The Future Is Electric
Business Today|June 27, 2021
The pandemic has not impacted the electric vehicle story adversely. In fact, it may have accelerated the shift
Sumant Banerji

The pandemic may have come as a rude shock for doubting Thomases who believed that the future of mobility is something else. While sale of conventional passenger vehicles and two-wheelers in the country declined over 9 per cent and 13 per cent, respectively, in fy21, electric two and four-wheelers bucked the trend and posted impressive growth.

Sales of electric two-wheelers surged over 64 per cent, while four-wheelers grew over 68 per cent. Yes, this is on a small base, but encouraging. In a year where nearly two months were lost due to lockdown, it is the clearest indication yet that after sputtering for years, the electric mobility story is on track towards an inflection point when it will become mainstream.

$206 BILLION

The market opportunity for EVs in India by FY2030. Cumulative sales may top 100 million by then

“Covid did us a favour as sustainability and people’s preference for greener vehicles increased, as did the slant towards private mobility. We believe the industry is just getting started and there are exciting times ahead of us,” says Nagesh Basavanahalli, Group CEO and Managing Director, Greaves Cotton, which acquired an electric two-wheeler company Ampere Vehicles in 2018. “We are beginning to see traction. We surpassed the full-year performance of FY2020 in just nine months of FY2021 despite Covid.”

India is moving ahead towards making electric vehicles. In due course, we will be the number one EV maker in the world. E-mobility will be an important tool to develop pollution-free transport”

Nitin Gadkari, Union Minister for Road Transport, Highways and MSMEs

The strong growth for the segment prompted Nitin Gadkari, the Union Minister of Road Transport and Highways and one of the earliest advocates of electric mobility in the country, to say India would become the global leader in this technology. “India is moving ahead towards making electric vehicles (EVs). In due course, we will be the number one EV maker in the world. All reputed brands are present in India,” Gadkari said while addressing the Amazon Smbhav summit on April 18. “We have the tremendous capability for making green power. Within six months, I am confident we will be in a position to make 100 per cent lithium-ion battery in India. E-mobility will be an important tool to develop pollution-free transport.”

THE EV MATHEMATICS

$180 BILLION

Investment needed in vehicle production and charging infrastructure

158 GIGAWATT HOUR

Annual battery capacity required. $6.1 billion investment needed for 50% localisation

₹18,100 CRORE

Allocation by government under the Production Linked Incentive Scheme for advanced cell chemistry battery storage

$6 BILLION

Investment needed to set up at least 5 million charging stations across the country

One-stop Solution

EVs are touted as a one-stop solution to many problems in India. These include those related to air pollution and steep oil import bill that depletes our foreign exchange reserves. India consumes 29.4 per cent of the world's oil and crude oil accounts for more than a quarter of its imports. It spent over $100 billion on oil imports in FY20. According to a report by Niti Aayog and Rocky Mountain Institute, a reduction of 156 million tonnes of oil equivalent worth ₹3.9 lakh crore is possible by 2030 if EVs account for 40 per cent of two-wheelers, cars and SUVs and 100 per cent commercial vehicles and three-wheelers.

India is also the world's third-largest emitter of carbon dioxide (CO2) at two million kilotons behind the US and China. In the national capital of Delhi, pollution due to particulate matter regularly exceeds the World Health Organization’s limits by a factor of 7-12. More EVs mean less carbon emissions.

“It is a no-brainer that EVs are the future. I think that is well-established now,” says Chetan Maini, Co-Founder and Vice-Chairman, Sun Mobility who built India’s first electric car, Reva, back in the 1990s. At Sun Mobility, Maini is working to establish a network of battery swapping infrastructure across the country. “An EV is even more suitable in high congestion cities and stop-go traffic conditions like we have in India,” he says.

However, any new technology at the start comes at a price. EVs, too, cost more than their petrol and diesel counterparts. But with more EVs being produced, the cost of lithium-ion batteries that account for nearly 50 per cent cost of an EV is falling fast — over the last decade, prices have dipped from $1,000 per MW Hour to just over $150 per MWH. They are tipped to fall below $100 by 2023, making EVs as cheap as internal combustion engine vehicles.

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