RESOURCES - BLOGS

Electric Vehicle – The Future of Mobility

Mobility Maintaining Sustainability

Indian automobile industry is passing through a radical transformation in terms of design,
production arrangement, material of construction,
safety systems and above all, the transmission technology. Automakers affirm that now on mobility will be drastically different fromwhat it used to be in the past and in the heart of this difference is eMobility.

The given facts & figures points towards the need for this transformation as well as India’s commitment.
The agenda is towards economics, convenience and above all, sustainability.

With about 5.9 million Km of total road length in 2021, India’s road transport constitutes close to 65%
of total goods transport and about 90% of total passenger transport.

A low vehicle penetration compared to developed countries pushingIndia’s vehicle sales (combined 2W, 3W, Passenger and Commercial vehicle) at a faster pace.

Transport sector consumes 1/3rd to total crude oil consumption in the country out of which 80% is consumed by road transport.

India imports about 84% of total crude oil demand in the Country, thus heavily dependent externally for its energy needs. It drains foreign currency.

India was ranked 5th among world’s most polluted countries in 2019 and in the same year, 6 out of the world’s 10 most polluted cities were in India.

With 270 million T of CO2 emission in 2016, transport sector in India is the third highest contributor of Green House Gas (GHG) emission.

India has committed to reduce Carbon foot print by 33- 35% by 2030 compared to 2005 levels.

Minister for Road Transport and Highways projects adoption of electric vehicles to form 30% of all private cars, 70% commercial vehicles, 40% buses, and 80% two-and three-wheeler sales by 2030.

Supportive Policy Initiatives Driving the Sector

Government of India (GoI) through various ministriesis pushing the transport sector hard to adopt carbon neutrality.

Ministry of Heavy Industries and Public Enterprises (MoHI&PE)

Ministry of Road Transport and Highways (MoRTH)

Ministry of Power

Ministry of Housing and Urban Affairs (MoHUA)

Ministry of Finance

Ministry of Environment, Forest and Climate Change and

Ministry of Science and Technology.

The concerted efforts of all these Ministries is the successful rollout of several policies and the crucial policies being -

FAME India Scheme: Faster Adoption & Manufacturing of (Hybrid &) Electric Vehicles (FAME) Launched in 2015 for promoting growth and early
adoption of hybrid and electric vehicles in the country. FAME-II scheme was launched with a budget outlay of US$ 1.3 billion (Rs. 10,000 crore)
to support 1 million e-two-wheelers, 0.5 million e-three -wheelers, 55,000 e-passenger vehicles and 7,000 e-buses. The government extended the scheme until 2024.

PLI Scheme: The government introduced Production Linked Incentive for Advanced Chemistry Cell Battery Storage (PLI-ACC) scheme.
The scheme is expected to boost India’s battery infrastructure. As per the Union Budget, the total outlay for the scheme is US$ 2.45 billion (Rs 18,100 crore),
which would be disbursed to beneficiaries over five years once the manufacturing facility is set up. The PLI Scheme for the auto sector is open to existing automotive companies as well as new investors.

Battery Swapping Policy: A wide-spread charging infrastructure is essential for EV adoption. In this regard, on April 22, 2022, NITI Aayog released a draft battery swapping policy which will be valid until March 31, 2025.
The policy will be implemented over a period of 1-2 years from the date of launch of the policy and will cover all metropolitan cities with a population greater than four million.
The second phase will be implemented over 2-3 years from date of launch of the policy and will cover all UT’s and major cities with a population greater than 5,00,000.

Supportive Policy Initiatives Driving the Sector

The first and the foremost advantage of EV is the positive impact it will have on the environment due to no-emission. Together with other advantages, EVs pose a strong challenge to the conventional mobility.

Priority to the environment – Zero carbon emissions from EVs will help reduce air pollution, which is a serious issue in almost all the major cities in India.
As per the Climate Risk Index 2020, India ranks atnumber 5 for its vulnerability to climate change.
Going green in terms of mobility is only the beginning.

Cost of maintenance - The major cost in an EV is the cost of replacement of the batteries. With the passing of time and development of better technology, this cost is also expected to come down.

Safe to drive – EVs are growing in popularity throughout the global market for their ease and safety. These vehicles undergo the same testing and fitness checks as other fueled cars. EVs normally have a lower center of gravity because of positioning of the battery and this makes them more stable than traditional cars.

The Sector is Gearing up to Challenge the Bottlenecks

While there are advantages, there are some disadvantages too and that is because of the fact that the technology / design is in the evolving stage. These challenges are,

Insufficient framework – EVs need specialized infrastructure primarily related to charging. To attract people specially for long distance travel, the need for charging infrastructure across the country is important.

Post-sale service – The post-sale services for EVs areyet to develop. The scenario, however is changing rapidly.

Road conditions – Poor condition of roads affects the longevity of the vehicle. Since India is already lacking the ideal infrastructure for an EV, automakers will have to wait for the Indian customer to fully embrace an EV.

Push and pull created in the market driving growth

EV market in India is estimated to grow at a Compound Annual Growth Rate of over 20% in the current decade. The push and pull factors injected in the system are expected to be the major reasons.

Wile in the push side the major policy supports like, FAME and PIL schemes are helping industries to optimize cost and remain competitive, in the pull side, increasing price of fossil fuel, tax incentives for EVs and reduced maintenance cost are driving growth.

EV Market in India attracts huge investment potential

EV market in India opens up plethora of business opportunities across three key segments – mobility, infrastructure and energy. These include opportunities in EV franchising, EV OEM market, battery infrastructure, solar vehicle charging and battery swapping technology among several others. According to NITI Aayog, the complete transition to EVs will require a total investment of US$ 267 billion (Rs.19.7 lakh Crore) in EVs, battery and charging infrastructure. 100% foreign direct investment (FDI) under automatic route, presence of Tesla, Hyundai, Kia, Honda etc., in the Indian EV market is expected to attract more foreign players.

The interesting aspect of EV market is that several SMEs and new generation entrepreneurs are challenging the large auto majors in India. These new generation entrepreneurs are active in entire value chain of EV including developing technology solutions, building new designs of EVs and most importantly batteries& charging infrastructure.

Overall, the market is growing fast making it attractive for both domestic and foreign investors.