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Electric vehicle industry: The ground reality of Indian market

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Tata Nexon EV electric car is seen after its launch in Mumbai on January 28. AFP

Electric vehicle industry: The ground reality of Indian market

Electric vehicles have evolved in the last decade in India. With fast charging technology to better speed offering by electric vehicles, they have certainly brought in a good amount of change in the automotive industry.

The customers are also more receptive towards the concept of electric vehicles that makes the adoption easier in the years to come. Mobility in India will witness a drastic change in the years to come to cater to a large population.

The best option to support such a large population is electric as there is an increased need to shift to a green future and reduce dependence on imported crude oil.

Over the last year amid the pandemic that affected the EV industry too, the automotive industry saw a larger company entering India. Currently, the EV industry is at a very nascent stage. It will not see the magic in developing overnight as there are a lot of key areas that need time to improve.

Such entry is a positive one as the EV industry will receive the right focus it needs and open opportunities for investment, better infrastructure like charging stations, and more awareness of using an EV by itself.

The Indian context

The responsiveness of a country to adopt electric vehicles in their transportation policy purely depends on the stage of their economic development, the endowment of energy resources, their technological capabilities, their response to climate change and some circumstances that have created a way to adopt an EV over ICE vehicles.

They are the presence of sufficient amount of energy resources and availability of highly skilled manpower.

These circumstances made sure that India pursues an EV policy that systematically ensures that the country’s EV programme keeps pace with the scale on a global level since large economies seem to require much more significant steps towards EV adoption. India’s growth prospects create a potential for developing leadership in EV in certain segments.

In that sense, the policy will encourage to choose a path that starts with country-specific characteristics and initiatives for the auto sector, building towards global relevance and applications.

The key objectives of the EV policy should be to reduce primary oil consumption in transportation; facilitate customer adoption of electrical and clean energy vehicles; encourages advancement in technology in India through adoption, adaptation, and research and development; reduce pollution in cities; create a global level manufacturing capacity; and facilitate employment growth.

Policy changes

Keeping in mind the nascent stage of EVs industry in the country, the policymakers need a new approach to the duties while keeping “Make in India” as the primary goal. When the custom duties are in place, they give specific preference to value chains manufactured in India.

Goods contributing to the lowest value-add chain (like finished goods) would have the very best import duty; one contributing higher value-add (like components) would have the lower duty and therefore the one contributing to the highest value-add would have rock bottom or zero duty.

Besides, the country needs to observe new brands along with new approaches and technologies to be able to promote long-term R&D altogether aspects of EV technologies. These approaches hydrogen fuel-cells, new battery management systems, distributed motors, batteries that can withstand high temperatures, motors without permanent magnets, and two-way power transfer between EV chargers and the grid.

Making EVs economically viable

Thus, to conclude, the issue of battery technology and charging to maintain the driving range can be addressed by fast charging or swapping of batteries. This will be achieved by creating the necessary infrastructure for an EV, possibly even every kilometre, in dense areas.

As a result, an important question arises on what strategy can make EVs, especially small vehicles, economically viable. The overall strategy should address two key variables affecting the prices of EVs: battery costs and any fiscal policies that either increase the prices of an ICE vehicle or decrease the prices of an EV.

Broadly speaking, approaches exist to scale back battery costs – reducing the number of batteries that would be needed in an electric vehicle, thus making it cheaper on a per kilowatt-hour basis.

For the primary approach, reducing the batteries needed for a given EV, there are two key pathways – providing charging infrastructure and increasing efficiency of vehicles.

First, the EV adoption can be economically possible only when the charging infrastructure problem is addressed by working on an ecosystem of fast-charging or swapping of batteries, by creating infrastructure, maybe for every kilometre, in densely populated areas.

A smaller battery will lower costs by reducing the entire weight of the vehicle, leading to higher energy-efficiency and improved ability to upgrade because the technology evolves. Charging infrastructure is often planned on a city-by-city basis with select cities and regions leading the transition.

Second, incentivising developments to extend vehicle efficiency, thereby reducing energy consumption, can enable a vehicle to travel the same distance on a smaller battery pack and almost as close as an ICE engine. EVs need to be enhanced by using more efficient electric motors, suspension of the vehicle, the looks of it and the weight that would appeal to any customer to buy it.

Suhas Rajkumar is founder of Simple Energy

The Statesman (India)/Asia News Network

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