World EV Day 2020: What India's Electric Mobility Future Looks Like
- The electric vehicle segment growth will be led by two-wheelers in India
- The next 5 years will see more adoption as the cost of ownership sets in
- Charging infrastructure will play a crucial role in popularising EVs
The electric vehicle segment is here and thriving, and the paradigm shift has seen auto and component makers work in overdrive to make the technologies ready for the realities of today. This means that even as the world is adopting electric mobility, a lot needs to be done to support the cause. This World EV Day, carandbike spoke to the electric mobility sector's key players to understand where the Indian market is headed with electric vehicles and what more needs to be done for a promising future.
The Current Scenario
The electric vehicle segment is at a nascent stage in the Indian automobile market. The auto sector sold about 21.54 million vehicles in the 2019-20 financial year, which included 1.56 lakh electric vehicles. While that number is minuscule compared to ICE vehicles, auto sales were down by 18 per cent last fiscal. During the same period, EV sales grew by 20 per cent. According to the data shared by the Society of Electric Society of Manufacturers of Electric Vehicles (SMEV), electric two-wheelers led the charge with 1.52 lakh units sold, followed by 3,400 electric cars and 600 electric buses.
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EV Sales: India vs Global
The sales figures are only expected to grow from hereon as more and more established players find their footing in the electric vehicle segment. Markets like China, Germany, Norway and the US have shown tremendous growth in EV sales, even as volumes have declined for conventional vehicles. At the end of 2019, over 7.2 million electric cars were sold across the world so far, according to the International Energy Agency (IEA). Over 2.1 million electric cars were sold in 2019 alone, registering a 6 per cent year-on-year increase. That's about one per cent of the global car stock produced in 2019 and India contributed just about 5000 units to the overall volumes.
China is the leader in EV sales with a high concentration of electric two-wheelers. The country's total electric two-wheeler production stood at 36 million units as of 2019, while its electric car sales stand at 3.4 million, or 47 per cent of the total electric cars sold globally. Meanwhile, Norway leads the world with the most EVs per capita of any country with a market share of 55.9 per cent at the end of FY'20. Similarly, Germany, Europe's largest auto market, has been aggressive with the adoption of EVs that contributed five per cent to a total of 3.5 million vehicles sold last fiscal.
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India is gaining ground with the sale of electric two-wheelers that have been contributing to the volumes. However, the segment has seen limited growth largely because of the limited resources available. Unlike China, India does not have an expansive homegrown EV manufacturing industry restricting the growth potential.
Energy equipment and solutions provider, Magenta Power's Maxson Lewis, MD, explains, "Batteries constitute close to 50 per cent by value of the EV. Battery manufacturing requires Gigafactory level investments, at least 3 years of gestation and base minerals supply chain securitisation. While other components like motor, motor controllers can easily be manufactured in India, at a sub-component level, having a 100 per cent indigenous build-up is impractical. What is required is a roadmap for this localisation and not ad hoc and aspirational announcements. Else we will end up in the same spot like solar panels where India remains an assembly hub rather than a ground-up manufacturer."
The import cost of the battery and battery cells have been a key reason for the high cost of EVs. The central government's FAME II subsidy has only helped so much to encourage the transition from ICE vehicles. The states need to work more aggressively for electric vehicles to thrive. The recent policies announced by Delhi and Telangana promise the more cohesive environment for EVs to grow not just for the end-customer, but all players in the ecosystem.
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The Charging Infrastructure
In the case of China, it was the subsidies that pushed users towards adopting electric mobility. According to a report by the NITI Aayog, China's EV incentive programme granted roughly Rs. 6.5 lakh per vehicle no matter the type. But even then, there remains the question of the charging infrastructure that remains non-existent so far. While automakers including Ather Energy, Hyundai, Tata Motors and even MG Motor have been working towards setting-up charging stations, the accessibility remains negligible.
As of 2019, there are 598,000 publicly accessible across the globe, according to the IEA. Of which 52 per cent are located in China, 8 per cent in the Netherlands, 5 per cent in France, 4 per cent in Japan and the UK respectively, 3 per cent in Germany, and 1 per cent in Norway. In contrast, there are not more than 1000 charging stations across the country, 300 of which have been set-up by the government-run EESL. The energy service company has commissioned 534 captive chargers (342 AC & 192 DC) across multiple states pan India. It has also signed multiple agreements with various PSUs, government departments, states and taxi aggregators to deploy e-cars.
Swiss giant, ABB has been working on providing solutions for the EV sector. CP Vyas, President – Electrification business, ABB India, states, "Connectivity and accessibility will be of utmost importance. Therefore, regulating the placement of charging infrastructure across major cities will be a priority. This is already in the works with the government planning charging stations across major highways as well as considering mandatory charging stations across all petrol pumps in the country."
The Way Forward
According to Lewis, "By 2030, at least 50 per cent of all the vehicles sold in India will be electric. In fact, the rapid transition to electric will start by 2025 when the total cost of ownership sets in positively even for individual users. 50 per cent of the non-EVs will be using cases where battery technology has not been able to catch up."
That does sound promising as more and more automakers aim to find the footing in the nascent segment. Two-wheelers will be the major driving force for EV adoption. As Jeetender Sharma, co-founder and MD, Okinawa, explains, "The idea of e-mobility has been warmly accepted in Tier 2 and Tier 3 regions. In fact, we receive more demand from Tier 2 and tier 3when compared with Tier 1."
For a premium player like Ather Energy, the brand has gone on to become a benchmark in electric two-wheelers made in India. The scooters loaded with performance and tech have been shining examples of what India is capable of achieving on its own. Following suit, companies like Ultraviolette Automotive and even Revolt Motors are working on offerings developed for domestic needs. It is interesting to note that Ather and Ultraviolette are backed by two-wheeler giants Hero MotoCorp and TVS Motor Company respectively.
New Products, New Technologies
The car industry isn't too far behind either. India's largest UV makers - Tata Motors and Mahindra have been at the forefront of the EV technology. Mahindra has been a pioneer in the Indian electric mobility space and has been constantly evolving with its offerings. The company also chose to announce its MESMA 48 EV platform for global application this World EV Day. With over 11,000 cars built on the platform till date, the automaker will scale the platform to develop more products across a variety of segments.
Tata Motors has been leveraging its strongholds within the Tata Group to synergise its work on electric vehicle development. The company has been working proactively with the rollout of the Tigor and Nexon EV, while all new cars from the company will get an electric alternative in the new future.
Anand Bhade, President - Asia Pacific Sales, Tata Technologies, "To achieve better manufacturing efficiencies and fast track the EV adoption process, both government and auto players need to collaborate to scale up the EV economics. We have been propagating the use and reuse of a single body architecture concept as a platform for OEMs to achieve their EV dreams by accelerating product development cycle through synchronised engineering."
Mass Adoption In The Commercial Space
There also needs to be a focus on commercial vehicles transitioning from ICE to electric vehicles. Not just through PSUs but EVs will see faster adoption from fleet operators as the concerns around the total cost of ownership and range are addressed. Under its Mission Electric initiative, Indian ride-hailing platform Ola Cabs had announced in 2018 to bring one million electric vehicles on the road by 2021. This includes e-rickshaws and electric auto-rickshaws along with electric cars. At present, the Delhi-based BluSmart is the only all-electric ride-hailing service present in the country. Globally, Uber announced its commitment to switch to electric by 2040. Start-ups like Euler Motors from Delhi have been working on bringing three- and four-wheelers eLCVs for last-mile delivery.
Collaboration Is The Key
"Collaboration among key stakeholders will help enable the EV transition," says ABB's CP Vyas. Toyota and Suzuki have partnered to develop electric vehicles for the future, while EV development is part of the strategic alliance between Mahindra and Ford. Globally, BMW and Jaguar Land Rover have tied up for partnered for EVs that will save costs through shared research, shared production planning, and by jointly buying electric car components. Earlier this week, German auto components giant Bosch picked up a 26 per cent stake in Bengaluru-based Sun Mobility, in order to tap new opportunities in the energy domain.
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The newfound push for electric vehicles has been the increase in demand for personal mobility in the post-COVID era. The need for social distancing has fuelled the increase in interest for electric two-wheelers, says Jeetender Sharma. With EVs promising lower operational costs, especially for short-distance commutes, India is likely to move the China way towards the adoption of electric mobility.