Is India ready for Electric Vehicles?

Is India ready for Electric Vehicles?

Is India ready for Electric Vehicles? 

This question is relevant in the backdrop of India’s NITI Aayog proposal to push for full conversion to EVs from internal combustion engine (ICE) three-wheelers by 2023, and two-wheelers (for engines with or below 150 cc capacity) by 2025. Before answering this question with a Yes or No, let us look into the various factors that will help us in answering the question.

Political:

1. The government’s Faster Adoption and Manufacture of Electric Vehicles scheme also known as FAME released in March 2015 aimed to incentivise and catalyse the electrification and allocated INR 895 Crore. Under phase II of FAME, the government is planning to extend financial support of INR 8,730 Cr for three years.
2. Individual state governments are making a push for Electric Vehicles. For example, Tamil Nadu has set a goal of INR 500 Bn in investment in EV manufacturing and created a comprehensive EV ecosystem in the state and thereby targeting the creation of 1.5 Lakh new jobs.
3. The government-backed Energy Efficiency Services Ltd (EESL) has issued tenders for 20K EVs to be deployed across the country for government use.

Economic:

1. Today, the world’s attention on EVs may justly feel disproportionate. In 2018, of the over 86 million passenger vehicles sold globally, just two million were EVs. There are just 5 million EVs today on the roads.
2. Ola Electric recently raised $14.8 Mn from South Korean automobile maker Hyundai and its affiliate Kia Motor to build India specific EVs. The funding was part of a larger funding round, where Hyundai and Kia invested $311 Mn in Ola Electric and its’ parent company ANI Technologies.
3. Walmart-owned Flipkart also announced plans to introduce electric vehicles for its last-mile deliveries. The ecommerce company aims to replace nearly 40% of its existing last mile fleet of delivery vans with EVs by March 2020

Social:

1. As per the data of Society of Manufacturers of Electric Vehicles, only 22,000 units of EVs were sold in India by March 2016, of which 2,000 were four wheelers. At the same time, sales of electric cars grew at a staggering rate of 94% from 2011 to 2015 worldwide, led by China, US, and Europe.
2. At current petrol prices, the Total Cost of Ownership (TCO) for electric cars is costlier than for petrol cars with the daily running of less than 40 to 45 kilometres.  Most people in Indian cities travel about 35 to 40 kms a day between their homes and workplaces So, most Indian prefer petrol or diesel cars over EVs.
3. Advantage of CNG over Electric Vehicles. An already popular alternative fuel, EVs are likely to face strong competition from CNG-run vehicles considering their cost advantage for passengers with low daily usage. A TCO analysis for electric and CNG vehicles suggests EVs offer a favourable proposition only above a daily running of 170-180kms, making it more attractive for commercial fleet applications than for the individual buyer.
   

Technological:

1. At the moment, rare metal lithium is being used to make batteries for EVs. However, there has been a key finding of lithium reserves in India recently. Around 100 km from Bengaluru, Mandya is a city in south Karnataka where lithium reserves were discovered. This can be a big boost for EVs and also expect better technology for the battery to significantly reduce costs in the future. 
2. New-age EVs are also incorporating a number of passenger safety-oriented features to augment overall security for both drivers and the vehicle. Specifically, in a country like India where the safety of women is an issue of grave concern, EVs have been introduced with a host of smart features like geo-fencing and GPS technologies to locate vehicles quickly and immaculately.
3. For those travelling on a fixed route, the geo-fencing feature reports any abnormal movement of the vehicle for near and dear ones. It also offers maps of available parking spaces nearby and gives persistent reminders to drivers for any kind of malfunction that the vehicle is going through, or might occur.
4. By leveraging technology, electronic vehicles can also ring in smart alarms for over-speeding and offer reminders to users for making timely insurance payments or regular servicing visits.

Legal:

1. The Department of Heavy Industry (DHI), being the nodal department for the automotive sector, formulated a scheme for the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME).  FAME aimed to support the development of the hybrid and electric vehicles market and the allied manufacturing ecosystem by focusing on technology development, demand creation, pilot projects and charging infrastructure; and utilise the funds allocated for FAME by offering a mixture of demand side incentives, concessions and state level incentives. 
2. FAME II has been proposed to be implemented over a period of three years with effect from April 1, 2019. It is to focus on three broad verticals: a) Demand incentives b) Establishment of network of charging stations c) Administration of FAME II
3. Bureau of Energy Efficiency (“BEE”) shall be the Central Nodal Agency for the implementation of EV Public Charging Infrastructure. All the relevant agency, including the Central Electricity Authority, shall provide the necessary support to the Central Nodal Agency.
4. Roll out plan for Implementation of Charging Infrastructure:
   a) Phase 1 (1-3 years) All Mega Cities with population of more than 4 million as per census 2011 along with all expressway connected to these Mega cities.
   b) Phase 2 (3-5 years) Big cities like state capitals, union territory headquarters. Important highways connected with the Mega cities.

Environmental:

1. According to a study by Harvard Extension School, Electric vehicles reduce pollution only if a high percentage of the electricity mix comes from renewable sources and if the battery manufacturing takes place at a site far from the vehicle use region
2. Electric cars also have impacts arising from the manufacturing of the vehicle. Since battery packs are heavy, manufacturers work to lighten the rest of the vehicle. As a result, electric car components contain many lightweight materials that require a lot of energy to produce and process, such as aluminium and carbon-fibre-reinforced polymers. Electric motors and batteries add to the energy of electric-car manufacture
3. As of 2011, the Toyota Prius battery contains more than 20 lb (9 kg) of the rare-earth element lanthanum, and its motor magnets use neodymium and dysprosium. Common technology for plug-in hybrids and electric cars is based on the lithium-ion battery and an electric motor which uses rare-earth elements. The demand for lithium and other specific elements (such as neodymium, boron and cobalt) required for the batteries and powertrain is expected to grow significantly due to the future sales increase of plug-in electric vehicles in the mid and long term.

After looking at these various factors, although the initiatives by the government and the response by the manufactures has been great, I conclude by saying that as of now, India is not ready for electric vehicles yet as more Indians prefer petrol, diesel or gas driven cars. They do not seem to be ready to buy and use the electric cars due to their slow pick up, slow speed and non-availability of electric charging centres in the vicinity of their area. India lacks significant infrastructure and necessary technology to support Electric Vehicle manufacturing. Efficient components such as high-density batteries remain a key challenge. Though the market in India has given a tepid response to electric vehicles but there exists immense opportunity for the growth of electric vehicles.