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The Indian EV Bottleneck

July, 2020

With 55% of India’s crude oil consumption owing to the automobile sector and India being the third largest greenhouse gas emitter in 2019 having 22 out of 30 of the World’s most polluted cities and a large part of its population breathing air 10 times more polluted than the levels prescribed by WHO, the need to sustainably grow the mobility ecosystem, both from an economic and environmental perspective has been necessitated.

So, while we all do recognise that electrification is the need of the hour, it is evident that this highly depends on innovation, R&D and Government incentives. Adoption of EVs has the potential to disrupt the automotive market and there is no dearth of Government incentives either. However, lack of adequate infrastructure and the unaffordable price seem to be the two main roadblocks.

Studies have pointed out that India has only about 650 charging stations and this number goes in lakhs in countries such as China and this is mainly due to the lack of private parking spaces in India. According to Maruti Suzuki, around 60% of the population doesn’t own or have access to private parking spaces and this points to a major problem when it comes to charging EVs leading to a low inclination towards their purchase.

There are a number of other reasons that the EV revolution has been slow to take off in India. To begin with, the average cost of an EV in India happens to be about two to three times higher than that of a vehicle run on traditional fuel. Then comes the scarier bit- ‘range anxiety’- the fear we have of the battery running out of power while leaving us stranded in the middle of nowhere. Reliance on battery imports and other parts, inadequate and unreliable electricity supply in many parts of India, limited selection of vehicles on offer and the lack of provisions for maintenance and repair of EVs are other factors holding this segment back.

In contrast, there are several countries in Europe who are working at overcoming these challenges. In fact, in Norway, electric car sales exceeded internal combustion engine car sales for the first time in 2017 as a network of rapid chargers is being installed across Norway, Denmark, Sweden and Germany. Several breakthroughs have been made as this complex project spans countries, targeting the key road networks while keeping in mind the typical battery range and driver behavior to ensure charging points are installed in the right place to guarantee complete coverage.

Several other countries have also adopted impressive practices to make the EV segment viable. London has exempted electric vehicles from the congestion tax as well as the road toll. UAE in the recent years has focussed on greater incentives and better federal level integration to trigger a shift towards green mobility. It also focuses on getting residents used to the facilities apart from simply having the infrastructure in place. The fast urbanizing Sub-Saharan African region also urgently needs a transport alternative to stave off the growing burden of fuel dependency and subsidies, as well as an electricity storage solution to leverage their abundant renewable energy sources and this is where EVs powered by electricity and running on battery solutions offer the ideal solution and a positive landscape for the development of the segment.

I feel that the recent indications of continuing shift from direct subsidies to policy approaches that rely more on regulatory measures including zero-emission vehicles, mandates and fuel economy standards have set clear long term signals to the auto industry and consumers that support the transition in an economically sustainable manner for Governments.

Pursuant to the ongoing pandemic and the stringent nationwide lockdown, skies in the national capital turned an azure blue and allowed residents to breathe normal air after like an eternity. Air pollution dipped by 79% during the lockdown and India’s CO2 emissions fell for the first time in what? 40 years…due to the reduced emissions from transportation (road and aviation) and industries. In fact researchers stated that if these low levels of pollution from the lockdown period are maintained, India’s annual death toll could reduce by 6.5 lakhs. Here comes the need for a rapid adoption of EVs to maintain a new normal and we all do realise it at the end of the day. But this is easier said than done.

Moreover, there are several other concerns as well which I feel need to be addressed before the shift to EVs accelerates. Primarily, most of the ancillary industries that have developed over the years to supply parts for the IC engines would be overthrown rendering a considerable part of the population jobless. Further, an efficient way to discard the lithium-ion batteries needs to be worked out to prevent lethal consequences. And last but perhaps the most relevant- unless the method and source of manufacturing electricity changes from thermal to other renewable and non-polluting sources (such as wind, nuclear or hydroelectric), there is no change we will be making in the levels of pollution as a whole. Only the location where the pollution is emitted would be changing from cities to the outskirts near the power grid stations.

The government’s vision of an electrified future of mobility requires itself to be the largest and most important contributor to its targets, as it seeks to achieve its key aim of driving a new age of sustainable growth while preserving the Indian ecosystem’s legacy and relevance. Global precedents show that charging infrastructure drives EV adoption, instead of playing a demand-based catch-up. While India is on its way towards building the charging infrastructure and addressing the other major challenges that lie ahead of the EV segment, the market for hybrid vehicles is immense and should be seized to build consumer confidence and trust in the transition period.

  • Written By Radhika Mathur

Radhika joined as an intern at TSB in 2020. With a smile on her face and a spring in her step, her effervescent nature is infectious. A sincere and keen learner, she's currently mastering the art of waking up before 9 am.