The Indian automotive market has kept electric vehicles (EVs) during a prolonged state of purgatory despite the apparent benefits being written on the wall—in bright neon letters. as long as they have far fewer parts to work, and thus, tons less maintenance, EVs have a leg abreast of the practicality ladder, straight-off-the-bat.
It’s not just the very fact that their moving parts are on a mean a fifth of the amount found in an indoor combustion vehicle. It’s that EVs are intrinsic to the autonomous, connected and shared sort of mobility that we must gravitate towards for the sake of sustainability. We’re gone wondering “if” we should always make the switch; the question is “when”. and therefore the answer is “yesterday”.
The depredations of the SARS-COV-2 pandemic have only served to increase the limbo during which India’s EV infrastructure is stuck. Range and refuelling still remain a pertinent concern, as do battery prices, despite having fallen by 85 per cent globally, within the last decade, consistent with a report by Avendus Capital.
But the pandemic has led to the type of commercial ferment that’s ripe with possibilities. additionally thereto, environmental and geopolitical concerns appear to be at the forefront of our collective consciousness and will push us towards substantive about-face.
Until 2016, the EV market appeared decidedly sparse, with only cars just like the poky Mahindra e2o appearing as flag bearers of electrical mobility. The e2o, despite its refinement and charm, did not address problems with range anxiety and price – issues which still persist to the present day.
Despite the subsidies offered by the celebrity II scheme, India continues to rely heavily on exports to bring-in vast supplies of lithium-ion cells – the chief component in battery electric vehicles (BEV). Between 2018 and 2019, India quadrupled its imports of lithium-ion, depending largely on countries like China and South Korea on the import of raw materials. With the central government recently announcing a possible import tax on lithium-ion, in an attempt to scale-down trade ties with China, the stage appears to be set for homegrown lithium-ion batteries, with states like Gujarat and Telangana being earmarked for heavy-duty local lithium-ion production.
That said, India continues to stay low in mineral reserves required to supply the batteries. Namely: lithium, cobalt, aluminium and copper. But that’s far away from our only concern – poor charging infrastructure, lack of swapping stations and poor penetration of low-cost mobility models – that dominate India’s automotive sector – by OEMs thanks to the high cost of EVs still function challenges. Obviously, manufacturers of high-end cars aren’t facing an equivalent problem, since all of them are likely to possess an electrical version of their existing models by 2025, if not a totally electrified fleet.
Under the recent slew of incentives highlighted by last year’s FAME II scheme, the govt has made an outlay of Rs 10,000 crore, for 3 years, with a tenth of the sum put aside for charging stations. additionally thereto, this year’s annual budget slashed GST on electric vehicles to five per cent from the previous 12 per cent (although the GST on raw materials continues to remain high) alongside a Rs 1.5 lakh deduction in tax for interest paid on loans.
However, consistent with a report published by Frost and Sullivan in April, it’s e-rickshaws, e-autos and e-two wheelers which will proliferate in numbers and can account for 4 million units by 2025. The range of incentives proposed by FAME II also shall generate gradual demand for electric mobility by supporting 700 e-buses, 5 lakh e-3 wheelers and 10 lakh e-2 wheelers – a target it’s fallen in need of, considerably since 2019.
The SARS-COV-2 pandemic has certainly impeded the natural trajectory that FAME II’s schemes were to follow, but it’s also served as a crucible, creating fresh opportunities and drawbacks. For starters, the rising cost of fuel could nudge potential customers towards EVs, particularly within the two-wheeler segment which is probably going to ascertain a pointy rise in sales, due to the hazards presented by conveyance. At an equivalent time, India’s burgeoning EV startups could find it challenging to secure funding, especially taking under consideration the recalcitrance shown by nationalised banks in offering loans for EV ventures.
It’s clear that, within the foreseeable future, the EV offensive in India is going to be led by two-wheelers, with startups like Ather Energy, Okinawa and Revolt having made in-roads into the two-wheeler market and therefore the government promising subsidies within the segment. Electric three-wheelers also will gain prominence, in tandem with the increase in e-commerce. As for electric buses likely to be the evangelists for conveyance.
A larger and bigger section of the population taking cognizance of the shortage of electrical infrastructure shows that EVs have managed to grab the country’s attention. They’re also spread more widely across the worth spectrum with cars just like the Tata Nexon EV starting at Rs 13.99 lakh (on-road Rs 14.81 lakh in Mumbai), while Mercedes-Benz’s EQC will likely sit on the opposite end of the worth spectrum.
It’s uncertain where charging infrastructure ranks on our current plan for economic recovery. because the global car market recovers from a slump in EV sales, due to large markets like China pulling back on incentives, combustion vehicles are likely to ascertain a surge in sales, both in India and overseas, but the compass for mobility continues to point sharply towards electric cars. What manufacturers need are guaranteed incentives within the sort of tax exemptions, lowered permit costs and tariffs on charging EVs. With India’s economy likely to pick-up after the year 2022, a delay in widespread electrification is inevitable.