Forbes India 15th Anniversary Special

ICEs and EVs will coexist: Sudarshan Venu

The managing director of TVS Motor Company reckons both have much headroom to grow—globally and in India. He, however, emphasises that electric vehicles are at the front and centre of the company's future

Rajiv Singh
Published: May 9, 2024 02:30:05 PM IST
Updated: May 9, 2024 03:00:52 PM IST

ICEs and EVs will coexist: Sudarshan Venu Sudarshan Venu, managing director of TVS Motor Company. Image: Raju Patil

The question was meant to check Sudarshan Venu’s skills in cornering. “In a polarised world of EVs (electric vehicles) versus ICE (internal combustion), which side would you lean towards?” I tried to nudge the automotive enthusiast to take a singular stance. The managing director of TVS Motor Company, however, displays his cornering skills. “I see both growing,” reckons Venu. “In fact, both have much headroom to grow,” he contends like a seasoned biker who understands that when it comes to turning, bikes don't work in the same way as other vehicles. “When on a bike, you need to learn to change direction instead of simply turning the steering wheel to point you in the right direction,” underlines automotive research firm JD Power. “This process is known as cornering,” the global consulting biggie explains the definition.

Venu, meanwhile, explains why the ‘ICE versus EV’ debate can’t be understood in a tight corner. “The core ICE business continues to grow. Both globally and in India, there is a lot of penetration left,” he says in an interview with Forbes India. “We're launching new models, particularly in the premium and scooter space,” he says, underlining that EVs continue to be the centre of the future for the company, which has been growing at a scorching pace. In the fourth quarter of FY24, the operating revenue of the Chennai-based two-wheeler maker jumped by 24 percent to Rs8,169 crore. It reported a standalone net profit of Rs485 crore for the quarter and logged a 14 percent growth in overall sales for FY24 at 41.91 lakh units. “The vision is to transform the quality of life through mobility solutions that are exciting, safe, and responsible,” he says. Edited excerpts:

On credit as the second engine of growth

As a group, we are increasing our presence in financial services, which is the second important vertical for us. TVS Credit has now reached an asset loan of over Rs30,000 crore, has over 12 million consumers on the platform, and will add a few more million this year. As a group, we have raised external capital from Premji Invest and supported a new health insurance company—Galaxy Health and Allied Insurance Company. You will see more moves from us in the financial services space. In the last few years, TVS Credit, the group's financial services arm, has grown disproportionately. We had about Rs10,000 crore of loans when Covid began, and now we are at Rs30,000 crore.

On EVs, ICE & new launches

EVs are the front and centre of the future for us. From a sustainability point of view, we have exciting products such as TVS X, and then there is TVS iQube, which takes care of the digitalisation and connectivity side of the products. We are launching more aspirational products in EVs as well as ICE. Take, for instance, Raider, or the newer families of Apache, including the 310. We are also spending more time on three-wheelers and cargo applications. Some of our vehicles in Brazil are being used for taxi or shared mobility applications. We also work with Rapido, and newer mobility players across the ecosystem.

Also read: Electric vehicles are taking off steadily. How can the Budget help?

On ramping up exports

We've become a bigger global player over the last six years. Now, we get up to 35 percent of our revenues from outside India. It [exports] is something that we're doubling down and are quite excited about. To expand our global footprint, we are strengthening our position in Africa. Despite some short-term challenges and headwinds in the region, we are optimistic about the turnaround, and will continue to recover. We are also going deep into Southeast Asia. We made our maiden foray into Europe by partnering with Emil Frey last year. We are also supporting an electric scooter startup called ION Mobility to strengthen our play across Southeast Asia and ASEAN.

On Norton & e-bikes

If you look at international acquisitions, in keeping with our line of mobility, we looked at luxury and premium mobility on one side, which is where Norton comes into the picture. Electric bicycles are a $25 billion market globally. And Europe is at the core of that market. So, we are using our company in Switzerland for this, we want to expand further into Europe, Australia, the US, and emerging markets, including India. So, we are investing in a full range of products.

Also read: Ola Electric IPO: Bhavish Aggarwal's business has too many risks to ignore

If you look at Norton, we are taking the brand into the future. And to do that, a lot of investment and patience is required. We promised all the customers that we would honour the deposits of the old company as it came out of insolvency. And we have done that. We honoured all the orders of the previous company though we have no legal liability to do so. The new four-cylinder bike will come next year, and the design will showcase Norton’s transition into the future.

On new-age companies and cash burn

Each company plays to its strategy, and I respect what some of the new companies and incumbents are doing. TVS stands for technology, quality and customers. We are focusing on those aspects and building a wide range of products. If you look at the ICE side, which is a more mature market, the quality vehicles are valued. In EVs as well, consumers will understand and appreciate quality. I think this will also lead to Indian brands going more global and standing for quality.