The joint venture between FRIWO and the Indian UNO MINDA Group, launched two years ago to provide electric propulsion solutions for two- and three-wheeled vehicles in India, is now operating at full capacity following the production ramp-up in 2023 at their shared facility south of New Delhi. Currently, six out of the seven leading producers of two- and three-wheeled vehicles are customers of this joint venture. These include not only Indian manufacturers but also the largest motorcycle manufacturers from Japan. Three of these customers have already begun mass production of electronic components and e-mobility solutions, while three others are still in development projects that are also expected to enter mass production in the near future. Additionally, there are further advanced discussions about orders that could significantly boost revenue potential in the coming years. In light of this, there have been talks about the necessary expansion of the existing production space, which currently spans around 15,000 square meters. UNO MINDA holds a 50.1% stake in the joint venture, while FRIWO holds 49.9%.
New Indian Government Incentive Program Could Drive Additional Demand
The joint venture also anticipates substantial support from the Indian government. The existing government program to promote electric vehicles, FAME (Faster Adoption and Manufacturing of Electric Vehicles), is expected to receive a significantly expanded third edition. This new edition is rumored to have a budget of nearly 100 billion Indian Rupees (approximately 1 billion Euros). Reports suggest that the plan is to be implemented within the first 100 days of the new government, which has just been elected. FAME III aims to provide financial incentives for the acquisition of electric two- and three-wheeled vehicles.
The joint venture is already a market leader in e-mobility propulsion solutions for two- and three-wheeled vehicles in India and aims to capture a substantial share of the market, which is expected to reach around 4.5 million vehicles by 2027. The government’s incentive measures and initiatives to combat severe environmental pollution are expected to increase the market share of electric vehicles to about 15% of the total market potential for two- and three-wheeled vehicles, according to experts.
“We are very pleased with the development of our joint venture in India. Mass production for several customers has already begun at our new production facility, and we are in advanced development projects with others. The anticipated new incentive program from the Indian government for increased e-mobility is expected to further support our growth ambitions. Additionally, as planned, we are in promising discussions regarding the expansion of our involvement in other Southeast Asian countries, such as Indonesia and Vietnam,” commented Rolf Schwirz, CEO of FRIWO AG.
FRIWO Anticipates Increasing Licensing and Participation Revenues
FRIWO receives a 4% license fee from the joint venture for contributing its unique technological expertise in electric propulsion systems once the venture reaches profitability. This arrangement allows the company to expect significantly increasing licensing and participation revenues in the coming years. However, due to the necessary initial investments, no significant revenues are expected in the current fiscal year.
Significant Market Potential in Other Southeast Asian Countries
Similar to India, other Southeast Asian nations are increasingly striving to boost the share of e-mobility in road transport. This is especially true for Indonesia and Vietnam, where FRIWO is in advanced discussions to establish partnerships with regional producers of two- and three-wheeled vehicles. They also plan to integrate parts of the production through the existing Indian joint venture partner UNO MINDA. The resulting substantial market potential is further supported by the efforts of leading Japanese vehicle manufacturers in the region to establish a unified solution for two- and three-wheeled vehicles across Asian markets and potentially worldwide. FRIWO has already established successful customer contacts through the Indian joint venture. Significant revenues from these efforts are expected no earlier than 2026, depending on the planned collaboration with regional partners, and would be directly attributed to FRIWO rather than recorded as license income.