E vehicles: Getting future ready?

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Whenever there is a conversation or discussion on this topic, the first name that comes into my mind is Elon Musk. His brand too: ‘Tesla’. Tesla is one of the successful living brands in electric vehicles. Although another common name is Toyota Prius, one of the most successful electric vehicle on this planet, since 1997. If we talk about India, we had our first electric vehicle in 2001, a small, compact and cute looking car, ‘Reva’. Since then, it remains the only electric vehicle manufacturer in India. This is all good, but what is so urgent about having electric vehicles? Here is some food for thought:

Yes, electric vehicles are the future, but is this the time?

To begin with, we can recall a lot of news from last year’s winter from Delhi, which was smothered and battered by smog the whole of its winter. And it’s not only Delhi; there are other cities of our country too.

We have seen an explosive growth in our economy for the last 2 decades or so. We have held on the tag being the growth engine of the world for quite some time. Yes, this is good news, but the side effects are present too. Yes, economic growth is good, but the impact it has on its environment is unpleasant as we have failed to do anything significantly concrete yet.

If we look at the World Health Organization reports, Human Development Index reports, environmental reports, we being the emerging economy are paying the price by having more than 25 cities in the top 100 polluted cities of the world. As per Greenpeace India report released in Feb 2018, it indicates that people living in eight of every 10 Indian cities breathe toxic dust particles, PM 10, at levels exceeding national safety limits. While various causes and solutions are discussed, it is well acknowledged and understood that 50-90 percent of the pollution in densely-populated urban areas is vehicular.

What the Economic Survey quotes is - “an increase in available disposable income among citizens has led to an increase in the purchase of vehicles and a reduction in the use of public transport. Roads are the dominant medium of travel in the country, and as of 2017 there are more than 230 million vehicles on the road burning petrol and diesel and spewing dangerous fumes into the air.

Keeping this story in the background, we all also know the stories of jams and long queues on the roads in big cities. So, for me this suffices the need for electric vehicles. Also, we all have been reading about how fossil fuels will exhausted in the next 30 50 years.

This is the relevance of electric vehicles.

What is the current automobile market in India?

The current situation is the Indian market is dominated by conventional fuel vehicles. India is the world’s fifth-largest automobile manufacturer and the largest manufacturer of two-wheelers. We produce more than 2.5 crore motor vehicles every year. The automobile sector employs more than 2.5 crore people and contributes around 7% to the GDP. As per Society of Indian Automobile Manufacturers (SIAM), the Indian automotive market is estimated to be $16 billion by 2021.

What is the current situation of electric vehicles in India?

As per Industry research, approx. 25,000 electric cars are sold in India annually. Although there has been a lot of awareness recently about electric vehicles, there are still misconceptions which are being pervasive for a buyer of electric vehicle. Also, lack of proper infrastructure for electric vehicles also deters the people from buying. As per a recent survey done by Velocity MR, a market research and analysis company, about 90 per cent of the Indian car owners would opt for an electric car, provided the right infrastructure is made available, along with optimum support system for maintenance of their electric cars.

The report of the survey suggests that the government should take initiatives to increase awareness about electric vehicles and provide financial assistance in the form of subsidy and reduced road tax. The report also encapsulated the common misconceptions about electric vehicles, for example -perceived low mileage per charge. Currently, the market share of electric vehicles in India is only about 1%. Also, people are looking for almost the same number of features, qualities, models, pricing etc. which they can currently avail in petrol and diesel cars.

In order to boost the electric car segment, the government also needs to step up and take necessary steps to provide the required infrastructure and support to auto companies. Government initiatives will help in promotion and also as the government controls taxes and subsidies, attractive pricing also remains a key component for this market with the government.

Having said this, this does not oblige the manufacturers from their roles. In India, cost efficiency is given a lot of weightage while buying cars. The onus is on car manufacturers to innovate and reduce or find ways to reduce the overall cost of electric car and its components.

What is needed from the government and what is the government doing?

According to NITI Aayog CEO Amitabh Kant, there is no need for a policy for electric vehicles (EVs) as an action plan has been prepared. Further, minister of state for Planning, Rao Inderjit Singh has also confirmed in Lok Sabha that NITI Aayog has submitted a draft to the Parliament proposing steps to develop a strategy for zero emission vehicles and promote electric vehicles (EVs) in India. It has also proposed the formation of six committees that will look in to different aspects required to create a sustainable ecosystem for EVs in India.

The Ministry of Power launched the National E-Mobility Programme in India, which aims to provide a push to the e-mobility ecosystem including vehicle manufacturers, charging infrastructure, companies, fleet operators, service providers etc. Also, the ministry will release a set of guidelines for power distribution companies and EV charging service providers.

Then state-run Energy Efficiency Services (EESL) has also announced its plan to acquire close to 20,000 electric vehicles for government use with an investment of Rs. 2,400 crores. Already 100 electric vehicles are operational in Delhi under this project. EESL will provide e-vehicles which will cater to the growing demand in various government departments. EESL already has in place charging infrastructure at 150 government offices which will be able to charge 500 cars at a time. These electric vehicles are expected to save over INR 5 crore in fuel cost every year and will also protect the environment as this will reduce more than 5.6 lakh tonnes of CO2 emissions. EESL has also agreed to invest close to Rs. 10,000 crores in Andhra Pradesh which is expected to generate employment for more than 1 lakh people.

The biggest support required for this industry is for the Lithium-ion batteries which are being used in electric vehicles. India lacks resources and capacity to manufacture the same. We are currently importing the batteries from China, who has around 55% market share dominance in batteries. The government needs to work out on gathering these critical resources in order to sustain and reduce the cost of these vehicles.

As per a research, the cost of fuel i.e. electricity for EVs is 45% cheaper than petrol and diesel. If all goes planned, electric vehicles will help India reduce its oil imports, saving more than $300 billion of foreign exchange and also it will save 876 million metric tonnes of oil.

From what I understand, the government is developing the trend and transitioning into electric vehicles on the model what China has used. China has been the flag bearer when it comes to use of electric vehicles. It was the first country to introduce electric buses for passenger transportation. Similarly, the Indian government has initiated from itself by introducing electric vehicles to various government departments via EESL. I hope the government pushes this with the same sincerity, with which it has pushed the paper work for electric vehicles. Also, it should make all the stakeholders of the industry partners in this to avoid any knee jerk interventions and disruptions.