From the government’s recent EV policies to market analysts recommending stocks that might benefit from this gradual transition, Electric Vehicles (EVs) have become the new buzzword in India. The question is: will the adoption of EVs in India become a reality in the next decade?
India started the EV push in 2013 under the National Electric Mobility Mission Plan (NEMMP) 2020 and, eight years later, we are at a petty 0.79 per cent penetration rate of EVs. According to a FADA study, out of over 26,500 automobile outlets in India, barely 500 sell electric vehicles.
The government launched FAME India in 2015 to promote eco-friendly vehicles. In its second phase, FAME 2, the government is supporting electrification of public and shared transportation through subsidised electric vehicles, including buses, passenger cars and two-wheelers. The Department of Heavy Industries (DHI) has also announced various incentives for EV adoption.
The pain points
But the problems of lack of charging infrastructure persist. Another issues is is the lack of diversity in EV models and production constraints due to the battery pack being imported.
There is no better way to meet EV objectives than by improving infrastructure, keeping consumer costs down, and taking advantage of the thousands of existing dealerships.
If we want to sell electric vehicles in double-digit percentages, the answer lies in the battery pack. The battery pack of electric vehicles, usually Lithium-Ion batteries, accounts for about half the cost of the vehicle and is currently fully imported.
India differs from other developed markets as consumers here want comfort, safety and technology, in a cost-effective manner.
At the current prices, the average battery cost for a typical electric vehicle works out to about ₹5 lakh for a Passenger Vehicle. The inflexion point for mass EV adoption will be when the effective cost of an electric vehicle matches the cost of an Internal Combustion Engine (ICE) vehicle in India.
While most expensive passenger electric vehicles can travel 250-400 km or more before needing a charge, consumers wanting mainstream models remain anxious about whether their EV will run out of charge in the middle of their commute.
Also, though charging stations are the backbone of EV infrastructure but we do not have a sufficient number of them. Municipalities and companies should support EV charging as this will help building owners attract tenants, retailers attract shoppers and the hospitality industry attract travellers.
Parking is a huge issue in metros like Delhi and Mumbai. So how would setting up charging stations work in residences?
Most consumers use the EV as their secondary vehicle, but there are only a handful of people who can afford two cars when in India.
The EV is far cheaper to maintain than an ICE vehicle. For one, it runs on an electric motor, not a complex engine. Hence, it is 30 per cent cheaper to service and maintain. Electric cars also need fewer fluids — only coolant to regulate the battery temperature. Like with all cars, an EV’s brake disks and pads will require maintenance.
However, the tyres of EVs can wear out faster than ICE vehicles due to the high torque generated upon pressing the pedal.
Regular check-ups of electrical systems including the battery, electrical motor and minor electronic systems are necessary. Companies are also providing battery warranties of three to eight years to boost confidence. Also, EVs will cost less than ₹2/km, whereas ICE vehicles do not cost less than ₹6-8/km. With the correct investment in charging infrastructure, increasing the range of available options and reducing the cost of battery packs, India can surely attain this goal by 2030.
The writer is President, Federation of Automobile Dealers Association