Is the future of Indian automotive industry electric and will it pass the sustainability test? | The Financial Express

Is the future of Indian automotive industry electric and will it pass the sustainability test?

EVs are set for a boom in India, which is a huge consumer market, and, if government plans are to be noted, poised to become a major global EV manufacturing hub.

Is the future of Indian automotive industry electric and will it pass the sustainability test?

Bhavaneesh Athikary

Mobility is undergoing a major shift in India as well as globally. The projected numbers, with the Indian EV market valued at $1,435 billion in 2021 and expected to reach $15,398 billion by 2027, reflect a CAGR of 47 percent during 2022-2027 and point to a definite EV-populated future.

Climate change issues and the limitations of fossil fuels have triggered a huge public awareness for a safer and cleaner future and have engendered a policy realignment for the government. As India stands committed to achieving carbon neutrality or Net Zero by 2070, to this end, electric vehicles will contribute significantly.

The FAME-I and FAME-II schemes of the government are intended to boost EV proliferation by creating a favourable demand and bolstering the manufacturing of EV vehicles.

EVs are set for a boom in India, which is a huge consumer market, and, if government plans are to be noted, poised to become a major global EV manufacturing hub. The government’s Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME) scheme, with an allocation of $96.8 million, offers subsidies for two- and three-wheelers, hybrids, e-cars, and e-buses, as well as to establish EV charging infrastructure.

Apart from the central government, many state governments are also leading the transition towards EVs by entering into agreements with manufacturers. The electric vehicle (EV) market should witness inflows to the tune of over $12 billion in the next five years. It is estimated that by 2030, close to 30 percent of all vehicles sold in India will be electric. Already, India is ranked 11th among 15 countries ranked in terms of market readiness for EV adoption as per the GEMRIX index.

For faster and effective adoption of EVs across segments, a few challenges remain to be addressed. Range anxiety, battery safety, and charging infrastructure availability in addition to road quality and driving safety issues are some of the many areas where some more clarity and effort are needed. The overriding issue, however, is sustainability.

The auto industry now increasingly accepts that sustainability involves more than merely reducing road emissions, revealing an understanding of the whole-lifecycle manufacturing and material impact of vehicles.

Since batteries are at the very heart of any EV, issues related to their safety as well as sustainability are of central concern. The two major concerns here relate to vehicle driving range and safety—both user issues and with deep implications for the environment and public health as well. With EV fires due to faulty batteries in the headlines recently, it is necessary to look at EV sustainability through the lens of safety.

Poorly manufactured Lithium-ion batteries or those with inadequate thermal management software can be accident prone. For addressing range concerns, the Indian Government has been rooting for battery swapping, a measure announced in the recent Union Budget. While this allows EV owners to swap discharged battery blocks with freshly charged ones, this could lead to recycling issues in the absence of a suitable policy.

A sustainability approach to manufacturing EVs needs to encourage and moot processes which synchronise design, testing and engineering. This can dramatically reduce physical testing and failed products, providing manufacturers with the opportunity to address efficiency and sustainability at the drawing board stage itself. For effective sustainability, smarter product development and manufacturing approaches can also improve competitiveness by cutting time-to-market by 25 percent. Lighter, more recyclable materials and more autonomous manufacturing can help resolve the stress between consumer demand and impacts on the planet. This will help in progressively reducing costs and development timelines for greener EV component designs.

EV sustainability is also an eminent policy domain. The Government has an important role to play in setting up stringent safety standards such as AIS 156 and building policies to encourage R&D in cells and the complete battery system. On the supply side, to make EVs more affordable, and consequently sustainable and environmentally friendly, traditional high-volume manufacturing lines need to become nimbler.

OEMs must therefore relook at how they have been doing business and adapt to more efficient and closely integrated processes. Living up to the vision of an environmentally friendly automotive industry means moving beyond simply eliminating tailpipe emissions to creating lighter, more sustainable materials and manufacturing methods. Emerging smart manufacturing approaches are vital to bringing these innovations to market within demanding deadlines while remaining profitable and responsible, both for us and a more sustainable; greener future.

The Author is Bhavaneesh Athikary, Senior Manager, Automotive Lead, Indo-Pacific, Hexagon

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