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Union Minister of Road Transport & Highways, Nitin Gadkari, put the automotive industry on notice through some tough talk recently about Centre’s target to achieve 100 per cent e-mobility by 2030.
This notion is not new. Nor is the nation alone amongst a growing number of governments announcing steep targets for fully electric vehicles. Most industry observers agree that Gadkari’s words cannot be completely taken literally.
Instead, focus should be given to the intent behind his statements and to this government’s seriousness to promote battery electric vehicles (BEVs) in the long term. BEVs constituted less than 0.1 per cent of all cars in use globally at the end of 2016, according to LMC Automotive’s Global Hybrid & EV Report (H1 2017).
By this measure, expectation hugely outweighs achievement so far. However, there is no denying that this sector continues to receive significant investment globally and looks like becoming the default technology for future zero emissions personal mobility.
Notably, the report suggests: “The route to efficiency targets and eventually to sustainability will involve a broad mix of solutions but there is little doubt that IC (internal combustion) engines will be a core part of the technology for many years.”
Wrong step Discussions about the dawn of the electric car age should bear the above figure in mind, as well as the one billion IC cars in use. Hence, for policymakers in India to completely discount the importance of IC engines, would be a step in the wrong direction.
The dismissal of hybrid vehicles (as is shown by the prohibitive GST tax rate for hybrids) as a logical technology adoption before the leap to BEVs may also prove to be slightly naive. Going full electric for its huge fleet of vehicles in a little over a decade for a country as economically diverse as India would be a gargantuan task, no matter what the Government’s intentions or the industry’s willingness.
We would be sceptical of the Government’s targets and would look to a more realistic progression towards electric vehicles in India. No doubt, the challenges for India to achieve its BEV target have been widely discussed. Even so, it is important to point these out again.
Bigger challenges One of the biggest challenges for electric vehicles – and this becomes a more imperative concern for India – is price. The purchase cost of any BEV will have to be comparable or only slightly higher than an IC powered vehicle for the highly price-conscious Indian buyer.
The battery cost would have to significantly come down over the medium-term, which means it would have to be made locally. In this regard, the recent joint venture between Suzuki Motor Corp, Toshiba Corporation and Denso Corporation to set up a lithium-ion battery unit in India could play a significant role.
On the technology front, the Indian components industry would have to come on board to supply many of the electrical parts for BEVs. We believe this could be an opportunity for the vendor industry to adapt, upgrade and scale up for the electric vehicle future albeit it by investing heavily in their operations.
Moreover, charging stations would be required across the width and breadth of the country to allow for easy adoption of electric vehicles. Agreed, this process has already started with the government inviting bids for 4,000 charging stations in Delhi NCR (National Capital Region).
At the core of it all though would have to be a clear and unwavering road map from the government. The industry would have to make enormous investments to prepare for such a paradigm shift, and it simply would be disastrous if this or any future government were to change direction.
On the whole, a convergence of government policy (and its steadfastness), cost reduction, local technology upgradation and charging infrastructure would be needed for India to achieve a measure of success in the electric vehicle space. To aspire for 100 per cent in this backdrop would be a tall order but getting started is a better option than doing nothing. Perhaps, this is what the Government really wants industry to do.
Ammar Master is LMC Automotive’s Senior Manager and Sawangwong is Senior Analyst, Asia Powertrain Forecast
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