, and the robust financial health of banks and corporations. Additionally, the RBI projects a GDP growth rate of 7% for FY 2024-25. However, potential challenges such as geopolitical tensions, fluctuations in international financial markets, and geoeconomic fragmentation could impact the overall economic outlook. Despite these risks, global trade remains resilient, with opportunities for growth despite challenges like high-interest rates, commodity price volatility, and trade restrictions.

In this global context, Indias economy in FY24 remained robust, building on the momentum of previous years. The countrys GDP grew by 7.8% in the last quarter of FY24, resulting in a notable full-year real GDP growth of 8.2%. This growth was primarily driven by strong performances in the manufacturing and construction sectors, bolstered by healthy domestic demand and significant government investment. The manufacturing sector grew by 9.9%, with significant contributions from the steel and cement industries, which saw growth rates of 12% and 9%, respectively, fueled by ongoing infrastructure development

and a booming real estate market. The construction sector also recorded near double-digit growth, reflecting the governments infrastructure push and rising housing demand.

Throughout FY24, indicators of domestic demand remained strong, as seen in buoyant passenger vehicle registrations, robust GST collections, and increasing electricity consumption. However, there were early signs of moderation in some areas at the beginning of FY25, suggesting potential challenges to sustaining this growth momentum.

On the fiscal side, the government successfully reduced the fiscal deficit to INR 16.5 lakh crore, or 5.6% of GDP, lower than the revised estimate of 5.8%, an achievement driven by strong tax revenue growth, particularly from direct taxes, and lower spending on subsidies. The stability of Indias macroeconomic environment, coupled with a strong financial system, provides a solid foundation for sustained growth in the coming years.

Inflationary pressures have eased, with the Consumer Price Index (CPI) reaching a 12-month low of 4.75% in May 2024, approaching the RBIs target of 4%. However, food prices remain elevated, and the Wholesale Price Index (WPI) rose to a 15-month high of 2.61%, driven by increases in food and fuel prices.

While the outlook for the Indian economy remains positive, private investments have shown signs of sluggishness. Gross FDI inflows held steady at US$71 billion, but net FDI in FY24 dropped to US$10.6 billion, the lowest since 2007. To maintain the growth trajectory, the private capex cycle, especially in manufacturing and infrastructure, will need to gain momentum.

Looking forward, global rating agencies have upgraded Indias credit outlook from stable to positive, reflecting confidence in the countrys economic prospects. The RBI projects that Indias economy will grow by over 7.2% in FY25, driven by continued government investment and policy initiatives. As the fastest-growing major economy, India is well-positioned to maintain its growth momentum, supported by a focus on longterm development and structural reforms

Industry Overview

As the world accelerates toward a more sustainable future, the electric vehicle (EV) industry stands at the forefront of a transformative shift. Propelled by technological advancements, growing environmental consciousness, and evolving consumer preferences, the global automotive landscape is undergoing rapid change. With governments enforcing stringent emission regulations and offering incentives for clean energy adoption, demand for EVs has skyrocketed. This burgeoning sector promises to significantly reduce carbon footprints while spurring innovation in battery technology, charging infrastructure, and sustainable mobility solutions. As both established automakers and dynamic startups invest heavily in EV development, the industry is set for exponential growth, ushering in a new era of transportation.

In addition to driving environmental benefits, EVs offer substantial economic advantages. By producing zero tailpipe emissions, they help combat climate change and improve air quality. EVs are also more energy-efficient compared to traditional internal combustion engine vehicles, converting a higher percentage of energy from the battery to power the wheels. This efficiency results in lower fuel costs for consumers, as electricity is generally cheaper and more stable in price than gasoline. Moreover, the widespread adoption of EVs reduces dependence on fossil fuels, enhancing energy security by diversifying the energy sources used for transportation. Overall, the shift to electric vehicles represents a crucial step towards a sustainable and economically viable future.

The Indian electric vehicle market, valued at USD 2,216.92 million in 2022, is projected to grow significantly, reaching USD 26,008.43 million by 2028, with a robust CAGR of 40.52% over the forecast period from 2018 to 2028. This rapid growth is driven by the increasing demand for fuel-efficient, high-performance, and low-emission vehicles, alongside stricter emission regulations, decreasing battery costs, and rising fuel prices. The markets expansion is also fueled by the growing popularity of mild-hybrid electric vehicles, supportive government policies, and initiatives that promote e-mobility across India.

Moreover, the adoption of electric vehicles in major Indian cities is being propelled by green and sustainable policies aimed at addressing traffic congestion and pollution. Government subsidies and the gradual phasing out of internal combustion (IC) vehicles further boost medium-term demand. The positive market outlook is reinforced by increased investments from major OEMs, who are focusing on localizing supply chains and launching new products. Additionally, the Indian government is enhancing the countrys electric infrastructure, with the Ministry of Power designating the Bureau of Energy Efficiency (BEE) as the central nodal agency for implementing nationwide EV public charging infrastructure, supported by the Department of Heavy Industry under the FAME-II program.

With several EV purchase subsidies working their charm in numerous countries in the past few years, governments are now shifting their focus on expanding support for EV charge points. In 2024, the EV charging infrastructure is experiencing significant growth worldwide. According to reports of International Energy Agency, the number of public charging points is projected to exceed 15 million by 2030, a substantial increase from nearly 4 million in 2023. Home charging remains the most common method for EV owners, particularly in regions with ample private parking, though access varies by location.

The availability of fast chargers is also on the rise, with China leading in public fast charger deployment, and the number of these chargers expected to reach around 7.5 million by 2035. Regional differences are notable; densely populated areas like Korea have more public charging infrastructure due to limited home charging options, while suburban and rural regions see higher rates of home charging. Significant investments from governments and the private sector are driving this expansion, with the market for EV charging infrastructure poised for substantial growth in the coming years. Overall, the EV charging landscape is rapidly evolving to support the increasing number of electric vehicles on the road.

As of FY2024, the electric vehicle (EV) industry faces several notable concerns. One major issue is the shortage of affordable EV models, which impacts consumer adoption, especially among younger buyers. The charging infrastructure remains a significant challenge, with many potential buyers deterred by the lack of readily available charging stations. Additionally, the industry is grappling with volatile battery metal prices, high inflation, and the phase-out of purchase incentives in some regions, all of which contribute to market uncertainties. The availability of vehicles that meet consumer needs at acceptable price points is also a pressing concern.

Despite these challenges, the outlook for the EV industry is positive. Electric car sales are strong, with nearly one in five cars sold in 2023 being electric. The market is expected to continue growing, driven by advancements in charging infrastructure, including innovative solutions like electrified road systems and ultra-fast DC charging. The rise of electric mobility as a service (eMaaS) and shared e-mobility services is promoting sustainable transportation and reducing pollution. Furthermore, artificial intelligence (AI) is enhancing vehicle diagnostics, battery management, and the development of autonomous electric vehicles. Overall, the industry is poised for significant advancements and increased adoption in the coming years.

Global EV Market

The global electric vehicle (EV) market has witnessed unprecedented double-digit growth in recent years, driven by a confluence of factors, including stringent emissions regulations, increasing consumer awareness of environmental sustainability, and advancements in battery technology. As governments worldwide accelerate their transition to cleaner transportation, the demand for EVs has surged, reshaping the automotive landscape.

In 2024, the global Electric Vehicles (EV) market is expected to generate an impressive revenue of approximately US$786.2 billion as per Statista report, highlighting the rapid expansion and increasing adoption of EVs worldwide. Looking ahead, the market is expected to maintain a steady trajectory, with an anticipated CAGR of 6.63% from 2024 to 2029. If this growth continues as projected, the market volume is expected to reach a remarkable US$1,084.0 billion by 2029.

In tandem with this financial growth, unit sales in the EV market are also set to rise considerably. By 2029, it is estimated that 18.84 million EV units will be sold globally, reflecting the ongoing shift towards sustainable transportation and the growing consumer preference for electric vehicles. This expansion not only highlights the industrys robust growth potential but also its critical role in shaping the future of mobility.

Electric two-wheelers have witnessed a remarkable surge in popularity within the global electric vehicle market. Valued at an estimated US$ 105.3 billion in 2024, this segment is projected to reach US$ 186 billion by 2030, demonstrating a robust CAGR of 9.94% according to Mordor Intelligence.

The Asia Pacific region spearheads this growth, driven by its vast population, rapid urbanization, and a strong preference for affordable, efficient, and environmentally friendly transportation solutions. Government policies in these regions have further catalysed the adoption of electric two-wheelers. Notably, consumer demand has seen an impressive uptick across various geographies, particularly in emerging markets like India, China, and parts of Europe.

Indian EV Market

Indias electric vehicle (EV) market is experiencing a surge in popularity, driven by a combination of government incentives, growing consumer awareness, and technological advancements. As of 2024, the Indian EV market has witnessed a significant increase in sales, particularly in the two-wheeler and three-wheeler segments. The countrys ambitious target of achieving 30% electric vehicle penetration by 2030 is gaining momentum, with a focus on promoting domestic manufacturing and supporting the development of charging infrastructure. With initiatives like the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, India aims to significantly increase EV adoption, revolutionizing its transportation landscape towards sustainability and innovation.

India has established an objective to elevate the proportion of electric vehicle (EV) sales to 30% in private cars, 70% in commercial vehicles, 40% in buses, and 80% in two-wheelers and three-wheelers by the year 2030. This equates to an ambitious objective of 80 million EVs on Indian roads by 2030. Additionally, India strives for complete domestic EV production through the Make in India initiative.

Electric two-wheelers dominate Indias EV market, accounting for over 50% of sales. Electric three-wheelers, both passenger and cargo variants, also hold a significant share, totalling over 40% of the market. While electric cars still have a smaller share, their growth is anticipated to accelerate as infrastructure and charging facilities improve. Government policies and technological advancements are crucial factors driving the adoption of electric vehicles across all categories.

Two-wheelers witness significant dominance over four- wheelers and are the fastest-growing segment. Two-wheelers are highly used in India for transportation. Additionally, rising traffic congestion on Indian roads is influencing the populace to adopt micro-mobility for daily commutes and transportation. Moreover, the rising fuel prices and increasing awareness and availability of electric two-wheelers are anticipated to accelerate the penetration of electric two-wheelers in the Indian market.

FY2024 appears to be a particularly strong year for EV two wheelers registrations recording 28.8% YoY growth. As of FY2024, the total number of EV registrations in India reached 10,09,356. Fuelled by robust demand and governmental backing, Gujarats EV landscape is experiencing rapid expansion. In 2023, EV sales surged by 28% compared to the prior year, totalling 88,619 vehicles, showcasing remarkable growth from 2021s 10,885 units, reflecting a 714% increase over three years.

Electric three-wheelers, commonly known as e-rickshaws, have emerged as a convenient and eco-friendly mode of public transportation in India. These vehicles operate with the help of battery-based electric motors that reduce additional costs related to fuel consumption. Electric three-wheelers are primarily classified into passenger carriers and load carriers. E-rickshaws with passengers dominate the E3W market, accounting for a whopping 77.22% of total sales and translating to nearly 490,323 units sold. E3W passenger vehicles also hold a significant share at 11.14%, with approximately 70,736 units sold. E3W goods and E-rickshaws with carts hold considerably smaller shares of the market, at 5.19% and 6.43% respectively, translating to around 32,955 and 40,829 units sold.

Reports suggest a significant surge in electric three-wheeler sales from FY2019 to FY2024 reaching to 6,34,969 units sold in FY2024, with a CAGR of approximately 84.5%. This impressive growth is indicative of a rising demand for electric three-wheelers in India, driven by factors such as government incentives, infrastructure improvements, and increasing environmental awareness. The positive trajectory of the market suggests a bright future for electric three-wheelers as a sustainable and efficient transportation solution.

On the infrastructure side, as of February 2024, there are 12,146 operational public EV charging stations nationwide, Maharashtra has the highest number of EV charging stations, followed by Delhi and other states. A recent Confederation of Indian Industry (CII) report emphasized the necessity of establishing at least 1.32 million charging stations in India by 2030 to facilitate the rapid growth of electric vehicles, requiring over 4,00,000 installations annually.

Major industry players are striving to improve electric vehicle charging infrastructure enhancing accessibility to electric vehicles nationwide, expanding its ultra-fast EV charging network located in top tier cities and rural areas as well.

Government Initiatives

Subsidy on electric scooter and bikes: State-wise data

Similar to electric car/SUV subsidies, electric two-wheelers are also eligible for state government-provided subsidies. Refer to the table below for electric scooter subsidy and electric bike subsidy in each state.

State	Subsidy (Per kWh)	Maximum subsidy	Discount on road tax
Maharashtra	Rs. 5,000	Rs. 25,000	100%
Meghalaya	Rs. 10,000	Rs. 20,000	100%
Gujarat	Rs. 10,000	Rs. 20,000	50%
Assam	Rs. 10,000	Rs. 20,000	100%

 

State	Subsidy (Per kWh)	Maximum subsidy	Discount on road tax
Bihar	Rs. 10,000	Rs. 20,000	100%
West Bengal	Rs. 10,000	Rs. 20,000	100%
Rajasthan	Rs. 2,500	Rs. 10,000	NA
Odisha	NA	Rs. 5,000	100%
Uttar Pradesh	Nil	Nil	100%
Kerala	Nil	Nil	50%
Karnataka	Nil	Nil	100%
Tamil Nadu	Nil	Nil	100%
Telangana	Nil	Nil	100%
Madhya Pradesh	Nil	Nil	99%
Andhra Pradesh	Nil	Nil	100%
Punjab	Nil	Nil	100%

Note: The subsidy figures for electric cars and two-wheelers are taken from each state governments website as on 29th August 2024

National Incentives:

Production Linked Incentive (PLI) Scheme:

The Government of Indias Production Linked Incentive (PLI) scheme, specifically designed for the automobile and auto components sectors, is set to significantly impact the countrys manufacturing industry. Launched on September 15, 2021, this strategic initiative aims to boost the domestic production of Advanced Automotive Technology (AAT) products, which are essential for the future development of the automotive sector, particularly as the industry shifts toward electric and autonomous vehicles.

The PLI scheme, with a substantial allocation of INR 259.38 billion (approximately USD 3.50 billion), is structured to enhance Indias manufacturing capabilities in AAT over five years, starting from the fiscal year 2022-23. The fiscal year 2019-20 serves as the baseline for evaluating sales performance and determining incentives.

Beneficiaries of the scheme are categorized into two groups: 75 entities under the Component Champion Incentive Scheme and 20 under the Champion OEM Incentive Scheme. These selected entities have collectively proposed an impressive investment of INR 748.5 billion, focusing on developing components and vehicles aligned with the schemes advanced technological goals. The PLI scheme includes both existing automotive manufacturers and new entrants from non-automotive sectors, while explicitly excluding traditional producers of petrol, diesel, and CNG vehicles, highlighting the schemes focus on fostering innovation in cutting-edge automotive technologies.

Eligibility for the schemes incentives extends over five consecutive fiscal years following the base year, encouraging continuous investment and innovation in advanced automotive technologies. To qualify for these incentives, both existing players and new entrants in the automotive market must meet a specified minimum cumulative domestic investment threshold from April 1, 2021, with a particular emphasis on promoting battery electric vehicles (BEVs) that meet the stringent performance standards set by the FAME-II scheme, ensuring support is directed toward vehicles that exemplify high efficiency and technological advancement.

FAME India Scheme (Faster Adoption and Manufacturing of Electric Vehicles in India):

The FAME India Scheme (Faster Adoption and Manufacturing of Electric Vehicles) Phase II, commonly referred to as FAME 2, represents a substantial enhancement from the original FAME 1 initiative in driving the adoption of electric and hybrid vehicles in India. Launched in April 2019, this scheme highlights the Indian governments strong commitment to promoting environmental sustainability in the transportation sector. With a significant budget allocation of INR 10,000 crore over three years, FAME 2 was initially set to end in 2022, but its extension to March 31, 2024, underscores the governments ongoing efforts to reduce carbon emissions and improve the environmental impact of the nations transport systems. The scheme primarily focuses on electrifying public and shared transportation, including electric buses, three-wheelers, four-wheelers for public or commercial use, and private two-wheelers.

A major aspect of FAME 2 is the provision of financial incentives to make electric vehicles more affordable for consumers, with the incentives linked to the battery capacity of each vehicle. The scheme also prioritizes the development of electric vehicle charging infrastructure, with plans to regularly establish charging stations across urban areas and major highways to address range anxiety and support longer journeys. Additionally, the government aims to localize EV charger manufacturing by December 2024, boosting domestic production and further strengthening Indias electric vehicle ecosystem. By July 2022, approximately 469,315 electric vehicles had been supported through demand incentives totalling about INR 18.69 billion under FAME 2. Overall, FAME 2 aligns with the broader governmental vision of reducing reliance on fossil fuels, cutting vehicular emissions, and advancing sustainable transport in India.

Electric Vehicle Market Dynamics and Incentives

While the initial purchase price of electric vehicles (EVs) may appear higher than traditional internal combustion engine (ICE) vehicles, their long-term cost-effectiveness is evident. Government incentives play a pivotal role in bridging this gap, making EVs more accessible to consumers.

Key incentive mechanisms include:

• Direct Purchase Discounts: Government subsidies directly reduce the upfront cost of EVs.

• Reimbursement Incentives: Coupons or rebates provide financial support after the purchase.

• Interest Rate Subsidies: Lower interest rates on EV loans reduce overall financing costs.

• Tax Exemptions: Waivers of road tax and registration fees significantly lower initial expenses.

• Income Tax Benefits: Deductions on income tax for EV owners offer additional savings.

• Scrapping Incentives: Encouraging the replacement of older ICE vehicles with EVs.

Beyond these core incentives, governments may also offer specialized programs such as interest-free loans, top-up subsidies, and targeted incentives for electric three-wheelers. These initiatives collectively contribute to the growing adoption of EVs and the transition towards a more sustainable transportation landscape.

Outlook for the Future

Emphasis on Energy Sustainable Transportation:

• Rising carbon emissions and transportations impact:

Transportation contributes about 7% of Indias total CO2 emissions, necessitating the large-scale adoption of low- or zero-carbon technologies to address climate change challenges.

• Role of Alternative Fuel Vehicles (AFVs): AFVs, including HEVs, PHEVs, and BEVs, are key innovations that can help reduce carbon emissions in the transportation sector.

• Shift towards electric vehicles (EVs): Increasing consumer preference for EVs signals a move towards decarbonization, driving the need for expanded charging infrastructure and fast-charging technologies across the country.

• Advancements in charger technology: Improvements in charging technology will reduce EV charging times, further encouraging EV adoption and lowering carbon emissions.

• Government support for EV adoption: The Indian government promotes EVs through incentives, subsidies, and policies like the FAME scheme, while avoiding an outright ban on ICE vehicles.

• Phasing out diesel vehicles: Recommendations include banning diesel-powered four-wheelers by 2027 and transitioning to electric or gas-fueled vehicles in major cities and polluted towns, supported by FAME incentives.

• Challenges of transitioning from diesel: Shifting from diesel to alternative fuels presents challenges, but India is committed to increasing renewable energy use in transportation and promoting EV adoption.

• 30@2030 target for EV adoption: The Indian government aims for EVs to make up 30% of vehicle sales by 2030, supported by policies, incentives, and infrastructure development to reduce emissions and promote renewable energy.

Innovation in Battery Technology

Two significant challenges hindering the broader adoption of electric vehicles are range anxiety and the high cost of batteries. However, emerging battery technologies are poised to address both issues simultaneously. Over the past two decades, lithium-ion batteries have become the industry standard in EV development. Now, new innovations, such as graphene-based technologies that can charge in just 15 seconds, are being tested. These advancements are expected to complement, rather than replace, traditional EV batteries.

These advancements will shape the future of electric vehicle charging and significantly boost EV adoption. From an EV perspective, these new technologies will be game changers, particularly in three key areas of battery chemistry:

• Lithium-Sulfur Battery

• Solid-State Battery

• Sodium-Ion Battery

Lithium-sulfur batteries, in particular, are emerging as a promising alternative to lithium-ion batteries, potentially overcoming several challenges associated with their adoption.

Battery manufacturers and the Indian government are driving the technological advancement of battery chemistry in the Indian market. Localized production of batteries is expected to increase EV penetration rates and provide opportunities for small-scale battery chemistry suppliers to contribute to government efforts to promote electric mobility.

• In September 2022, the Investment Information and Credit Rating Agency of India Limited estimated that investments in battery cell manufacturing could exceed USD 9 billion (approximately INR 70,000 crore) by the end of 2030. This investment is expected to fuel future growth in the Indian EV sector beyond 2030.

• In November 2023, India unveiled a plan to invest INR 8,000 crore (USD 961 million) to boost electric vehicle battery production. Incentives will be provided through a bidding process to support the establishment of advanced chemistry battery plants with a collective capacity of 20 gigawatt-hours. These incentives will be distributed over five years based on the sales of locally manufactured batteries.

Such initiatives are expected to shape the outlook for electric vehicle batteries over the coming decade.

SWOT ANALYSIS

Electric Vehicles (EVs) have emerged as a compelling alternative to traditional combustion engine vehicles. As the world transitions towards sustainability and seeks solutions to mitigate environmental impacts, the significance of EVs has been increasingly acknowledged. However, understanding the strengths, weaknesses, opportunities, and threats (SWOT) associated with electric vehicles is crucial for stakeholders to navigate this evolving industry landscape effectively.

Sector Strengths (Positive Factors):

• Favourable government policies: Incentives like tax exemptions, duty reductions, and subsidies support the industry.

• Stringent emission and fuel economy standards:

The implementation of strict norms is driving improvements in vehicle efficiency.

• Government investment in EV infrastructure:

Significant funding is being directed towards building the necessary infrastructure for electric vehicles.

• Tight regulations on ICE vehicles: Policies like the BS- VI emission standards, introduced in April 2020, aim to reduce air pollution.

• Growing consumer demand: Increased awareness of environmental issues is boosting demand for cleaner, sustainable transportation options.

• Technological advancements and R&D: Continuous upgrades and research efforts are enhancing the sectors capabilities.

• Efforts to reduce battery costs: Initiatives are underway to lower battery prices, making EVs more affordable.

• Expansion of charging infrastructure: The development of private and semi-public charging stations is facilitating EV adoption.

• Joint ventures in mineral exploration: Partnerships among major PSUs like NALCO, HCL, and MECL are focusing on securing mineral resources abroad.

• Reducing reliance on imported petroleum: Efforts are being made to conserve foreign exchange by cutting down on petroleum imports.

• Growth in renewable energy production: Increasing renewable energy generation ensures a greener power supply for EVs.

Sector Weaknesses (Challenges):

• High manufacturing costs: The absence of mass production leads to higher costs due to a lack of economies of scale.

• Non-localized value chains: The industry relies heavily on imports, with limited domestic supply chains.

• Vulnerability to global supply chain disruptions:

Dependence on imported raw materials, especially for batteries and components, leaves the sector exposed to international supply chain issues.

• Limited domestic capacity development: There are few opportunities to build up local manufacturing and production capabilities.

• High initial investment for EV infrastructure:

Establishing EV charging stations requires significant upfront capital.

• Inadequate EV charging infrastructure: The current infrastructure is insufficient to meet the growing demand for electric vehicles.

Opportunities:

• High air pollution levels: The severe air pollution in India, with 22 out of the 30 most polluted cities globally, creates an urgent need for adopting non-fuel vehicles, as pollution is linked to over a million deaths annually.

• Indias focus on Sustainability Development Goals:

There is a growing commitment to achieving these goals, driving the shift towards cleaner transportation.

• Rising demand for EVs: The automotive sector is seeing increasing consumer interest in electric vehicles.

• Expanding demand for commercial EVs:

The commercial vehicle category is also experiencing a growing interest in electric alternatives.

• Ongoing research and development (R&D):

Continuous R&D efforts present opportunities for innovation and advancements in the sector.

Threats:

• Safety and credibility concerns: There is a risk of issues related to the safety and reliability of EV products.

• High initial cost of EVs: Electric vehicles are generally more expensive upfront compared to internal combustion engine (ICE) vehicles.

• Limited range and speed: Many EVs offer low range and speed, making them ineligible for government subsidies.

• Lack of standardization for EV charging units:

The absence of uniform standards for charging infrastructure poses a challenge.

• Limited financing options: There are few financing choices available for consumers looking to purchase EVs.

• Trade monopolies on key minerals:

Certain regions dominate the supply of essential minerals like cobalt, lithium, nickel, copper, and aluminum, affecting global supply chains.

• Emissions from electricity generation:

High electricity demand for EVs can lead to increased emissions if the power is generated from non-renewable sources.

WARDWIZARD INNOVATIONS AND MOBILITY LIMITED

Wardwizard Innovations & Mobility Limited (Wardwizard, The Company) is a prominent manufacturer of Electric Twowheeler and Three-wheeler Vehicles in India, operating under the brand names Joy e-bike and Joy e-rik. The Company boasts one of the broadest product lines of any EV scooter and motorcycle company. With a focus on sustainable and ecofriendly transportation solutions, the Company is dedicated to producing high-quality electric vehicles that are both affordable and efficient. Wardwizard is also Indias first Electric Vehicle Manufacturer to be listed on the Bombay Stock Exchange (BSE) with the core business of EV Manufacturing.

Business Overview

The core business of Wardwizard is manufacturing EVs, with a focus on sustainable mobility solutions. With a current Market capitalization as of 1350 crore on 31.03.2023 this innovation driven company had entered the EV space with a commitment to make India travel in an eco-friendly way. As the first Electric Vehicle manufacturing entity to grace the Bombay Stock Exchange, Wardwizard has unfurled its vibrant portfolio across the Indian subcontinent, offering an array of over 10+ electric vehicle models. This diverse assortment spans high and low-speed electric two-wheelers to utilitarian three-wheelers, including e-carts, e-loaders, and e- rickshaws. With its products reaching the nooks and crannies of over 400 cities in 20+ states and union territories, Wardwizard has woven a tapestry of electric mobility that proudly serves over 1,00,000 satisfied customers.

Through the Deep Bharat Connect, a robust distribution- dealer model, Wardwizard has significantly expanded its electric embrace, boasting over 750+ dealers and more than 150+ distributor showrooms nationwide. This expansive network has been instrumental in making electric mobility accessible to a wider audience, setting the stage for a greener future.

The company is on an expansion mode across India, and the growth has been exponential this year. It is setting new targets to reach newer heights in FY2024, to weave a stronger network of dealers, expand product portfolio, and diversify into new segments. The team at WIML has pledged to strengthen the EV ecosystem to generate more jobs in the industry and deepen the focus on tri-vertical approach for the growth of green mobility

Product Portfolio

Wardwizard has a strong product portfolio and has established its presence across different categories of pricing, speed and riding modes. The flagship brand of the company Joy E-Bike and Joy E-Rik has various sub-brands or models to suit different categories of customers, each equipped with smart and intelligent features like anti-theft, regenerative braking, reverse mode to name a few and the products are well suited to Indian roads. Cutting edge technology goes into the design and development of the products by the R&D team, with a focus on promoting localization and the Make-in-India initiative. The United Nations has always promoted policies for a green economy which betters well-being of mankind and builds social equity whilst reducing environmental risks and insufficiencies. To foster the green initiative in the citizens of the country, Wardwizard offers the following product models which are currently available for sale.

Model	Type	Top speed (Km/ hour)	Range per charge (Km)	Charging time (hours)
Thunderbolt	High Speed Motorcycle	90	110	9
Hurricane	High Speed Motorcycle	90	100	9
Beast	High Speed Motorcycle	90	100	9
E-monster	High Speed Motorcycle	60	95	5.5

 

Model	Type	Top speed (Km/ hour)	Range per charge (Km)	Charging time (hours)
Monster	Low Speed Motorcycle	25	75	4.5
Wolf +	High Speed Scooter	55	88	4-5
Gen Next Nanu+	High Speed Scooter	55	88	4-5
Glob*	Low-speed Scooter	25	55-60	4-5
Gen Next Nanu*	Low-speed Scooter	25	55-60	4-5
Wolf*	Low-speed Scooter	25	55-60	4-5
Wolf Eco	High Speed Scooter	46	90	4-5
Gen Next Eco	High Speed Scooter	46	90	4-5
Mihos	High Speed Scooter	65	130	5
Passenger E-Rik(L-3)	3-Wheeler	25	120-130	8-9
E-Loader	3-Wheeler	25	120-130	8-9
E-Garbage Vehicle	3-Wheeler	25	120-130	8-9
E-cart Grill	3-Wheeler	25	120-130	8-9
Passenger E-Rik(L-5)	3-Wheeler	45	70-75	3.5-4

*license or registration not required

SHOWROOM DISTRIBUTOR MODEL

Joy e-bikes, the flagship brand of Wardwizard, demonstrates strong profitability, sustainability, and growth with a diverse portfolio of over 10 products. The company operates under a showroom-distributor model, where it establishes 1500 sq. ft. showrooms complete with fully finished interiors, designed to provide a comprehensive customer experience. Existing dealers are integrated into this model, and they are required to purchase bikes exclusively from these showroom distributors. To ensure smooth operations, an Assistant Sales Manager oversees secondary sales from dealers, while a Regional Showroom Manager provides support and monitors overall sales performance. New dealers are appointed solely through the Regional Channel Sales Manager.

In line with its strategic expansion plan, Wardwizard has successfully launched over 150 exclusive distributor showrooms across various Indian cities. This model not only streamlines the supply chain for distributors and dealers but also enhances product accessibility for customers. These showrooms are designed to offer customers a hands-on experience, along with personalized solutions tailored to their comfort and needs. The focus on providing excellent sales and after-sales service ensures a seamless purchase experience, fostering strong relationships with customers.

The company plans to establish additional 150 new distributor showrooms at the district level. This initiative will elevate top-performing taluka dealers to District Distributors, further strengthening Wardwizards foothold in the fast-expanding EV market. With a strong network of more than 750 touchpoints across India, this expansion aligns with the companys vision and commitment to bringing innovative electric vehicles to a broader audience nationwide.

STEPS TAKEN TO IMPROVE BATTERY SAFETY BY WARDWIZARD

Wardwizards "Gaja Cells" have received Bureau of Indian Standards (BIS) Certification. These cells are assembled into battery packs and used in our two- and three-wheeler production, a method that not only reduces costs but also ensures the delivery of high-quality products to our customers.

o Stringent Quality Control

A dedicated company representative is stationed at the manufacturing site to enforce strict quality control protocols. This ensures the early detection and resolution of potential defects throughout the production process.

o Data Collection and Monitoring

Our AI technology continuously monitors critical battery parameters such as voltage, current, temperature, state of health, state of charge, current limits, protection status, and error codes. Users receive immediate alerts via SMS or email for any detected irregularities.

o Higher Grade Material

We use certified cells (IS 16893-Part 2 and Part 3) with enhanced thermal stability and puncture resistance. The cells are held in place by 99.5% pure nickel and fire- resistant, mechanically robust cell holders.

o Effective Thermal Management

To prevent overheating, efficient thermal management systems are integrated within the batteries. These systems regulate temperature and dissipate excess heat through the use of thermal pads or potting material.

o Comprehensive Testing Protocols

Every battery undergoes rigorous testing to assess performance, safety, and reliability. These tests are designed to identify and address potential issues before the batteries are deployed

o Mechanical Integrity

Our battery packs are engineered with exceptional structural integrity. The design and construction of the pack enclosure, frame, and mounting components ensure secure assembly and precise alignment of battery cells and other essential parts.

o Smart Battery Management Systems (BMS)

Our CAN-based Smart Battery Management System (BMS) integrates several essential safety features to optimize battery performance and protection:

o Over-voltage protection: Monitors and controls voltage levels to prevent them from exceeding safe limits, thereby minimizing the risk of damage or failure.

o Over-charge protection: Oversees the charging process to avoid excessive charging, which could lead to battery degradation or hazardous situations.

o Over-discharge protection: Keeps track of the batterys discharge levels to prevent them from dropping too low, protecting against potential damage and extending battery lifespan.

o Over-temperature protection: Continuously monitors the batterys temperature and triggers safeguards if it exceeds safe thresholds, preventing overheating and the risk of thermal runaway.

o Overcurrent protection: Detects and limits excessive current flow, safeguarding battery cells and electrical components from damage caused by high current conditions.

o Short-circuit protection: Quickly identifies and responds to short circuits, ensuring immediate disconnection to prevent damage or safety hazards.

These safety features work together to improve the reliability, longevity, and safety of the battery system, reducing the likelihood of critical failures or accidents. We are also collaborating with an Indian manufacturer to develop a customized BMS tailored to our specific requirements.

Protection and Safety Features

Our battery packs are equipped with safety features like fuses to prevent overcurrent and short circuits, pressure vents, and silicone-insulated cables, which protect the battery cells and the entire pack from hazardous conditions.

o Enclosure and Sealing

The battery pack enclosure is meticulously designed to shield against environmental factors and physical impacts. Effective sealing techniques, such as gaskets or adhesives, are employed to prevent the ingress of contaminants and maintain the battery packs integrity.

o Continuous Research and Development

Our ongoing research focuses on understanding battery aging, minimizing degradation, and extending lifespan. We explore advanced communication protocols for BMS connectivity, data logging, and remote monitoring, using machine learning and data analytics to optimize battery performance..

o Improved Battery Life

We have developed various charging profiles that allow users to choose their preferred charging speeds. Improvements in Depth of Discharge (DOD) enhance cycle life, battery efficiency, and longevity. By limiting peak and continuous discharging currents to 1C and

0.7C respectively, we effectively manage temperature rise, reduce the risk of thermal runaway, and significantly improve battery safety and longevity.

EV ANCILLARY CLUSTER:

Wardwizard, in collaboration with its Promoters and Promoters Group, has acquired 4 million sq. ft. of land to establish Indias first EV ancillary cluster near its newly inaugurated global headquarters in Vadodara. The company has also signed an MoU with the Gujarat Government, committing an investment of Rs.2000 crores for EV research and development.

The primary goal of this project is to localize and strengthen the supply chain for raw materials essential to EV manufacturing, thereby accelerating the growth of the EV market in India. Manufacturing partners will be invited to co-locate their production units within this state-of-the-art facility, utilizing advanced resources and labour to produce key components.

Additionally, Wardwizard has signed an MoU with a Singapore- based renewable energy consulting firm to conduct a feasibility study and identify potential partners for establishing a Li-ion cell production plant and R&D lab.

Wardwizards focus is on the entire supply chain ecosystem. The EV Ancillary Cluster will invite manufacturing partners to set up their production units under one roof, creating an integrated and cost-effective facility. This cluster will produce essential components such as motors, batteries, chassis, steel parts, chargers, controllers, and electronic components, all in one location. Wardwizard will provide ultra-modern facilities, including land, manpower, and other essential resources, in a strategically located area on the Vadodara-Ahmedabad highway, benefiting from excellent transport connectivity.

This cluster will offer several key advantages:

• Reduced Import Dependency: By localizing the production of raw materials, the cluster will reduce reliance on imports, especially for key materials like lithium and cobalt.

• Cost Efficiency: Constant availability of raw materials at competitive prices will lower overall operational and logistics costs.

• Supply to Other OEMs: Ancillary partners will have the opportunity to supply locally manufactured raw materials to other OEMs in the industry.

The ancillary cluster will be developed in phases, focusing on:

• Lithium-ion cell manufacturing

• Lithium-ion battery assembly

• Joy E-Bike high-speed electric 2W assembly plant

• Joy E-Bike 3W passenger segment assembly plant

• Electric motors, BLDC hub motor, and mid-drive motor production

• Chassis, steel parts, and steel subparts manufacturing

• Chargers and controllers production

• R&D, design, and production of electronic components

• A plant for the prospective 4W project

The current plants production capacity is sufficient for the next few years, and the ancillary cluster represents a significant backward integration strategy. These two plants will enable the company to become a major player in the industry, with the potential to export a portion of its production. The cluster is expected to create approximately 5,000 new jobs.

Financial Performance Review

The analysis in this section relates to the financial results for the year ended March 31, 2024. The companys financial statements are prepared in compliance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, as amended from time to time. Significant accounting policies used in preparing the financial statements are disclosed in the notes to the consolidated financial statements.

Particulars	FY22	FY23	FY24
Revenues (Rs. Cr)	184.56	238.93	317.31
Other Income (Rs. Cr)	0.58	0.36	0.26
Total Income (Rs. Cr)	185.14	239.29	317.57
Cost of Material Consumed (Rs. Cr)	158.54	192.01	225.68
Employee Costs (Rs. Cr)	6.13	8.44	12.34
Other Expenses (Rs. Cr)	5.99	19.27	47.04
EBITDA (Rs. Cr)	14.48	19.57	32.52
EBITDA Margin (%)	7.82%	8.18%	10.24%
Finance Costs (Rs. Cr)	0.00	0.77	5.21
Depreciation (Rs. Cr)	2.33	4.95	6.67
PBT (Rs. Cr)	12.15	13.85	20.63
Tax (Rs. Cr)	3.67	4.40	6.48
PAT (Rs. Cr)	8.48	9.45	14.15
Net Profit Margin (%)	4.58%	3.95%	4.46%

Wardwizard Innovations & Mobility Limited has demonstrated strong financial performance in FY24, with revenues growing by 32.8% year-over-year to Rs.317.31 crore. The companys EBITDA also saw a significant increase, rising to Rs.32.52 crore, driven by higher sales volumes and improved operational efficiencies. The EBITDA margin improved to 10.24%, reflecting the companys focus on cost management and value creation.

Summary of Financial Performance

• During FY24, the company achieved an operating revenue of Rs.31731.43 lakhs, an increase of 32.81% over FY23s Rs.23,892.60 lakhs.

• EBIDTA for FY24 was Rs.3252.09 lakhs versus Rs.1,956.78 lakhs for FY23, showing an increase of 66.20%.

• Earnings per share improved from Rs.0.36 in FY23 to Rs.0.54 in FY24.

• Subject to the members approval in the forthcoming annual general meeting, the Board of Directors has recommended a dividend payment of Rs.0.15 per share for FY24, compared to Rs.0.10 per share in FY23

Revenue			(Rs. in lakhs)
Particulars	FY24	FY23	% Change
Operating Revenue	31731.43	23892.60	32.81%
Other Income	25.76	36.27	-28.98%

• Operating revenue growth was supported by higher sales volume of E2W, which stood at 26,996 units in FY24, compared to 36,500 units in FY23.

Product-wise Revenue

Particulars	FY24	FY23	% Change
Total Revenue from Sale of Electric Vehicles, its components & related services	31,731.43	23,878.06	32.89%
Revenue from Vyom products	-	14.54	NA
Total Revenue from products	31,731.43	23,892.60	32.81%
Revenue from other income	25.76	36.27	-28.98%
Total operating income	31,757.19	23,928.87	32.72%

Cost of Materials

Particulars	FY24	FY23	% Change
Cost of raw materials	22,567.64	19,201.61	17.53%
Operating revenue	31,757.19	23,892.60	32.81%
Cost of materials/Operating revenue	71.06%	80.37%

• The cost of raw materials increased by 17.53% in FY24 compared to FY23, with operating revenue rising by 32.81%. The increase in raw material costs was due to the higher prices of key components such as batteries, chargers, motors, controllers, chassis, and other vehicle spare parts.

Employee Benefits

Particulars	FY24	FY23	% Change
Employee benefits	1233.85	843.76	46.23%
% of Revenue	3.89%	3.53%	-

• The employee benefits cost increased by 46.23% in FY24, primarily due to the hiring of additional staff and annual salary increments.

Depreciation and Amortisation

Particulars	FY24	FY23	% Change
Depreciation Amortisation and	667.23	494.94	34.81%
% of Revenue	2.10%	2.07%	-

• The increase in depreciation and amortisation was due to the capitalisation of plant and machinery, factory sheds, corporate office, and other tangible and intangible assets amounting to 754.49 lakhs in FY24.

Other Expenses

Particulars	FY24	FY23	% Change
Other expenses	4703.60	1,926.73	144.12%
% of Revenue	14.81%	8.06%

• Other expenses rose by 144.12% in FY24, mainly due to increased spending on sales promotion, legal and professional fees, security services, travel expenses, insurance, and other administrative costs. ^•

Income Tax

Particulars	FY24	FY23	% Change
Income tax	648.29	440.94	47.02%
Profit before tax	2063.45	1,385.15	48.97%
Tax as % of Profit before tax	31.42%	31.83%

• The effective tax rate decreased to 31.42% in FY24 from 31.83% in FY23.

Balance Sheet Items

• Addition to PPE: The company added assets worth Rs.589.34 lakhs in FY24, including new corporate offices, factory sheds, plant and machinery, assembly lines, furniture, and office equipment.

• Addition to Intangible Assets: Software worth Rs.165.15 lakhs was capitalised during FY24.

• Other Equity: Other equity increased from Rs. 6272.94 lakhs to Rs.7652.53 lakhs, representing profits earned during the year.