Is India underprepared for EVs?

E-vehicles, emission-free vehicles, preservation of fossil fuels, decreasing air pollution, are few most discussed points on the subject. But, very few actually bring in light the industrial challenges that a country may face while setting up the e-mobility ecosystem, especially developing countries. India, on its way to achieving 100 per cent e-mobility by 2030, may face challenges in the installation of the EV infrastructure, manufacturing and disposing of Li-Ion batteries, crowd management at charging stations, etc. The country has yet taken a few baby steps towards the adoption of electric mobility but has a long way to go

Preparedness of Indian cities for EVs in question

Manufacturing and industrial aspects, and installation and management of charging stations are few least discussed subjects of e-mobility and a country like India must focus on them. One of the major concerns is the electric motor and the battery that powers it. The electric motor used in EVs is powered by Li-Ion batteries which are expensive. Also, the raw materials used in the battery are in short supply in India. Cobalt and lithium, the two most essential metals of the Li-Ion battery have its major reserves located in Congo, and Bolivia and Chile respectively. Therefore, if India plans indigenous manufacturing of the batteries it has to be dependent on the aforementioned countries. To add on to the difficulty, many developed countries like China have already bought their share of the reserves.

Although few industrial giants such as Suzuki Motors Corporation has tied up with Toshiba and Denso to set up India first Li-ion battery manufacturing unit at a cost of Rs 1150 crore, Mahindra Electric has also firmed up a plan to get into battery manufacturing for EVs, Reliance group and JSM is no behind. The industrial boost for battery production is probably due to the benefits of Rs 5500 crore that the Prime Minister’s Office (PMO) has earmarked for local manufacturing of the EV battery units. On the contrary, Sohinder Gill, director general, Society of Manufacturers of Electric Vehicles (SMEV) said, “Locally manufactured batteries will be costlier than importing raw materials and assembling the unit.”

Another issue with EVs in India would be the charging time at service or charging stations. The population size in India can give an approximation about the number of vehicles running on the streets, and e-vehicles in the time to come. Presently, the battery in an EV, on an average, has a capacity of 50 kWh which can be charged overnight, but, if it has to be charged at the stations equipped with 50 to 120 kW supply then it will take nearly 20-30 minutes. Currently, at petrol pumps in metro cities, big ques can be seen in morning and evening hours, whereas, at CNG stations ques can be seen in any hour of the day and even at late nights. This raises questions on the crowd management by the authorities when the petrol pumps are easily accessible to all and only takes five minutes, on an average, per vehicle. What about the EV charging stations which are yet to be established and which might take 20-30 minutes per vehicle? It seems to be a bigger challenge to overcome.

For proper functioning of the electric mobility, installation of proper EV infrastructure which includes manufacturing plants, battery disposal or recycle units, fast charging stations, uninterrupted supply of power, and much more is required. EVs in itself are costlier than fossil-fuel-propelled vehicles and the cost of their maintenance added with services puts their affordability in question for a regular Indian buyer. Many car manufacturers such as Hyundai recently launched their EV. But, again the price at which the company launched their car is quite expensive for a regular Indian buyer. As per the National Electric Mobility Mission Plan (NEMMP) 2020, report, the sale of small cars, sub-4m segment, less than 1200 cc accounts for 75 per cent of the total sales. This status of the Indian automotive market is partly due to government policies such as lower excise duty on smaller cars, and also due to the fact that an average Indian buyer is highly value-conscious and is interested in value for money over luxury.                  

Indian EV scenario

Indian metros’ streets can be seen flooded with vehicles, of which 75 per cent are two-wheelers and three-wheelers and cars under Rs 10 lakh bracket accounts for the rest of the vehicles, according to the NEMMP 2020, report. A good enough reason for the car manufacturers in India to invest in small cars for domestic usage. Focusing investments on small e-vehicles can turn out to be beneficial for the Indian market as it will help meet the domestic demand with reduced emissions. On the contrary, car manufacturers in other countries are bringing up the tech in their premium cars.

To encourage faster adoption of the EVs, countries like China, US, and few European countries offer subsidies up to 40 per cent, whereas, the Government of India plans to offer non-financial incentives. The government plans to offer credit points on the basis of carbon emissions per kilometer and on the efficiency of the vehicle. Further, to push the usage of EVs in the country, the Indian government launched Faster Adoption and Manufacturing of (Hybrid) and Electric vehicles (FAME) scheme. Under the scheme, around 10 lakh two-wheelers, 5 lakh three-wheelers, and more than 50 thousand four-wheelers will be benefited.

Nirmala Sitharaman, Union Finance Minister, announced the Union Budget 2019 which had additional income tax exemption of Rs 1.5 lakh for people buying electric cars on loan. This amounts to a total benefit of nearly Rs 2.5 lakh to the taxpayers over the period of purchase.  

Hence, India has taken baby steps towards the establishment of the e-mobility ecosystem in the country. Various programmes and schemes have been launched by the Centre to promote the use of electric vehicles across the country and the efforts can be seen taking shape slowly, as many car manufacturers have started working on the same coming up with new EVs. But, a matter of concern remains factors like – the establishment of appropriate infrastructure, capable enough charging stations, and cost-effective machinery.