After 71 years of independence in 1947, India stands at the deterministic crossroads of economic growth and energy needs for over a billion people, while facing challenges to lower carbon emissions and to improve energy security. India’s transportation sector growth is one of the significant contributors to deteriorating air quality in the urban cities, accounting for 30% of the total fine particulate matter (PM2.5) emissions. Emissions from vehicles are one of the primary contributors to deteriorating ambient air quality in major urban areas of the Indian subcontinent, leading to increased morbidity and mortality and in turn, decreased economic productivity. With the explosive growth in their numbers in the last decade, these vehicles are also emerging as significant contributors to greenhouse gas emissions. This realization has put public and regulatory pressures on the industry to plan strategies for clean alternative transportation technologies. One such technology is Electric Vehicles, but is India Ready for Electric Vehicles?
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The ever-increasing concern on environmental protection and energy conservation has intensified the interest in Electric Vehicles (EVs) for automakers, governments and the customers alike. The National Electricity Mobility Mission (NEMM) Plan promises to deploy an ambitious six to seven million electric vehicles in India by 2020. India is taking significant policy initiatives to leapfrog and transform electric vehicle (EV) adoption to embrace a tryst with electric transportation.
What are Electric Vehicles and why is it that the country is making such ambitious plans for its adoption?
Electric vehicles, as the name suggests uses one or more electric motor for propulsion. They are not dependent on petrol or diesel. Electric cars can either be powered through a collector system by electricity from off-vehicle sources or can run on chargeable battery, solar panels or electric generators that convert fuel into electricity. Due to the capability of offering reduced fuel consumption and reduced carbon dioxide emissions, electric vehicles are proving to be promising devices in a smart grid.
Factors that prove India is ready for Electric Vehicles
Here are some facts that prove that India is ready for Electric Vehicles:
- According to the 2018 report by the World Health Organization, 14 of the world’s most polluting cities are in India. Transportation accounts for roughly 11% of carbon emissions and is one of the significant sources of greenhouse emissions in the country.
- The Government of India is already providing incentives through FAME (Faster Adoption and Manufacturing of Electric Vehicles) from the year 2015 to reduce the price of EVs in India.
- The Government has also approved pilot projects, charging infrastructure projects and technological development projects worth $40.5 Million in the Union Budget 2018 for establishing EV project in the country and getting rid of fuel vehicles entirely by 2030.
- Maruti Suzuki, India’s leading automobile company, has invested 1200 crore in setting up a new lithium-ion manufacturing plant in India. This investment is a huge step given Maruti Suzuki enjoys 50% market share in the country. Mahindra is also planning to invest in this direction.
- The overall costs of EV ownership are lower than fuel powered cars. Because around 75% of Indians drive less than 1000 kilometers per month in a car, the prices would be significantly lower.
- With the introduction of GST in the country, the Government of India has lowered the tax rate on electric vehicles to 12% as opposed to 28% charged on petrol and diesel vehicles. This is expected to reduce the costs of EVs in the country.
- Nagpur has already been taking steady steps in becoming an EV friendly city. Mahindra Electric, Ola and Government of India partnered to launch 200 EV cabs in the town in 2017.
- While Mahindra, Maruti Suzuki, Hero Electric vehicles are already registered electric manufacturers in the country, players like Toyota, Nissan and Tesla are also planning to launch their respective models in India.
Alternative fuel has been the big buzz word amongst automakers for the last few decades, and the rise of electric vehicles seem more promising than fossil fuels, hydrogen fuel, etc. Electric vehicles have started to show its footprint across the board from 2-wheeler up to heavy commercial vehicles which realize the rapid development of electric vehicle powertrain components and new lightweight materials. Even though the technology in EVs has grown multi-fold, several hurdles are slowing their growth. Two key vehicle market characteristics in the country are- a relatively benign urban driving profile and a price elastic market demand.
Factors that prove India is not ready for Electric Vehicles
- There is a serious issue of charging infrastructure for both wired and wireless charging system. Standardization to the technical aspects of the EVs charging, range and price are the major barriers for deployment.
- Currently, there is a very small scale of AC and DC charging stations available in India, which is installed by EV manufacturers. India has around 56000 fuel stations but only 206 charging stations. Even though the charging infrastructures requires low investment when compared to fuel stations, still the infrastructure is not up to the mark.
- Cost plays a significant role in the purchase decision in India. In India people, on an average spend less than $10,000 on a car, and electric vehicles fall in a range quite higher than this. They cost about 1.5 times higher than in conventional vehicles. According to a report, less than 15% of Indians are willing to pay more for electric vehicles. So, only when the prices of these vehicles are lowered, people will consider buying them.
- EVs run mostly on lithium batteries, and it accounts for 7% of the total cost. India does not have lithium reserve which means that we are completely dependent on its imports. India needs to invest and expand its mineral supplies if it wishes to adopt only electric vehicles in the future.
- Currently, India does not have a well-formulated policy for Electric Vehicles. The proper policy should be framed if we are to make it the next big thing in the automobile industry.
- Long charging time required in the case of electric vehicles is also an impediment to the success of electric vehicles in the country. Technology to develop long term battery supply and better battery management system is yet to be developed in India.
- Electric vehicles run at a maximum speed of 85 km/hour which is far less than the speed offered by fuel vehicles in the country. If time factor is considered then significant development needs to be done in this area as well.
- Automobile sector accounts for 7% of India’s GDP. A sudden switch from fuel to electric vehicles can affect India’s annual growth rate in economic terms.
Yes, electric vehicles are the need of the hour, given the significant amount of pollution caused by automobiles in the country. The government of the country has been working dedicatedly towards the mission of selling only electric vehicles in the country by 2030. Robust infrastructural development and lower cost structure would make this dream a reality in the near future.
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