Will India ‘EV’olve?
Do Electric Vehicles have a future in India?
2020 introduced us to the “New Normal” way of life. Although Indians have heard that the future of the automobile is electric for quite a while now, in reality, this sector is still a Work In Progress. Leading EV manufacturing company Tesla’s CEO Elon Musk’s tweet in 2020 regarding the launch of Tesla EVs in India created a noticeable buzz. Prime Minister Narendra Modi’s declaration of raising the Renewable Energy target to 450 GW by 2030 at the UN Climate Summit adds another major thrust to India’s EV initiatives. The country’s climatic situation is not the most inspiring either, lead by the capital city, New Delhi, where the air is becoming unbreathable each passing year. Will all these triggers transform the average Indian consumer mindset toward adopting the EV option in the years to come?
As per the study conducted by Automobile lubricant major Castrol, EVs’ large scale adoption will not unfold until 2025. The study identified the acceptable price point for India to be 31,000 USD in comparison to the global average of 36,000 USD. A “Wait and See” approach is currently followed by both the consumer and manufacturers across the country. Apart from the price sensitivity, the Battery charging time was found to be another pivotal factor in making the purchase decision. About 70% of consumers still believe that EVs can dominate Indian roads only when charging can come somewhere close to the existing petroleum-based combustion engines. In contrast, the drivers who took part in the study pointed out that the Range per charge (in Kilometers) was the concern. The apprehensions of the Indian consumer vastly outweigh the benefits at this time frame.
Despite these uncertainties, in which areas do EVs tick the boxes?
a) The electricity costs are on average one-third of petroleum costs per kilometer in Developing Countries.
b) Reduction in Carbon Footprints. Studies show that Petroleum-based vehicles contribute to almost 60% of Atmospheric Pollution. Being smoke-free, EVs eliminate this risk practically altogether.
c) Minimize Noise Pollution levels in general associated with Internal Combustion Engine (ICE) vehicles.
d) Energy Efficiency. Rechargeable batteries hardly cause energy wastage and avoid particulate matter generation related to environmental degradation.
Still, why does the EV market keep struggling in India?
- The initial investment is still very much above the average Indian budget. Battery manufacturing facilities are not cheap as well. The financial savings in in long term is blinded by the upfront cost.
- Lack of abundant Charging Stations — Infrastructure issues. This is another area where Petroleum vehicles dominate.
- The Range per Full charge and Charging Times — Performance metrics still bug the consumer.
- Support and Service stations are far more prevalent for the PVs in comparison to EVs. This should change soon if we expect to live the EV revolution.
- Undue pressure on Electricity generation can force the government to leverage fossil fuel usage in Electric plants. This can negate the benefits marketed by the EV product line. Other forms of Renewable energy needs to be coupled with Electricity generation for efficient production.
- Elevated demand for Real Estate to set up Manufacturing and Charging Stations.
These factors barely touch the tip of the iceberg when it comes to EVs’ role in the Indian automobile market. The Indian middle class is far from convinced when it comes to making the decision of EVolution. To help facilitate this, the central government has a critical role to play by provisioning Tax Incentives and Subsidies to EV owners and suppliers. Even global renewable energy promoting enterprises like Tesla would need to meticulously and relentlessly do their homework to tap an extremely price-sensitive and trend-sensitive economy such as India. In the interest of Nature and Sustainability, let’s hope for a “Renewable” dominated future in the decade that unfolds from now!
