Will EVs throng Indian roads in larger numbers in the coming future?

Posted on 28 Jun 2021

As petrol and diesel prices sky-rocket to over Rs.100 per litre, the Indian electric vehicle (EV) industry is making rapid strides to provide the wary public with a viable alternative, especially in the two-wheeler and three-wheeler segments.

Many factors such as surging pollution levels which is taking a toll on health and well-being, the move to reduce costly oil imports, and government thrust to uplift the EV infrastructure, are perhaps accelerating India’s transition to EVs.

China had successfully been treading the EV mobility space and India is now beginning as it sets itself on a journey to emulate its Asian counterpart by increasing the number of EVs on its roads.

Leading rating agency ICRA in a recent report said that electric two and three-wheelers volume is expected to account for 8-10% and 30% of new vehicle sales in the country, by 2025.

According to the report, globally, EVs accounted for over 4% of new car sales in 2020 and they may account for 5% in 2021. Analysts point out that in India car sales and truck sales will continue to remain low but sales figures will be encouraging for two-wheelers and e-rickshaws.

This is so as e-scooters and e-rickshaws have lesser reliance on commercial charging infrastructure as compared to cars and trucks that have a larger span of commuters. Scooters and rickshaws can also adopt battery swapping to dispel charging-related concerns in commercial applications.

Operating cost metrics will favour electric two-wheelers and three-wheelers for commercial operations. Electric three-wheeler in its lifetime will be more economical when compared to a CNG auto.

The Indian market for two-wheeler and three-wheeler is very large and the EV industry can capitalize on this vast segment to become a global leader in manufacturing. However, India is unlikely to make rapid sales in the e-car segment in the short to medium term.

“As such the transition to EVs in India is likely to be gradual and take many more years unlike other geographical regions in Asia, Europe and America,” an expert in the field who didn’t want to be named said.

“The central and state governments have been proactive with their policy measures to augment India’s electric vehicle segment,” he added.

However, affordability and range anxiety could be two of the bottlenecks for customers in passenger cars and trucks. Penetration would continue to remain low over the medium term unless these challenges are appropriately addressed.

Experts feel that this could be managed by strengthening the local supplier ecosystem and substantial reduction of imports. Electric bikes, rickshaws and smaller commercial vehicles have been able to achieve the total cost of operations parity with conventional vehicles with subsidy support and lower operating cost, and are the early adopters of EVs.

India needs to begin large-scale local manufacturing of batteries and critical components. The government needs to work closely with the electric vehicle industry to develop a charging infrastructure for vehicles to recharge batteries seamlessly. This would pave way for the increased acceptability of EVs in the country, something that will be in sync with the government’s vision of Atmanirbhar Bharat.

So far, the policy has played an important role in advancing electric mobility in the country. Policies such as the National Electric Mobility Mission Plan (NEMMP) and Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME I and II) have ignited the spark for interest in EV in India.

India has set a target of installing 450 gigawatts of renewable energy capacity by 2030. The country is also taking active steps to set up e-waste recycling standards which will encourage the usage of recycled materials and help create a vibrant local battery supply chain.

Recently the government had invited proposals for the deployment of EV charging infrastructure on highways and expressways, encouraging stakeholders with incentives. Business think tanks are in negotiations for availing themselves of additional measures which would make setting up charging infrastructure a lucrative business.

According to market insiders, the switch to e-vehicles will bring forth a plethora of positive outcomes. India can reduce its energy dependencies on other countries which will help save money.

As per Petroleum Planning and Analysis Cell, the country imports more than 80% of its crude oil from the Gulf and other regions. As EVs gain wider acceptance, heavy oil imports will come down drastically and help India attain self-sufficiency.

Indian auto industry would undergo technological shifts resulting in alterations in the business of many industries. EV industry stakeholders now need to focus on setting up an infrastructure with last-mile connectivity and reduce battery prices by 40-50%.

R&D and innovations in leading Indian institutions such as the Indian Space Research Organisation (ISRO), Defence and Research Development Organisation (DRDO), Indian Institute of Technology (IITs), etc., can be game-changers.

After the new scrapping policy coming into force retrofitting the cars into EV ones will be advantageous in such cases as the public will not have to shell their hard-earned money to buy a new car and challenges in disposing of the scrap will also be taken care of.

Moreover, this will help in reducing global warming and raise job opportunities which will bode well for the country’s economy.

As developments such as these happen, EVs will become popular, not alone among bike and rickshaw customers but among car buyers as well, cascading to the country strengthening its position in the global electric vehicle landscape.