‘Good start with EVs, but many more miles to go’
Industry watchers flag government support as critical need
“Congratulations @TataMotors ! A terrific price. Delighted the revolution in the EV (electric vehicle) market has begun. With more players, the market will expand.” That was a tweet by industrialist Anand Mahindra on the Tatas landing the government order for supply of 10,000 electric vehicles against international competition.
Indeed, it is a small step in a long journey towards making India an abode for green vehicles. Wishes notwithstanding, the path is strewn with thorns. Clearing the road ahead is easier said than done. “We see major government support, investment and intervention as necessary to push electrification. Policy frameworks, battery capacity and charging infrastructure are crucial for EV adoption,’’ said a report by Goldman Sachs Global Investment Research.
Impact on oil demand
India’s transition to EVs could have far-reaching implications for the global oil economy. “India, the world’s third-largest consumer and fastest-growing major market, could see a cut of 8%-20% of current annual oil demand,” the report said. Affordability challenge could be addressed with an India-specific EV, it felt.
The government has set an ambitious EV sales ratio target of 40% in 2032 with almost 100% in commercial applications (compares with China’s EV target of 20% by 2025). “We believe this target will be difficult to achieve; our base case (moderate adoption) forecasts an EV sales ratio of 13% for cars in 2032, 25% for 2-wheelers and 55% for buses,” the report said. “If the government is able to learn from the examples of other countries and use incentives (EV purchase subsidies, support for charging station installation, etc.) and prohibitions (deadlines for phasing out conventional internal combustion engines (ICE sales, etc.) effectively, it may be possible to achieve a rapid EV uptake scenario (hyper adoption) with 40% electrification for cars, 55% for 2-wheelers and 75% for buses,” the report said.
“From building a policy framework to drive EV adoption (including standards and regulations around interfaces such as specifications for charging points) to kick-starting the EV ecosystem by investing in infrastructure and public transportation, the move toward electric mobility in India requires everything to be done,” the report said.
‘Late mover’ advantage
Nevertheless, according to Goldman Sachs, the late mover advantage may help India in its endeavour. “This should enable it to benefit from lessons learnt in other countries,” it added.
According to Ashok Jhunjhunwala, Principal Advisor, Ministry of Power & New and Renewable Energy, Government of India, the key challenge for development of electric vehicles would yet be the issue of subsidy. “The world over, electric vehicles are made possible with 30-40% federal/state subsidy. India cannot afford such a subsidy.” According to him, India should look at an alternative route for development of electric vehicles. “The focus has to be on increasing the efficiency of the vehicles by using better quality motors and tyres, better aerodynamics and reducing the weight,” he said at a recent meeting in Chennai.
A report by Feedback Business Consulting Services said, “the future of Indian mobility towards EV is an ideal one and care should be taken to take the Indian auto industry to the next level.” There was an urgent need for a strong policy framework to promote Indian manufacturing and support from the Government to nudge Indian stakeholders move towards EV gradually, it said. “There is an urgent need also to help Indian auto ancillaries move towards making EV components in India. A series of support initiatives are also required to develop products, testing infrastructure and also to reskill the workforce in this area,” it said.
The fact of the matter, however, is that green has become a hot subject of debate and ‘EV’ has become the new buzz word — a fancy one, at that, in the world of Indian automobiles.
Source: thehindu
