Prospects of Electric Vehicles in India

Mains Marks Booster     5th August 2023        
Samadhaan

Introduction

  • EVs are vehicles that run solely on electricity, utilizing electric motors instead of internal combustion engines. India, currently the fifth largest car market in the world, has the potential to become one of the top three in the near future.
  • A transportation revolution is needed in India to achieve Net Zero Emissions by 2070, focusing on walkability, public transportation, railways, roads, and better electric cars.

Global status of EVs production and supply chain


  • China dominates global EV production with a share of approximately 50%.
  • Europe stands at second place with a 25% share.
  • The US plays a relatively smaller role, producing only 10% of EVs and having 7% of battery production capacity.
  • India is not a significant player in the global EV supply chain.


Need for Electric Vehicles

Climate change 

  • The need to reduce the use of fossil fuels and their associated emissions has arisen due to the problem of rapid global temperature increase. 
  • By 2030, India has committed to reducing its GHG emissions intensity by 33% to 35% below 2005 levels.

Clean and Low Carbon Energy 

  • The cost of electricity generation has been reduced through the adoption of better technologies, 
  • The shift towards renewable energy sources has led to cost reduction from better electricity generating technologies.

Energy security 

  • Over 80 percent of India's transport fuel is covered by oil imports. 
  • Electric vehicles (EVs) can decrease reliance on imported crude oil, promoting India's energy security.

 Rapid urbanization 

  • According to a recent study by WHO, 14 out of the world's 20 most polluted cities are located in India. EVs can help address this problem by reducing local concentrations of pollutants in cities.

 Innovation 

  • Adoption, adaptation, and research and development will encourage the implementation of cutting-edge technology in India. 
  • The manufacturing capacity of EVs will promote global scale and competitiveness.

Employment: The promotion of EVs will foster employment growth and create more opportunities in the country.

India's Support to EVs

  • India supports the global EV30@30 campaign, aiming for at least 30% new vehicle sales to be electric by 2030.
  • At the COP26 summit in Glasgow, India advocated for "Panchamrit," including renewable energy fulfilling 50% of India's energy needs, reducing carbon emissions by 1 billion tonnes by 2030, and achieving net-zero emissions by 2070.
  • The Indian government has implemented various measures to develop and promote the EV ecosystem, such as – 
  • Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme 
  • Production-Linked Incentive (PLI) schemes for Advanced Chemistry Cell (ACC) and Auto and Automotive Components

Challenges faced by Electric Vehicles (EVs) in India

  • Lack Battery Manufacturing Capacity: India imported Li-Ion batteries worth US$ 1.2 billion during 2018-22, which is expected to increase by around 50 percent by 2030.
  • Consumer Related Issues: As of January 23, 2023, India had only 5,254 public electric vehicle (EV) charging stations, to cater to a total of 20.65 lakh EVs.
    • Additionally, the cost of purchasing a basic electric car is higher compared to a conventional fuel-powered vehicle.
  • Lack of Technology and Skilled Labor: India lags behind in technological capabilities for the production of essential electronic components for EVs, such as batteries, semiconductors, and controllers.
  • Unavailability of Materials for Domestic Production: Dependence on other countries for importing lithium-ion batteries hinders the goal of becoming self-reliant in the battery manufacturing sector.
  • Lack of Stable EV Production Policy: The lack of a stable policy framework for EV production creates uncertainty for manufacturers, making long-term planning and profitability challenging.
  • High Production Cost: The rapid depreciation of the Indian rupee has led to high production costs due to the increased import costs of inputs.
  • Electric vehicles are costlier than gasoline-powered vehicles within the same range primarily due to the expensive lithium-ion batteries.
    • Additionally, maintenance costs are higher due to the new technology involved and the need for skilled labour.
  • Dependence on China: India heavily relies on China for 90% of electric scooter components. As EV adoption increases, the dependence on imports is projected to rise to 70% or more, increasing the reliance on Chinese imports.

Central Government Initiatives on Electric Vehicles

  • Target for EV Sales 
  • The central government has set a target of 30% of new sales of cars and two-wheelers to be electric vehicles (EVs) by 2030.
  • National Electric Mobility Mission Plan (NEMMP) 
  • The NEMMP was launched in 2013 to promote hybrid and EVs in the country and achieve national fuel security. The goal is to achieve 6-7 million sales of hybrid and EVs year on year from 2020 onwards.
  • Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) 
  • It focuses on four areas: technology development, demand creation, pilot projects, and charging infrastructure.
  • Standards Development 
  • Organizations like the Bureau of Indian Standards (BIS), Department of Heavy Industry, and Automotive Research Association of India are working on designing and manufacturing standards for EVs, Electric Vehicle Supply Equipment (EVSEs), and charging infrastructure. 
  • These standards will facilitate in-house production of EVs.
  • Establishment of Charging Stations 
  • Charging stations are proposed to be set up on major highways, connecting city clusters on both sides of the road, with an interval of about 25 km between each station. 
  • This will ensure convenient access to charging infrastructure for EV owners traveling between cities.

Way Forward 

1. Electric Vehicle as Way Forward: EVs will contribute to improving the overall energy security situation as the country imports over 80% of its overall crude oil requirements, amounting to approximately $100 billion.
  • Opportunities for Battery Manufacturing and Storage: With recent technology disruptions, battery storage has great potential to promote sustainable development in the country, considering government initiatives to promote e-mobility and renewable power (450 GW energy capacity target by 2030).
2. Increasing R&D in EVs: The Indian market needs encouragement for indigenous technologies that are suited for India from both strategic and economic standpoints.

The Ministry of Power has prescribed at least one charging station to be present in a grid of 3 km and at every 25 kms on both sides of the highways.

The Ministry of Housing and Urban Affairs under the Model Building Bye-laws, 2016 (MBBL) has mandated setting aside 20% of the parking space for EV charging facilities in residential and commercial buildings.

Conclusion

With government initiatives and the increase in crude oil prices, the Indian EV industry is gaining momentum as people seek alternative sources to reduce their expenses. However, for a widespread transition from internal combustion engine (ICE) vehicles to EVs, there is a need to expand infrastructure, including charging stations, and improve the range of vehicles. 

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