Delays in gaining testing and compliance certification for the new electric vehicle (EV) battery safety regulations released in late 2022 negatively impacted Olectra Greentech Ltd.’s Q4FY24 sales. The company chose to have online testing done in China because there were insufficient testing facilities in India. This strategy, meanwhile, was unable to obtain timely certification.
To address passenger safety concerns in the wake of a run of EV fire accidents in India a few years ago, the Ministry of Heavy Industries enforced the new norms, which call for rigorous testing at various levels, including the cell, battery management system (BMS), and the full battery pack.
The planned deadline for attaining certification was April 1, 2023; however, due to industry-wide issues in completing the requirements, the deadline was finally extended to October 1.
The company’s CFO B Sharat Chandra said during the recent post-result analyst call, “I would like to elaborate that the Government of India has introduced the safety norms for the battery where the testing and compliance certification are required to be done. As the facilities were not available in India, the testing has to be done online in China. It took more time, and it was beyond our control and capacity.”
“We successfully completed all the trials and obtained the requisite certificates, but in the interim, we lost about two quarters and post-certifications. There were constraints in ramping up production by the manufacturers and vendors. So that is the reason the quarter four and the full year got impacted, and that is one reason,” he added.
Olectra Greentech sold around 541 e-buses in FY24, compared to 580 units registered in FY23. During Q4FY24, the company sold about 131 units. The company manufactures 7-metre, 9-metre, and 12-metre electric AC buses under its product portfolio, with an orderbook of 10,969 units on hand. The company also has testing grounds with its 6×4 electric tippers.
“This quarter (Q1FY25) will be subdued because we are in the process of transition. We are hoping the numbers will be in line with quarter four, or slightly better than quarter four. We are targeting 150–200,” Chandra continued.
With the transition to its new plant already underway, the company is targeting selling 2000 units in FY25, followed by 5,000 units in FY26 and 10,000 units in FY27, wherein its existing orders will be completed, top executives added.