Are electric vehicles the future of India?

In last few days, there are many headlines, talks and news regarding “Future of Electric Vehicle in India” and aggressive plans to launch it . Ministers, Experts and Consultants in various areas related to E Mobility are talking positively about Initiative in Electric vehicle Journey and its Scope in coming future.  A group of ministers has been directed to ensure that by 2030 almost all vehicles in the country are powered by electricity as a way to cut oil imports and pollution.

From Mahindra to Bajaj ( From Passenger vehicle, Three wheeler to Two wheeler) are planning to invest in high-end electric technology and also  to enter into the E space by 2020 ( as per plan NEMMP 2020), and, more importantly, that of the positive movement government towards promoting  Electric Mobility requirements.

Companies like NTPC, Hero electric, Honda Motors, Hyundai Motors, Tata Motors, Maruti Suzuki, Mahindra & Mahindra, Bajaj Auto, and TVS Motors  are readying a war chest for the development of electric vehicles.

In fact many companies have already made an announcement regarding investment in various areas like investment of INR 10,000 crs in infrastructure development by NTPC, investment in high-end electric powertrain technology by Mahindra & Mahindra which will be a part of its plan for the future of mobility and ‘electrification of some of its existing and future products’.

Interesting Sales Facts : In the last two years electric vehicle sales have jumped by 56%        (which is a clear indication of acceptance of Electric Vehicle by Customers in India) from 16,000 in FY15 to 25,000 units in FY17, thanks to the FAME scheme and strong focus of the Modi-government on clean mobility.

Opportunities

With the formation of NAB, NBEM and NCEM and formulating NEMMP 2020 policy with schemes like FAME & TPEM , the government has a strong vision of electrifying all vehicles in the country by 2030. It looks aggressive but promising and achievable also. For this it is reportedly working on awarding contracts to companies for development of battery technology, for batter recycling and to develop fast charging infrastructure in the country. Many companies have shown interest in these initiatives and announced their investments to achieve goal of Electric Mobility.

Figure 1  EV statistics India

FAME

Source : http://www.fame-india.gov.in/

Nearly Rs 180 crore has been spent by the government in the form of incentives for buyers of electric and hybrid vehicles since the formation of FAME India scheme. Nearly 1.45 lakh vehicles have benefited from the scheme of which a substantial chunk comes from electric two-wheelers.

Figure 2 : State-wise EV sale in India ( As on May 2017)

India EV

Challenges 

Two Big Challenges  : Charging Infrastructure and Battery Cost

One of the biggest challenges for the EV industry is the lack of charging infrastructure. Today there are no charging stations network like Fuel stations in the country. The lack of charging stations in the country is one of the biggest reasons for people interested to buy electric vehicles shelving the idea.

Many companies have taken some initiatives to overcome this challenge.

Case : Mahindra Reva 

Mahindra Reva Electric Vehicles Pvt Ltd.,  has partnered with Bangalore International Airport Limited (BIAL), owners and operators of the Bengaluru International Airport (BIA), to set up electric vehicle (EV) charging stations at the airport.

 With this tie-up, BIA is the first Indian airport to have EV charging infrastructure in place. Bangalore is home to the largest number of EVs in the country and is now becoming the most EV friendly market with its significant charging infrastructure. Mahindra Reva has installed over 100 charging stations across the city, with customers having access to at least one charging station every 5kms.
The 100+ public EV charging stations in Bangalore include shopping malls, various State Bank of India branches, numerous automotive garages, M&M Dealerships, Mom & ME retail outlets and now BIAL.
EV owners presently have to charge their vehicles either at their place of work or at their homes. There is no organized and well laid-out network of charging stations presently.

Cost of batteries : One of the biggest challenge today is Manufacturing of Lithium Ion batteries in India. There are lot of initiative and support  by government to develop advanced batteries in India . Also there are many small players are trying to enter into this space. But today they are doing only Cell Assembly business to make Li-Ion batteries and all  raw material imported form China and South Korea.

Battery makes up at least 50 percent of the total cost of an electric car. Their maintenance and replacement costs are also prohibitively higher. Moreover, batteries have to be imported from China leading to a cost increase.

High Price

Electric vehicles do not come cheap. Even the base variant of the four seater e2o, one of two electric cars on sale in India, is priced at Rs 7.73 lakh (ex-showrooom, Mumbai) while the top-end is priced at Rs 11.55 lakh.

Are electric vehicles the future in India ?

According to my view, today there are many challenges in EV space like infrastructure, battery cost, battery recycling and others. There are plans by government but implementation is always a big question mark. At the same time government is concerned about fuel security and environmental issues in India.

There is a lot of push by Government  in terms of Electric Vehicle in India like Incentive schemes, support to technology project, GST of only 12% as compared to other vehicles and effective policy changes toward Electric Mobility Mission.

Over half of petrol’s pump prices are for taxes. Petrol taxes are 1% of GDP (gross domestic product) and diesel, 2%. Fully switching to EVs means affecting some 2% of GDP. Of course, oil is predominantly imported, so moving to EVs should be a worthwhile trade-off. Plus, over time, more and more electricity will come from renewable sources.

With focus on EV Policies, development of better charging infrastructure and innovative battery technology with reduced battery cost will define future of EV in India. With all this in place, future is definitely the ELECTRIC VEHICLE in India.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s