It was in April this year when the then power minister, while addressing a CII session, revealed what would turn out to be one of the most ambitious leaps in recent history -- ‘an all-electric car fleet by 2030’. To quote Mr Piyush Goyal, “We are going to introduce electric vehicles in a very big way”. It was quite a revelation from the power minister, given that the auto industry contributed an astounding 7.1% to the nations GDP last year.
The nation is at a rather transformative junction in its development in the fields of infrastructure, mobility and energy development. While countries in the west have adopted a rather private vehicle ownership process, the transportation infrastructure presents with itself a unique opportunity of progress. With the onus of being the second-largest populated country in the world, India has a lot of reasons to rejoice over the bright outlook of the adoption of electric vehicles in India. NIT Aayog said in a recent report that can cut its energy demand by 64% and carbon emissions by 37% by making its passenger mobility shared, electric, and connected. The concept not only helps India to fulfil its renewable energy goals but also assists it in other facets like the ‘Make in India’ vision. The Indian automobile industry is the sixth-largest in the world and accounts for a whopping 22% of the country’s total manufacturing output. The large-scale adoption of electric vehicles can play an important role in increasing the share of manufacturing in India’s GDP from the current 15% to 25% by 2022.
The idea behind elctrification of motor vehicles in India is to bring a cost-effective clean transportation medium. A large part of India is still widely dependent on public transportation to meet its travelling needs. With over two-thirds of transportation taking place without actually owning a personalized vehicle, it signifies the importance of public transit and the impact buses will have towards the government’s 2030 e-mobility vision. The global electric bus market is set to witness an impressive 33.5% CAGR growth by 2025. This gives us an interesting outlook over the global impact the segment will have towards a holistic electric vehicle adoption, critically for India. Preserving and further augmenting this mode through radical e-mobility urban designs will help advance the last mile connectivity and bring in desirable public transportation to both rural and urban areas.
However, challenges remain on this front that need to be resolved via policy framework in order to create a bright EV ecosystem. The country is widely acknowledged for its famous value conscious attitude. Even at today’s oil prices, running a sedan on diesel or petrol will still cost the consumers more than on CNG, which is still not widely available. The cost of EV purely depends on the price of electricity which varies significantly. At Rs7 per kWh (kilowatt hour) of power, they cost only about Rs1.1 per km. This saves consumers driving 5,000 km per year over Rs 20,000 annually and taxis much more as they drive 10-15 times as much.
Availability of charging stations is also a big concern since the EVs currently at disposal are not built for long distance traveling and hence need to be charged after a certain amount of distance travelled. The charging stations in India are increasing but slowly - the notion runs on simple economics of demand and supply. If there is consumer shift towards electric vehicles, we will definitely see power distribution companies setting up charging stations at primal locations for customers and could also provide an opportunity for private businesses to consider establishing charging infrastructure for fleet customers. With the government’s robust vision of making India and electric vehicle-only country by 2030, we will see a lot of policy reforms coming into play which will improve the existing landscape of the sector, with one set to come out by the end of this year. It is the right time for the government to create the right framework and let the market decide on which idea or technology it wishes to bank upon.
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