India’s road map to vehicle electrification: EV affordability, charging infrastructure & skill development

The government is making huge efforts in the direction of enabling green driving, eco-friendly mobility, and the making of a lucrative EV market. Although, less than 1% of vehicles in the country are electric.

By: | Published: August 5, 2019 3:26 PM
electric vehicles india Image for representational purpose only

India’s dream of becoming Detroit of electric vehicles got further boost once again since the Minister of Finance and Corporate Affairs Nirmala Sitharaman announced the additional tax relief of Rs 1.5 lakh on the interest paid on loans availed for purchasing electric vehicles. The government is making huge efforts in the direction of enabling green driving, eco-friendly mobility, and the making of a lucrative EV market. Although, less than 1% of vehicles in the country are electric.

China, Norway, the US, and the UK are the early birds for EV adoption. Where China’s sales of plug-in hybrid electric vehicles (PHEV) reached to 1.3 million in 2017, PHEV sales accounted for 200,00 vehicles out of total 17,340,700 vehicles in the US, the fully electric car sales grew to 31.2 percent market share in 2018. The UK is also making strides in large scale adoption of EV with successful pilot projects.

Now in India, this EV push has come out of the need for national fuel and energy security, eco-friendly transportation, and pollution control. In the wake of the government’s National Electric Mobility Mission Plan (NEMMP), the Indian auto industry is witnessing a lucrative opportunity for registering double-digit growth as well as winning the global EV leadership. Not only this, if the plan turns out to be successful, the associated industries will also experience a major boost.

The aim of achieving 7 million sales of electric and hybrid vehicles by the year 2020 is sure to bring the varied segments together for handling a multitude of challenges. Identifying the early signs, many auto companies’ EV projects are already underway whereas some just woke up and began investing in research & development on EV.

Well, fulfilling the mission takes a lot more than policies and tax relief because the challenges are quite great in number. All the industry stakeholders need to walk an extra mile to find feasible solutions.

Affordability of EV over internal combustion vehicles

According to a report by Bloomberg New Energy Finance (BNEF), the annual sales of EVs will grow up to 30,000 units in 2022 from merely 2,000 units in 2017. In comparison to other countries, the average vehicle prices are dipping low in India. The average price of a new car in the US is around $30-35,000 but it is $6-7000 in India.

Similar is the pricing for motorbikes that cost approximately $20,000 and $4-5000 in the US and India, respectively. So, the auto companies have to set pricing in a way that it falls into a common man’s budget and along with a similar range. The government must launch more policies like the latest tax deduction on loan interests if people, especially middle class, are to be encouraged to switch to electric vehicles.

Development of sufficient charging infrastructure

NITI Ayog and Ministry of Road Transport and Highways are reflecting on policy proposal of a complete ban on two and three-wheelers powered by internal combustion by 2025. In response to this, automakers are expressing their fear for the biggest of the slowdowns in the industry ever. It will not be deemed wrong to say that India is not ready yet for full electric mobility where power is still an issue.

An extensive power network and good charging infrastructure are required all across the country. This project has to be undertaken firstly in the cities where air pollution levels are high. EV charging stations and maintenance facilities have to be set up on a large scale for which public and private agencies should work in tandem. Also, homes should be equipped with charge points on PAN-India, making legislation for installation mandatory.

Also, the energy grid has to be powered by a higher percentage of renewable energy and reduced carbon fuels. Presently, energy is largely created and consumed on demands. According to experts, sources of renewable energy are going less predictable and energy grid less stable. Solar energy could be a viable solution. But, proper arrangements have to be made for the required infrastructure to utilise solar energy for charging batteries of these EVs.

Also read: Big News! GST on electric vehicles, chargers reduced to 5 %: Hyundai Kona to get cheaper

Meeting demands with skills

We should also be prepared for EV demands that are estimated to increase manifold in the near future. Unarguably, India’s EV market is at a nascent stage where most of the components such as battery cells, motors, and controllers are imported from China. And, the domestic manufacturers are struggling to build a strong and competitive local manufacturing base because the battery costs almost half that of vehicle.

So, it is the high time that India should encourage homegrown auto component manufacturing companies. They should be provided with incentives, financial support, and even upskilling so that they can carve their niche in the EV sector. The youth should also be motivated to opt for a career in the EV segment. There is a growing need for universities and institutions that offer certification courses in EV technology.

Author: Manav Kapur, Executive Director, Steelbird International

Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.

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