Abstract:
The global automobile industry is seeing a major shift towards e-mobility over the past decade. There is a rapid increase in concept cars being turned into production cars over the years. Following the suit, India also has big plans for the emerging Electric Vehicles and its technologies in the country. It has announced (and later modified some) ultimatums for the next decade. In this study it is aimed to highlight, counter and suggest some solutions to the challenges that lie ahead.
Introduction:
India aims to move towards complete e-mobility by 2030(1). The reason is not very surprising; the alarming levels of pollution indices which keep on rising and the colossal dollars the country have to pay for annual crude oil imports. In December of 2017, the state capital New Delhi was in a state of red alert and came close to Beijing in terms of pollution toxicity, such are the pollution indices in India. The road to success i.e. going fully electric is not going to be a walk in a park, not without full support from government and auto consortiums. This paper covers the current statistics, chances and problems for the mission and how to overcome them. This study is a SWOT(2) Analysis of India’s potential for the market. There are also suggestive measures for countering the conventional ICE(3) vehicles in a country which ranks 3rd in the list of annual greenhouse gas emissions. The state has 19 cities out of 35 globally most polluted cities in the world and has to afford $100 Billion of crude oil per annum. There are a considerable lot of emissions which 230 Million vehicles on road produce today which may hit the 350 Million mark by 2030. The AQI(4) is declining, Global warming is real and India still depends largely on oil imports. This study thus aims to highlight possible solutions and opportunities to realize the Mission EV, 2030. This can help to turn the table into the favor of EV market which is not in the very best of conditions right now looking at the CAGR(5). The study covers relevant statistics, figures, projected changes (growth or decline), hurdles and handicaps in achieving the objective. The study has been done via a thorough review of articles, govt reports, and survey papers by consultancies and institutes. The proposed solution is based on the current scenario and is a suggestive measure to battle the sluggish voyage towards the EV market and daunting target that needs to be taken down.
Body:
The automobile industry is nearing its inflection point. All thanks to the Entrepreneur Engineer Celebrity Revolutionist, Elon Musk, and his Tesla Motors. The idea of eliminating conventional and inefficient yet popular IC Engines was in the talks and in some cases, works, but no one dared to spur the process as impulsively as Musk. With his Tesla Motors being a rage all over the globe and now after the showcasing of it’s to be a flagship, Tesla Roadster 2, the top Auto Manufacturers have sprung into action. The global auto industry has gained and has a lot to gain from this. This is how EV industry has emerged in the 2010s,
The cost of Li-ion batteries by the inclusion of EVs in the industry has gone down from $1000/KWh in 2010 to $275/KWh in 2016 due to the increase in EV trends
The tides of this revolution have reached India. With its NEMMP(6) in action, the Indian government is determined to save about $100 Billion in fuel costs by promising bonus and advantages to the consumers. It is hoped to reduce pollution emissions to 113g/Km by 2022 from 140g/Km which was figured in 2010.
Also, the efficiency of traction motor is about 80 % compared to 25% of the ICE. Add to that the zero emissions and elimination of problems like knocking and ignition lag; EVs are a complete package to vouch for. The only problem currently is the price tag which is primarily due to the high cost of Li-ion batteries. These are though, becoming better with incredible R and D in the domain globally.
Need for EVs:
It is a well-known fact that India ranks 3rd in the global greenhouse emissions after US and China. Hence, the air pollution level in India is also reaching an alarming state. It won’t be long when Indians would fear walking on streets because of smog and the impure air full of NOx and Sulphur. The recent event in New Delhi emphasizes more on this.
Thus it is quite clear that a solution to negate the dangerous AQI needs to be found. If India successfully turns 100% electric by 2030, it could save about 1 Giga Tonne of emissions. Elon Musk’s revolution in the west has motivated and pumped in ideas for the Indian government to tackle the situation by switching to e-mobility.
The second argument is dependent on crude oil. India imports nearly $100 Billion of crude oil yearly. That accounts for about ₹ 700,000 Crores. That gives out an average of $330 Million per day on oil and gas. This costs India a lot and since ICE is not very efficient, a considerable amount of money is wasted due to losses in energy. Comparing this to 80% efficient traction motors looks like a sweet deal. The government is still happy with hybrid motors as it would at least initiate a paradigm shift in the automobile sector which would then be taken over by BEVs(7) in the years to come. The total imports in 2017–2030 would amount to $670 Billion if we still run on ICE till 2030.
EVs are required in the country also because of the fact that India can help transform EV culture in countries like Iran, Afghanistan, Nepal etc, and that means cash flow for India. These states are not as potent as India to work on indigenous EV production, and this can be a plot twist.
Advantages:
In India, where the fuel cost is skyrocketing every year, there is a desperate need for an alternative so that better fuel economy or to be precise, a better cost to driving range alternative is concocted. This is the premise as to why EVs are so significant in the Indian market today. Surely, since the EVs are new to the pool, it is only natural that their cost is higher due to the expensive Li-ion batteries, but the economy which these batteries provide is jaw-dropping and intimidating. Thus, if EVs enter India on a comparable level, then they are going to be massively popular. As they offer a lot better efficiency than ICE, it makes a very strong case for being the people’s choice in the market. This would help save energy wasted generally on thermal losses in the conventional piston-cylinder arrangement. Under the FAME(8) scheme (for four wheelers), it is predicted and targeted that for Mild hybrids, strong hybrids and PHEVs(9) the improvement in fuel efficiency should be about 15, 30 and 50% respectively. As for the BEV, the energy consumption per 100Km should be less than 15KWh for hatchbacks and less than 20KWh for Sedans. Another advantage that EVs can have is being technologically advanced with so many riding modes, rider assist, and safety features etc., thanks to Machine Learning and Infotainment systems and also autonomous driving. This thus makes EVs a better option over conventional cars. In the global current market, about 7% of the global cars in the world are EVs. The worldwide sales for EVs grew by 45% in 2016, states a McKinsey Report.
Challenges:
The challenges to EV market in India are many. The first challenge is the cost. The cost of EVs in India bumps up primarily due to Li-ion batteries. The batteries make up to about 70% of the cost of the vehicle. Thus, battery packs which are imported cost a lot, about $275/KWh in India. The GST slab of 28% makes the case even worse. Surely, the price has gone down in the past 5 years, but still, it hasn’t reached a value where it would be capable for the general public to opt for EV. India is short of Lithium unlike China thus making the case even worse. Not to mention that batteries are to be replaced after 5 years. Thus the total cost of ownership comes out to be a lot more. Currently, annual electric vehicle sales amount to 0.1% of 3 Million cars per annum. It is predicted that the inflection point for these batteries is about $100–150/KWh which is predicted to be achieved by 2025 when the batteries reach this mark then there would be a major upscale in the EV market due to cost cut and EV boom would occur in India.
The charging time required is about 6 to 8 hours when normal charging is considered, which imposes another challenge of time management. While talking about fast charging this can go well under 90 minutes or less, but this depends on the availability of charging stations. DC charging points need charging infrastructure, which is yet another difficult obstacle to overcome. Normally, a visit to petrol station can add about 500 Km of range and it hardly takes 10 minutes for that to achieve. The EVs however, need to be charged for longer periods even if you are lucky to find a fast charging station, and more so they offer a range of about 150–200Km which is quite low. A McKinsey report based on surveying 10 EVs gives the following results,
Add to that the shortage of charging stations and it becomes a strong argument against EVs. The waiting time thus puts consumers off. So, the most important thing to do is setting up charging infrastructure for fast charging. In India there are about 222 charging stations with 353 charging points for about 187,802 electric vehicles. There are about 56,000 petrol pumps for 222 Million conventional vehicles. Unlike in the developed countries, people don’t have dedicated garages in their homes with proper electrical supply for charging or setting up charging infrastructure. Thus it becomes a difficult case to solve and is one of the biggest hurdles for the implementation of EV scheme
Another thing that needs to be considered is that the energy for powering these traction motors should come or at least have a considerable amount of share of renewable energy, because what’s the point of all this if we are burning fossils to counter burning of fossils. In India majorly electricity is produced by burning coal, which produces even more carbon emissions than gasoline or diesel. Generally, coal produces 0.92Kg of CO2 per KWh and gas, wind energy produces 10 grams of CO2 per KWh and Solar Energy produces 50g of CO2 per KWh.
Thus not only it is necessary to shift towards EV but also simultaneously it is important to have clean sources of energy as well. In fact, the carbon emissions during the manufacturing of EVs (Particularly due to their batteries) are significantly more than the production of conventional vehicles, thus strengthening the argument. However, in a Bloomberg’s report based on China’s energy production methods, it was derived that given some time (about 7 years or so) the total lifecycle emissions of conventional vehicles which continue to run on fuel will have accumulated the figures of emissions more than the EVs which run on coal-powered plants. Add to that the fact that EVs can also run on energy produced by renewable sources which lower the emissions even further. Thus it is still less polluting in the long run to choose EV over ICE.
A Rocky mountain report states that India’s requirement for EV battery would be about 120GWh for 2017–2020, and the current clean energy production is about 50GW capacity. Thus it is not impossible to transit clean energy to EV.
The government is working in this direction enthusiastically. In 2015, the government set an ultimatum of producing 175GW of electricity annually by 2022 by clean sources, amongst which about 100GW has to come from solar. By the national statistics, about 50GW capacity of solar power has already been achieved. Thus these two things need to run parallel to each other, only then can the true potential of switching to EVs be explored. A quick study reveals the growth of renewable energy potential,
Employment uncertainty is another debatable factor. Currently, there are about 2000 parts of an automobile that needs to be manufactured and assembled. This requires skill force as India is not very automation and robotics oriented. When EVs will come into play, which has about 20 parts, then there will be massive job cuts and the already declining employment rate will move further down. Quite a many layoffs would take place and it definitely won’t be good for India’s all around development. Also, there are mechanics who make their living by repairing engines, they have all the intellect necessary and can go to any means to start a seized engine, as they have learnt that from experience, but once traction motors kick in, their shops would be the first ones to shut down because they can’t understand the electronics and advanced Mechatronics behind EVs. Hence, their source of income would be sealed away. A possible solution can be training these people how to work on new vehicles under the already existing PMKVY(9) scheme that aims for skill development in unemployed Indian youth. In this way, the number of skilled youth can be increased which is the ulterior motive of PMKVY.
There is another controversy behind all this, this is about EVs being too silent. Since these engines lack that grunting noise, it becomes dangerous for pedestrians and unaware motorists on the road. However, to solve that problem some manufacturers have resorted to providing an extra sound box for artificial engine noise in the vehicle to avoid any dangerous situations like these.
India’s DISCOMS hold debts and are unable to suffice the energy requirement of the whole country adequately. If the much-awaited EV revolution takes place, then the sudden increase in electricity requirement would put extra load on these companies which are already in the weak state. However, a report by McKinsey suggests that even if we achieve 30% EV status in the country by 2030, the energy required would be about 3–4% of the current power generation capacity, which is manageable considering the dollars saved in crude oil can be invested on power plants.
Solutions:
The government support is mandatory if the objective is to be achieved. The support is required both for consumers and manufacturers alike. The manufacturers hold the key to bringing the much-desired change and they can and will only achieve if the government provides them with the necessary incentives. The same goes on for consumers, the government ought to provide some sort of subsidy or relaxation in tax regime or any other kind of incentive to motivate them to opt for EV.
SIAM (Society of Indian Automobile Manufacturers) submitted a white paper to the government asking them to promote EVs by reducing GST to 5% from 12%, waive off road tax and toll charges, provide income tax benefits, free parking and 50% reduction in power tariff for charging these vehicles. It was Norway that followed similar kind of practices to acquire a staggering figure of 32% EV market in 2016. It plans to continue this growth to achieve a target of 50%(recently it was downscaled to about 40%) EV market by 2025. India can take inspiration from the Norway development model. The EV inclusion in the dense ICE market can be initiated by targeting public vehicles like buses, taxis and 3 wheelers. Since most of these are government owned, it becomes easy to promote E-mobility in this segment. China followed the same strategy to boost EV sales in the market and currently China stands at a figure of 2% of 24.7 Million annual electric car sales. One report proposes a 15-year plan by limiting the registration of conventional vehicles through public lotteries and preferable registration for EV, as China did. It can also be proposed that upcoming vehicles above a certain price tag are to have mandatory hybrid technologies installed, like the regenerative braking and an assisting traction motor for extra power and mileage. This would push the price a little, but since it would be applicable only to vehicles costing luxuriously, it wouldn’t be a bother for the luxury car consumers to spend some extra money
The government could also provide incentives to people willing to allow for setting up of charging stations inside their garages publicly, somewhat like Public Call Office. Working along the Norway model of achieving 50% electrification by 2025, incentives like workplace charging, low tax, free parking, discounted road tolls, special transport lanes, free battery charging points can also be offered. Just like Denmark, India could also start attaching a premium on polluting vehicles and incentives on clean energy vehicles. A 2016 survey in China boasts that BEV and PHEV sales tripled in five years due to improvement in charging infrastructure. Petrol pumps, shopping malls, metro stations can be allotted and reworked to make space for charging infrastructure. This would help reduce extra land allocation, revenue and ease off the strenuous task of getting clearances. Also, special driving lanes, reduced toll taxes, free parking; early vehicle clearances are some of the benefits which can be offered to the consumers. If the deal is not favoring, then people would be skeptical about buying the vehicles.
Another Rocky Mountain Report states that the battery costs about 70% of the cost of the EV and India imports fully manufactured battery packs from other nations. If India starts assembling battery packs in the state itself, then about 25–40% of the cost advantage is covered, and with time this could reach about 80% if India starts manufacturing cells and imports only the cathode. It is estimated that a total of 120GWh of energy demand during 2017–2020 for EVs if accomplished by imported battery packs, would cost $24 Billion and about $18 Billion if battery cells are assembled in India.
Focused research on the battery sub-components could help find alternatives and/or lower the costs of Li-ion batteries, by producing batteries with different and cheaper alloys and elements to reduce the cost. Also, it would be beneficial to promote the manufacture of batteries’ components within the country itself. It is estimated that if this is achieved, then the cost of battery would reduce to $73/KWh (India’s energy storage mission). This can boost the EV profit which increases the market thereafter.
Oil import demand for India over the period 2017–2030 would amount to $670 billion (assuming there is no EV intervention). On the contrary, if we go 100% EV, then battery imports would cost about $300 Billion. On the bonus, if we achieve domestic assembly of battery packs then this figure would fall to $225 Billion. This saves the government a lot of money and can be further used in other fields like Lithium mining and clean energy generation.
Currently, under the FAME scheme which is now rescheduled to be implemented till 2022, there are a number of incentives which are to be provided to consumers of EVs.
First of all, the scheme considers Mild Hybrids**, Strong Hybrids, Plug-in Hybrids, and xEV or BEVs as Electric Vehicles.
A car has to fulfill the following requirements to be under the radar:
Mild HEV: These are Hybrid Electric Vehicles which have a start-stop arrangement, Electric Regenerative Braking System, and a Motor Assist technology embedded inside.
Strong HEV: It’s an HEV with a stop-start arrangement, Electric Regenerative Braking System and Motor Drive technology.
Plug in HEV: If an HEV has a provision for off-vehicle charging.
xEV or BEV(Battery Electric Vehicle) : These vehicles run purely on electric motors and are powered by a traction battery along with having a regenerative braking system.
The government targets that there should be an increment in fuel efficiency of 15,30 and 50% in case of Mild Hybrids, Strong Hybrids, and PHEVs respectively according to FAME scheme. As for BEV, the energy consumption should be less than 15KWh per 100Km for hatchbacks and 20KWh per 100Km for sedans. The govt incentives for the consumers on EVs vary depending upon the EV purchased and the power output as well. In brief, the value of incentives varies from ₹13,000 to ₹1,24,000 depending upon the class of vehicle. The government has also offered incentives for aftermarket retrofit electric kits as well, and range about ₹30,000–40,000.
Conclusion:
As quite ostensible from the mentioned facts and figures, it is clear that E-mobility is a distant dream for the Indian government. It is very tough but not impossible to realize the ultimatum which has been set. If India really wants the mission to be accomplished, it’s going to be a collective effort of every individual/ organization significant to the country. That includes the government, of course, the automotive consortiums/industries associated and the people. The government can offer solutions and incentivize the taxes, but it is useless if the consumer is not willing to move out of the comfort zone and grab it. The auto giants also have to take a step forward and take risks for the change to happen.
In the near future, e-mobility would not be something of luxury but it would be something necessary for the survival because the pollution level is alarming and the only solution is the green sources and transmission of energy. Hence, EVs are inevitable when it comes down to it, so it is better to plan and organize about how the developments are going to occur rather than dodging the change. The earlier this realization occurs, the better. It is required to lay strict guidelines and a time managed framework as to how changes are going to occur and how to make the most of it. There are strengths and weaknesses in every domain which need to be pondered upon and eradicated respectively.
The most important conclusions that can be drawn are,
1. The task is impossible without government intervention and help.
2. The automotive sector has to sacrifice some profit for the future gain at the start.
3. The people need to be made aware about the benefits of the EVs and the dangers of pollution caused by ICE.
4. A considerable amount of R and D is of utmost importance so that the cost can be brought down as much as possible.
5. ‘Make in India’ objective should be present at all time during decision making.
6. Development of Renewable Energy sources should be run parallel to the EVs.
Legends:
(** — The government revised its scheme to remove Mild vehicles from the list of incentive recipients.
1 — The government in March of 2018 down scaled the target to 30%.
2 — SWOT is a common acronym used in institutions which means Strengths Weaknesses Opportunities and Threats.
3 — Internal Combustion Engines, the conventional piston cylinder arrangement for obtaining rotary motion.
4 — Air quality Index.
5 — Compound Annual Growth Rate is a prediction looking at the statistics which gives a rough idea of how the trend is going to go.
6 — National Electric Mobility Mission Plan
7 — Battery Electric Vehicles
8 — Faster Adoption and Manufacturing of Hybrid and Electric Vehicles
9 — Pradhan Mantri Kaushal Vikas Yojna is a government scheme that aims skill development for the people.)
References:
http://niti.gov.in/writereaddata/files/document_publication/RMI_India_Report_web.pdf
http://niti.gov.in/writereaddata/files/document_publication/India-Energy-Storage-Mission.pdf
https://electrek.co/2017/01/30/electric-vehicle-battery-cost-dropped-80-6-years-227kwh-tesla-190kwh/
http://energyfuse.org/indias-oil-demand-main-engine-global-growth/
https://www.iea.org/publications/freepublications/publication/GlobalEVOutlook2017.pdf
http://www.fame-india.gov.in/ViewNotificationDetails.aspx?RowId=5
https://tradingeconomics.com/india/imports-of-crude-oil
http://dhi.nic.in/writereaddata/Content/NEMMP2020.pdf
http://energyfuse.org/indias-oil-demand-main-engine-global-growth/
