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Can India Build on the Electric Vehicles Surge it Witnessed in 2022?


Energy Review, Vol 5. Issue 05. 2023

India is being looked at as a bright spot in the global economic landscape. The country has stayed resilient to the global headwinds, a general slowdown in the economy, war and the after-effects of the pandemic. A key aspect of this has been the promise of sustainability that it holds in the future.

As one of the signatories of the Paris Agreement, it is committed to safeguarding the environment. To achieve this, India has set a goal of around 500 GW of power from non-fuel sources by 2030 and the use of electric vehicles (EVs) is definitely another measure.

With India now occupying the G-20 presidency and various global investor summits happening across the country bigger things are expected and the adoption of electric vehicles (EVs) is definitely one of them. As this happens the country can become a leader in ushering in a sustainable revolution and charter the path for many other nations to follow.

Worldwide, countries are stepping up their efforts to make the planet greener through key initiatives. It involves cutting down carbon emissions and introducing more sustainable elements. The Government of India is also in the race as seen in its push for EVs. The country which is one of the largest auto markets in the world is also trying to make its presence felt innovatively in the EV space. Electric rickshaws or ‘e-rikshaws’ as they are popularly called may be an example. EV has been a late entrant in the Indian automobile landscape and it represents only a fraction of the percentage of vehicles on the roads as of now. However, it is gathering momentum.

The sale of EVs in the last fiscal was undoubtedly encouraging. As per data by the Society of Manufacturers of Electric Vehicles (SMEV), 727,370 electric two-wheelers were sold in 2022-23 as against 252,550 in 2021-22. The sale of electric three-wheelers was also encouraging with 401,882 sold in 2022-23 against 172,543 in 2021-22. In the four-wheeler segment, 48,105 electric vehicles were sold in 2022-23 as against 19,782 in 2021-22 while 1,917 electric buses were sold in 2022-23 against 1,611 in 2021-22. There has been an overall growth in every segment which is encouraging.

Industry analysts point out that the demand for high-speed electric two-wheelers and three-wheelers, especially for last-mile deliveries and e-commerce, has been the reason for this among several other encouraging factors that enabled this surge in numbers.

Reports suggest that Asia would continue to be the world’s largest producer and consumer of EVs besides being the market for batteries and battery materials in the immediate future. India is supposed to take the leading role in this game plan. However, India has a lot of ground to cover to have a meaningful share of the global market.

While the country holds a strong potential to be developed as an EV hub, there are several things that should eventually factor in to make this possible on the ground. Issues such as inadequate charging infrastructure, high initial cost, innovation in battery technology and availability of only a smaller number of vehicle models are some of the issues that may need further refinements.

Expensive battery technology makes EVs a costly affair to potential buyers. The absence of a sufficient charging network makes them less popular among people who, owing to peculiar Indian situations, are more conscious of the distance they can drive their vehicles than anything else.

Thus, to materialise the dream of 300 million EVs by 2030, and more so in the backdrop of the country’s EV manufacturers coming forward to invest as big an amount as $10 billion, the union, as well as state governments, may have to reshape or rejuvenate many of their schemes such as Faster Adoption and Manufacturing of Electric Vehicles (FAME), National Electric Mobility Mission Plan (NEMMP), Production Linked Incentive (PLI) Vehicle Scrappage Policy, Go Electric campaign, National Mission on Transformative Mobility and Battery Storage and Model Building bye-laws of 2016.

While many of these policies played a pivotal role in making EVs popular among the common man, experts feel that opaque policies have always hindered the desired effects on the ground. Instead of either stopping or reducing subsidies under various schemes, the government should come out with more such strategies at least for the two-wheeler and three-wheeler segments.

With better grid connectivity for charging stations, lower tariffs and battery swapping facilities, the establishment of special e-mobility zones would bode well in popularising the adoption of EVs even among car owners. According to experts, the rise in fuel costs coupled with the lower maintenance cost for EVs when compared to internal combustion engine (ICE) vehicles is striking a chord with vehicle buyers. The government is also pushing for e-buses in public transport and as a result, we can expect to see more e-buses coming on roads in the immediate future.

Major vehicle manufacturing companies like Tata Motors, Mahindra & Mahindra and Hyundai are already manufacturing EVs which would augur well for the sector in future. Attractive designs blended with impressive performance are giving some edge to companies. More advancement in battery technology and local manufacturing would further provide a boost to EV adoption.

India relies on EV components from South America, Australia, China, and some other countries. No cell manufacturing happens in India and what the country offers is merely PLI which is concentrated in the hands of about three players. Moreover, the biggest deterrent to EV popularity is the battery cost which comes to about 45 per cent of the vehicle cost. The surge in demand for battery materials escalated the prices of EVs in 2022. Battery prices were as high as about $160/kWh in the year. Although lithium discoveries have happened in Kashmir, Karnataka and some other parts of India, we still have a long way to go in becoming self-reliant.

Another big challenge for some of the EV models is safety issues as several instances of them suddenly catching fire were reported from many parts of the country in recent times. This was seen as a glitch forcing some of the manufacturers to put the sale of such vehicles on hold.

This could be overcome by using good quality cells, ones that have passed the critical tests, adheres to the charging spectrum and has an effective battery management system. Temperature sensors, gas sensors and smoke sensors need to be deployed to detect and pre-empt the cause of the fire.

Waste management is another concern that the industry needs to work on. Although batteries could be recycled there would come a time when that too wouldn’t be possible. Companies need to set up disposable plants for this. Stringent action needs to be taken against those who don’t follow the rules and regulations.

Electric cars may take time to be a popular choice but they may penetrate the auto landscape in the long run taking India closer to the realisation of sustainability goals.

(Mr. Pradeep Kaimal is a Delhi-based energy journalist. He can be reached at ■□■


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