The adoption of electric vehicles (EVs) has a multifaceted impact—both economically and environmentally. Sanjay Aggarwal, president, PHD Chamber of Commerce and Industry, told FE that EVs will not only help solve India’s oil import problem, but also help reduce pollution in Indian cities. “As a signatory of the Paris Climate Accord, India is committed to reduce its emission intensity by 33-35% from the 2005 level by 2030.The EV industry in India is in its infancy, but the FAME-II scheme is expected to provide a major push for early adoption and market creation of both hybrid and electric vehicles by providing subsidies,” he said. Aggarwal added that battery is the most important component of an EV and typically constitutes up to about half of the vehicle cost and weight. “The choice of batteries depends on energy density, weight and costs. India’s biggest challenge is installation of charging infrastructure, without which EV adoption among the common man is impossible,” he said.
Although the EV sector is seeing a sudden spike in sales post lockdown, but to have a sustainable growth and change in consumer behaviour, following are a few recommendations from Aggarwal:
—Mix of EVs, hydrogen (for longer distances) and CNG could provide cleaner transport;
—Public at large will only switch to buying EVs if prices of EVs are competitive with the ones running on fossil fuel. The government should ensure this by providing adequate subsidy through the FAME-II scheme;
—Standardisation of the charging stations is essential. The industry should come up with fast charging options to facilitate adoption of EVs;
—Vehicle financing companies should tie-up with EV companies to promote sales of EVs;
—India does not have reserves of some of the most important li-ion components including lithium, cobalt and nickel used in batteries of EVs. Hence, ensuring a reliable supply not just of the raw materials, but also of the processed functional materials used in the anode and cathode is essential;
—The government should support on multiple levels like on tax cuts/rebates for EV manufacturers, incentives for localisation, low interest financing options for EV buyers, support for R&D;
—Battery and charging technology is rapidly evolving and the associated R&D is expensive, which limits EV-related investments by small/mid-size auto component suppliers. Research institutions and academic institutions like IITs should form a consortium for R&D in EV tech;
—State governments should also come up with EV promotion schemes, like Gujarat and Delhi, to supplement the subsidies given by the central government;
—India, with a large population, has a huge potential EV market, and therefore investors should keep a long-term perspective;
—EV sector will create new jobs and hence the government should also focus on skill development for this sector;
—The recently announced production-linked incentive (PLI) scheme is expected to provide a much-needed impetus to localising manufacturing in the sector.
Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.