message - mrss india

MESSAGE I am happy to state that PHD Chamber of Commerce and Industry is organising

Electric Vehicle Summit on 19 January 2018 to deliberate on the road map for

smooth transition to Electric Vehicles in India by 2030 and the technology/

innovations required for the same.

To initiate and move forward towards low-carbon transport ecosystem, the

deliberations of the Summit shall be beneficial for manufactures, policy makers,

innovators, researchers and strategists to bridge their collective strengths and

exchange information, innovation and knowledge.

The EV summit is also aligned to the UN Sustainable Development Goal of taking

actions in providing clean energy and to the Paris Declaration on Electro‐Mobility

and Climate Change & Call to Action that calls for a commitment

I wish the Summit all success and hope that this will go a long way in highlighting the

significance of Electric Vehicles and bringing the Government and automobile/auto

part manufacturers on the same page for sustainably adopting Electric Vehicles in

India.

Preface ........................................................................5

Automobile Industry ....................................................7

Government Initiatives and Support ..........................14

Road Map - Electric Vehicles ....................................16

Challenges .................................................................18

Key Points .................................................................20

ContEnt

Electric Vehicles: Road Ahead “Innovation • Sustainability • 2030 Road Map 5

Preface

there has been a major technological metamorphosis witnessed in automotive industry

globally including India to combat air pollution, effort to identify alternative fuels by way

of developing eco friendly advanced technology which can offer most competitive and value

for money proposition to the intending consumers in the automobile market. Globally India is

2nd largest 2W market, 5th largest PV market and 7th largest CV market; therefore, there is a

tremendous potential exists for new-tech vehicle if industry one can meet the expectation of the

consumer. the Automotive Industry players have been putting lot of investment in the form of

Research & Development to arrive new age tech-vehicle and this is needless to state that Electric

Vehicle (EV) has been evolved which might transform the automotive industry fully. For India, EV

has great potential to grow and emerge amongst top in the globalized automotive world. the

Department of Heavy Industry and Public Enterprise, Government of India released The National

Electric Mobility Mission Plan 2020 (nEMMP) which is one of the most important and strong

initiatives undertaken by the Government of India. the department aims to bring paradigm shift

in the automotive and transportation industry in the country. the objective of the nEMMP is

to enhance national energy security, mitigate adverse environmental impacts (including Co2)

from road transport vehicles and boost domestic manufacturing capabilities for electric vehicles.

Urban transport planning in India has been addressing to various challenges such as rising toxic

gas emissions, adverse rising energy risks and deteriorating air quality. therefore, to mitigate

the adverse impacts of transport on those indicators, there is a range of additional measures will

be required beyond the existing policies. Electric vehicles (EVs) offer alternate mobility options

that help to minimize these adverse impacts. technological advancements are making EVs more

attractive to the consumer due to the increasing convenience and already started to penetrate

the market in various Indian cities. Given the established auto manufacturing industry in India, the

recent interest in electric vehicles and the expected growth in transport demand, India have the

opportunity of creating domestic EV industry and emerging as a global leader in EV manufacturing

market.

this knowledge report is an attempt to look at the current EV scenario, market potential, automobile

industry, government initiatives and supports, future of EVs in Indian market, challenges, opportunities

and the recent developments in EV markets. Study has encapsulated the following key points:

● Electric two and four wheelers with driving ranges and other characteristics comparable to

conventional vehicles are available even today; however costs and charging times are high.

Electric Vehicles: Road Ahead “Innovation • Sustainability • 2030 Road Map6

● EV shares have increased globally and this has been prompted numerous innovations in

EV related technologies. For example, battery technologies are expected to undergo major

transitions which will bring down costs and increase energy density.

● Due to growing urbanization transport demand is expected to increase significantly in future

and 2W will continue to remain the mode of choice for common man. the share of 4W is

expected to increase significantly due to overall growth of income amongst target segments.

this will give more space for new edge technology vehicle to combat air pollution. Electric two

wheelers with low costs and limited driving range are suited for intra city driving since the trip

lengths are shorter.

● this is quite acceptable fact that mass penetration of any new concept / technology will require

both improved infrastructures and demand side incentives (e.g., tax incentives) always.

● Higher EV penetration will result in an increase in electricity demand; however, according to

different technical expert the demand will not be very significant and does not require major

capacity additions within the power sector. Higher penetration of EVs provides benefits of

energy security which become significant from 2025 onwards.

● EVs also result in air quality benefits in the short term. In the low carbon scenario, where the

EV penetration is highest, the emissions of PM 2.5 fall below half of the current levels by 2035.

therefore, it can be concluded that the success of the adoption of electric vehicles totally depend

on the performance of the various stakeholders in the EV cycle e.g. awareness of citizens, support

from national and local governments and the global technological advances. the role of national

governments is significant in setting standards and regulations for charging infrastructures (devices

and batteries) and providing incentives for vehicles. the government can always encourage R&D for

innovative models for recycling and reuse of batteries, improving availability of charged batteries,

battery and vehicle technology, using EVs for improving energy access, renewable integration and

efficient pricing of electricity. Local governments can facilitate EVs by a range of interventions

including mandates and incentives that promote investments in developing local EV targets,

charging infrastructure, setting stricter emission standards for vehicles, priority for EVs in parking

and traffic and facilitating public private partnerships.


Automobile Industry

the Indian automobile industry is one of the

largest growing industries across the globe, and

contributes largely in the country’s manufacturing

facilities. In addition, the automotive industry in India is

further expected to pull up with production of Electric

Vehicles. Moreover, electric vehicle industry in India

is a still at the infancy stage as compared with other

international markets such as US, China and Europe

etc. Moreover, a drastic change is certainly expected

for India’s EV industry with the major focus given by the government. However like China, India

is also planning to spend more on subsidizing local companies by pushing them at forefront

of the electric mobility technologies. Faster Adoption and Manufacturing of (Hybrid & Electric

Vehicles (FAME India) scheme will provide a major push for early adoption and market creation

of both hybrid and electric technologies vehicles in the country. the focus of the Government

through this scheme will help to grow hybrid and electric vehicles and to become the first choice

for the consumers so that these vehicles can replace the conventional vehicles and thus reduce

consumption of petro products in the country from the automobile sector. the FAME scheme

is weighted more towards the consumer incentives rather than incentivizing the Research and

Developments, which makes sense the country stands to gain from the technological advances

already made globally.

the automobile sector has a major role in the government’s plan to increase the share of

manufacturing in India’s GDP from 15% now to 25% by 2022. A major initiative will be required

from the government to sell 6 Million EVs by 2020 in the first step to attain the larger vision of

EVs for all by 2030. India’s electric vehicles industry is promising with just 0.1% of the global

market share as compare with China which holds 50% of the global annual market share.

China is spending more on subsidizing local companies and pushing them at the forefront of

electric mobility technologies. Some of the other measures taken up by China include- research

funding and rules framed to discourage vehicles running on fossil fuels. China is also keeping

it mandatory for car makers to manufacture a certain percentage of EVs annually. Some of the

global automotive players like tesla Inc. and toyota Motor Corp. have shown interest in the

Indian EV market. nissan also plans to bring its bestselling electric vehicle Leaf to India. Suzuki

Motor Corp. announced that it would form a joint venture with Denso Corp. and toshiba Corp.

to produce lithium ion batteries for EVs in India with an initial capital expenditure of USD 184


million. Large Indian corporate like Vedanta Group, BHEL, and

PGCIL have shown interest in making EVs, developing storage

solutions respectively and setting up charging stations.

Worldwide automobile industry is on the verge of major structural

change which is largely due to growing concern for environment

followed by energy security and advancements in technologies.

one of the key changes is the rapid developments in the field

of electric mobility which might change the automotive industry. With an ambition as per the

Automotive Mission Plan 2016-2026, auto industry of India needs to consider a practical and

pioneering move toward to ride this revolution wave. this is evident from the available data that

different countries adopted long term policies which are aligned with each nation’s ecological

goals towards de-carbonization of the industrial activities, their market environments, per capita

income, purchasing power and strategic needs & goals.

EV Market- Global Outlook:

Electric vehicles are self propelling electric motors or transportation machines for goods as well

as passengers, utilizing the power stored in the batteries with the help of both internal combustion

engine or via electric motors or electric motors working in tandem. Electric vehicles are considered

to be the vehicles of the future and are largely likely to make conventional vehicles obsolete.

the emerging threat of global warming, the ever increases fuel prices, excessive dependency on

fossil fuels and driving trends are the major reasons which have accelerated the development of

Electric Vehicles (EVs). As a means to meet ambitious Co2 reduction targets, to avoid penalty

fees and to account for changes in the awareness of customers concerning environmental issues,

a variety of different propulsion concepts are developed.

● the transport sector represents a critical percentage of greenhouse gas emission. transport

emissions are estimated to increase by 84% to 2030.

● Key technologies such as hydrogen fuel cell, electric cars and bio fuels are expected to

contribute to emission reduction in the long run.

EV Vehicles market accounted USD 112,111 Million in 2016 and is estimated to reach USD

360,840 Million by 2026 as per the industry source. the market is primarily driven by the growth

of eco-friendly alternatives considered for transportation. the demand for electric vehicles is

governed by the increase in demand for fuel-efficient, high-performance, and low-emission

vehicles. In addition, the trend of reduction in vehicular emission due to stringent rules &


regulations in several countries and growth of public charging infrastructure in China, France,

norway and the other developed countries. However, high manufacturing cost of electric vehicles

and low fuel economy & serviceability are the factors restraining the market growth. Moreover,

the technological advancements in electric vehicles and proactive government initiatives are

expected to unfold various opportunities for the growth of the stakeholders of this market, such

as system integrators, vehicle manufacturers, engine manufactures, and component providers, in

the near future. the growth of electric vehicles is attributed to the ever increasing production and

sales of automobiles. Vehicles are becoming an increasingly affordable commodity owing to the

growing disposable incomes across the world. though in the current scenario, the percentage

share of the EVs is extremely small in the automotive industry, it is majorly likely to expand at

the fastest rate than expected due to the growing rate of adoption, rise in fuel prices owing

to the higher current usage, the government regulations to reduce the amount of greenhouse

gases emitted by vehicles, high fuel efficiency offered by the electric vehicles and soundless

operation of the electric vehicles. Another important factor which is pushing the surge of electric

vehicles market is the attractive incentives provided by the governments of various countries

with a motive to push the sale of electric vehicles. though, there is an increasing demand for EVs

and they have proven to be advantageous over conventional vehicles, there are factors hindering

the growth of this market. Electric vehicles come along with a high price tag which might evoke

customer apathy towards this market. Scarcity of charging points within major cities is a huge

hurdle for the growth of the global electric vehicles market.

the electric vehicles lack alternate source of fuel which often

put the schedule of the commute in jeopardy. the complete

drainage of the battery can stall the car and can put the

traveler at risk. these loopholes in the electric vehicles are

a major drawback for the market. Electric vehicles provide

excellent torque at low speeds but its performance drops at

higher speed in comparison with conventional vehicles, this

difference in performance can also act as a restraint to the growth of the global electric vehicles

market.

From the available information the use of electric vehicles is highly prevalent in north America,

Europe and Asia Pacific regions. In addition, well developed and extensive charging infrastructure;

along with the incentives provided by the governments of these regions are expediting the growth

of the electric vehicles. In contrast, Latin America and Middle East & Africa regions show a slower

adoption of electric vehicles owing to the availability of flexible fuel. Latin America is projected

to create a total incremental opportunity of USD 1,332.6 Million between 2016 and 2030. the

segment is expected to account for 0.3% share of the global market absolute USD incremental

opportunity during the same period. Almost all the major manufacturers of automobile with a


global reach have manufactured and supplied electric

vehicles. toyota Motor Corporation, Honda Motor Co., Ltd.,

Ford Motor Company, nissan Motor Corporation Ltd., tesla

Motors, Inc., Bayerische Motoren Werke AG are some of the

prominent companies engaged in the manufacture of electric

vehicles releasing hybrids, plug-in hybrids or pure battery

electric vehicles variants.

EV Market:

India

the Electric Vehicle industry in India is less than 1% of the total vehicle sales. Currently, Indian

roads are dominated by conventional vehicles and have approximately 0.4 Million electric two

wheelers and a few thousand electric cars only. High cost of batteries and cars has been a

major obstacle to the widespread consumer adoption of EVs in India. Lack of adequate charging

infrastructure is another impediment which has slowed down its growth. A typical electric car in

India costs around InR0.5 to 0.6 million which is approximately 2.5 times higher than an entry level

fuel efficient conventional car. In addition, the battery life of the EV is approximately 4-5 years and

the replacement cost is around InR 0.2 to 0.3 million, which further adds to the cost of ownership.

the single major factor for slow penetration of EVs is their high price which is around 2 to 2.5

times more than a comparable conventional vehicle. the other important concern of EVs is their

range per charge. to offer a higher range, higher battery capacity in the vehicle is needed which

lead to increase in the EV price roughly proportionately and increases the price gap. At the same

time, however, EV offers a significant advantage on operating cost (running plus maintenance

cost) which could be as low as 1/4th of that of a conventional vehicle. As compared to a personal

vehicle, commercial vehicles like taxi fleets, bus fleets, 3-wheelers run 4 to 5 times longer distance

per day. therefore, for such higher mileage vehicles savings on operating cost will pay-back

the initial high purchase price faster than low mileage vehicles. Attractive power tariff can play

a significant role to offset capital cost of buying EV

with lower operating cost at faster pace. Most of the

personal vehicle buyers consider upfront purchase

price, fuel efficiency, maintenance and service cost,

comfort features as the key buying criteria. However,

commercial vehicle buyers consider Capital cost

as well as operational cost economics as the most

important buying criteria. In India, affordability index

is lower than developed economies due to lower per


capita income. therefore, manufacturers

will have to offer medium range electric

vehicles so that the cost of the vehicle

remains affordable for the masses. this

would in turn would need more frequent

charging, especially for commercial

fleets where the vehicle would run for

upto 200~250 km per day. Charging

infrastructure for fleet application would

require more of fast charging stations to

minimize the turnaround time of the vehicles. For personal vehicles where the usage would be up

to 50 km per day on an average though the figure will be more in case of metros, slow chargers

at home, workplaces, opportunity places like shopping malls, cinemas etc. would be adequate.

the EV Industry is currently dominated by electric two wheelers. More than 95% of the electric

vehicles on Indian roads are low speed electric vehicles. As of March 2016, nearly 5 lakh EVs

had been sold in the country which is around 0.1% of the global market share. now, the EV

Industry has started gaining momentum once again towards the target set under national Electric

Mobility Mission Plan (nEMMP) 2020 of 6-7 million sales of EVs by 2020. Government of India has

indicated a great ambitious plan that by 2030 all new vehicles should be EVs. the EV Industry had

noticed an increase of nearly 40% sales of electric vehicles over FY 2015-16. the sales of electric

two wheelers, has started increasing once again with the introduction of FAME Scheme by DHI in

2015. As per the industry estimation nearly 6 lakh electric 2W would be sold by 2022. the electric

three wheeler market is mainly dominated by e-rickshaws in the country where approximately 4 to

4.5 lakh e-rickshaws are currently running on Indian roads. Kinetic green, a Pune based company

has launched e-rickshaws based on lithium ion battery this year to overcome the limitations of

frequent battery replacement and higher charging time of 8 to 10 hours. But again the cost of the

lithium ion battery is more than 2 times the cost of lead acid battery used in these e-rickshaws,

but this scenario is expected to change fast. As per the industry estimation, this segment would

grow rapidly with a CAGR of 40 to 45% in

coming years.

China:

the expanding and growing EVs market in

China includes public vehicle procurement,

regulatory incentives, research and

development, vehicle production

subsidies, public charging investments


and consumer incentives. Since the 2000s,

China has spent more than USD 1 billion per

year at the national level in R&D loans and

grants, plus an additional USD 1 billion from

local governments and industry (oECD, 2015).

From 2009, China shifted toward a focus on

incentives for manufacturer production, public

procurement (e.g., fleets, taxis), and private

consumer subsidies for electric vehicles, first

in 10 particular cities and later 25 (Howell et al.,

2014; oECD, 2015). the incentives generally

have not been available to foreign-manufactured electric vehicles. of the leading electric vehicle

models in China, 15 of the top 16 are domestically produced. China’s electric vehicle growth was

slow from 2010-2013, but current growth brought China’s electric passenger vehicle sales to

more than 50,000 per year, behind only the United States in total national annual sales.

A. Japan:

Among the leaders in early electric vehicle market, Japan is showing growth with more than

30,000 sales. Japan has goals for fuel cell electric vehicles 3%, plug-in electric vehicles to make

up 20%-30%, and of total vehicle sales by 2030 (MEtI, 2010). Japan holds the highest share of

hybrid electric vehicles around the world; this hybrid success could provide an example of how

comprehensive support policies (e.g., R&D, efficiency standards, consumer fiscal incentives) can

help support the development of a market for advanced technology (see sidebar). As part of its

electric vehicle promotion efforts, Japan also has several consumer incentives and substantial

electric vehicle charging infrastructure in place. Incentive programs allow for a one-time subsidy

and purchasing tax exemptions for EVs and other qualified fuel-efficient vehicles since 2009.

the subsidies are based on the price difference between an EV and a comparable gasoline car,

with a maximum of 850,000 yen (about 6,300 Euros) (see CEV, 2015; Mock & Yang, 2014). these

incentives generally amount to about 3,000-5,000 Euros for typical BEVs and PHEVs. Japan also

has reductions and exemptions for BEV and PHEV acquisition and annual tonnage taxes that can

nearly double those upfront incentives for the first vehicle owner

United States:

With more than 100,000 sales annually, the

U.S. had the highest electric vehicle sales of

any country. the U.S. set a goal of 1 Million

cumulative electric vehicles by 2015 and


is about a third of the way to that goal. national policies to promote electric vehicles include

consumer subsidies and infrastructure investments. A federal income tax credit grants from USD

2,500 per PHEV (for about 10-15 mile range) up to USD 7,500 for longer-range PHEV (at 16 kWh

battery, or about 40-mile PHEV) and BEVs. Federal funding for an expansive national public

electric vehicle charging network has helped in the rollout of more than 20,000 charge outlets at

8,000 stations (U.S. DoE, 2015). the U.S. also has a growing workplace charging network that

includes more than 100 employers, 250 workplaces, and more than 4,000 chargers.

B. Europe:

there is a great diversity of electric vehicle promotion activity across Europe. Common to the

European Union member states, vehicles are all promoted by the increasingly stringent carbon

dioxide emission standards that aim to achieve a 95 g Co2/km new vehicle fleet in 2021, and

these regulations provide further promotion for electric vehicles with “super credits” and the

omission of upstream emissions (Mock, 2014). European countries have installed various levels

of electric vehicle charging equipment in order to improve the range confidence of electric vehicle

users and value proposition, electric range. the EV wide Clean Power for transport directive

provides targets for each member state regarding the increased deployment of plug-in charging

and hydrogen refueling infrastructure (European Commission, 2014). Some European countries

have also established bold targets, offered large fiscal incentives to consumers, installed

vehicle charging networks, and implemented other support policies to promote electric vehicle

deployment. Also, each of the European countries has had higher gasoline and diesel prices of

about 1.50-1.80 Euros per litter that inherently have provided greater fuel savings and a stronger

relative motivation for alternative fuel vehicles.


Government Initiatives and Support

In 2013, Government of India launched a national Electric Mobility Mission Plan 2020. Under the

mission plan, the FAME India Scheme (a scheme for faster adoption and manufacturing of hybrid

& electric vehicles) was launched in FY-2015 for 2 years as Phase-1 (now extended until 31st

March 2018). A phase-in approach will be needed to bring policy changes in the FAME Scheme

to promote electric vehicle technology, the FAME scheme needs be extended until March 2020

as per the original plan to keeps the momentum going and the proposed new measures should

be phased-in over the next 2-3 years for a smooth transition to the next level. taking cognizance

of the advancements in the electric vehicle technology, markets development globally and a dire

need to reduce energy demand and de-carbonization of the auto sector in India, nItI Aayog’s

transformative mobility report of 2017 has set out a desirable and ambitious roadmap for pure

electric vehicles, wherein, it is said that if India adopts a transformative solution of shared-

connected electric mobility, 100% public transport vehicles and 40% of private vehicles can

become all electric by 2030. this vision needs to be expanded to have a future of all electric

vehicles. In this regard, the Indian auto industry commits itself to fully support the Government

for an ambitious goal of electric mobility by expanding it further to seek a goal of a fully electric

vehicle regime in a phased manner with the following vision to align with the objective of the India

Energy Security Scenario 2047:

“the Society of Indian Automobile Manufacturers, along with its automobile manufacturers, aims

to achieve new vehicle sales in the country to be hundred percent pure electric vehicles (battery

electric and fuel cell vehicles) on the hundredth anniversary of India’s independence (2047), with

a following roadmap:

● All new vehicle sales for intra-city public transport fleets to be pure electric vehicles by 2030

● Forty percent of new vehicle sales in the country to be pure electric vehicles by 2030

to ensure smooth phasing in of pure electric vehicles and to sustain the transition to cleaner

fossil fuel vehicles, the IC engine upgradation must continue over the next decade or so.

In the process, the Indian automobile industry also aims to become a leading global hub for

design, manufacture and export of pure electric vehicles supporting the ‘Make in India’ initiative.

As the electric vehicle technology is evolving rapidly, this knowledge report has refrained from any

future projections on technology development, costs and demand. However, we have analyzed


that mass adoption of electric vehicle will ultimately depend upon two major attributes – Buyer’s

Preference (determined by affordability, performance and durability) and User Friendliness (ease

of charging and ease of upkeep).

In order to promote electric vehicles (EVs) in India, It has suggested reduction of GSt on such

automobiles to 5%, besides one-time income tax deduction of 30 per cent of vehicle price for

non-financed buyers. Exemption of toll charges for all EVs, parking fees for all personal EVs

and allowing electric 2-wheelers to be used as taxis nationwide are among several measures

suggested by our study.

Companies like KPIt, BYD, Ashok

Leyland, tata Motors and JBM Auto in

association with Solaris have already

launched their electric buses in the

market. With the increase in number

of players and competition, everybody

is expecting the initial cost of these

buses to come down further. And as

per Hon. Minsiter for Road transport,

Shri. nitin Gadkari’s recent statement,

Electric buses would be available soon

at a price of InR 95 Lakh by 2018 as compared to InR 2.5 crore earlier.

Government is working on a policy where if the buses of the state road transport undertakings are

converted into electric, then it is possible to run them with private investment. IESA urges policy

makers to set realistic targets by analyzing the traffic patterns and identifying cities and routes

that are most suited for introduction of electric buses in India. there is also a need to scale up the

rollout target as by launching 10-25 vehicle pilots, policy makers are sending mixed signals to the

industry. By focusing on shorter and pre-defined routes as well as by providing charging stations

at multiple locations, the cost of the electric buses can be brought down immediately rather than

waiting for the cost of storage to drop.

to remove the barrier of lack of charging infrastructure, the government is currently considering

an option of battery swapping along with the installations of new charging stations. this segment

has also started gaining momentum slowly as the state government of Himachal has already

released a tender to procure 75 electric buses. Bangalore Metropolitan transport Corporation

(BMtC) board has also given the confirmation to procure 150 electric buses for Bangalore City.

Pune City has also floated a tender to procure 100 electric buses. And as per the estimation done

by IESA, 1500 to 2000 electric buses would be sold till 2022.


Road Map – Electric Vehicles

the adoption of EV has multifaceted impact – both economically and environmentally in India.

Every year India imports more than 80% of its crude oil requirement which grows steadily each

year. It accounts for 29.4% of world oil consumption and is behind only China and the US.

Almost 40% is used by the transport industry through passenger cars, two wheelers, trucks and

buses. At the current rate, the demand for oil and the consequent import bill is expected to grow

significantly. Electric vehicles will have a big role to play in this. Import of oil and the resultant

outgo of foreign exchange has been a major problem for all governments in India. Electric vehicles

would also help to solve a more chronic problem of rising pollution in Indian cities. India is the third

largest emitter of carbon dioxide behind China and US. Vehicular emissions are considered to be

one of the major contributors to poor ambient air conditions across the country. Further, given the

high congestion in the cities that leads to stop go traffic conditions, conventional vehicles tend to

idle more that leads to even higher pollution.

though the roadmap on electric mobility is awaited from the government, the domestic automobile

industry came up with its own targets for electric vehicles in the country. the industry will be able

to achieve full electric mobility for intra-city public transport fleets by 2030 & hybrids and other

alternate fuels will account for another 20 percent sales by 2030. the study says that electric

vehicles account for 100% of new vehicle sales by 2047, linking it to the centenary of India’s

independence. though the industry’s timelines are much more conservative vis a vis government’s

ambitions. the Union government, in a move to push electric vehicles, has decided to replace

all diesel and petrol-run vehicles used by its officials with electric vehicles in the next few years.

Energy Efficiency Services Ltd (EESL), a company floated by the ministry of power, has placed

an order for 500 electric vehicles with tata Motors and Mahindra and Mahindra. the delivery of

these vehicles has already started.

Most leading manufacturers in the

country have started preparing their

respective strategies to introduce

fully electric vehicles in India. India

has a tremendous opportunity in EV

adoption with commercial vehicle

segments focusing on public

transport. Since 2016, pilot projects

have been carried out so far in

cities such as Bangalore, Delhi and


Himachal. High Initial Cost and lack of charging infrastructure are key barriers which are hindering

the growth of electric buses in India.

the sales of electric passenger vehicles in India are very low. this segment is continuously lagging

in maintaining healthy sales traction due to several barriers associated with these vehicles such

as high initial cost, lack of charging infrastructure, higher battery replacement cost, and low

driving range. the second biggest problem with this segment is the lack of competition in the

market. other than Mahindra Electric, there are no major players available in the market. It is

anticipated that number of multinational car manufacturers will introduce EV models in India. As

per the analysis done by IESA, 30,000 to 40,000 cars would be sold till 2022 based on current

policy drivers.


Challenges

Battery is the most important component of an electric vehicle and typically constitutes up

to about half of the vehicle cost and weight. the choice of batteries depends on the energy

density, weight and costs. Batteries are the largest component in an EV, accounts for nearly

50% of the total cost of an electric vehicle. the following four types of batteries are commonly

used today in EVs: Lead Acid, nickel Cadmium (niCd), nickel Metal Hydride (niMH) & Lithium-

ion (Li-ion). Lithium-ion batteries have higher specific energy relative to the other battery types.

In the future, technology innovations with Li-ion and other battery technologies are expected to

result in batteries with much higher specific energy and lower costs. As per the study, the prices

of lithium-ion batteries used by most EVs have dropped 73% over the last six years. though

the cost of electric battery has declined recently, it still remains on the higher side. However, its

operating cost per kilometer driven is lower. India does not have any lithium deposits therefore

it is a challenge to setting up a viable battery manufacturing plant in India and it also means that

companies must look for other options to power such vehicles. R&D labs across the world are

working in this direction. Electric cycles and low range mopeds have simple battery units while

electric cars deploy a large number of batteries. traditionally, most electric vehicles have used

lead-acid batteries due to their mature technology, easy availability, and low cost. However, since

the 1990s battery technologies have evolved significantly and several new types of batteries have

been developed (Zhang, 2012). More recently, batteries using combinations of lithium ion and

its variations are gaining widespread acceptance due to better efficiency, reduced weight, lower

charging time, better power output, longer lifetime, and reduced environmental implications from

battery disposal.

As per the estimation, India will have an all-electric car fleet in future. While government’s support

and technological advancements can fast-track the country’s automobile industry’s journey

towards that goal, there are still many challenges to be dealt with. the decrease in battery costs

could be even higher since aside from the technological factors (battery technology, capacity (Wh),

and energy density (Wh/kg), economies of scale brought about by increased demand of EVs may

also play an important role. With improvements in battery technologies, battery costs have come

down over time and are expected to drop further as the markets for electric vehicle and other allied

markets expand in the near future. With increasing use of EVs, governments will need to bring

in mechanisms for end of life management and environmentally safe recycling of EV batteries.

EVs are receiving increasing attention of policy makers and consumers due to a variety of factors

including introduction of attractive EV models, and policies by national and local governments

designed to promote EVs (IEA, 2010). However, scaling up EV penetration and realizing the potential


requires dealing with technical,

infrastructural, market, and

policy related barriers, technical

barriers involve issues related to

efficiency of batteries, charging

time, and driving range. one

of the major barriers is the low

specific energy density of most

batteries used in EVs, especially

lead acid batteries. to achieve

reasonable driving ranges thus

requires bulky batteries adding

to the overall weight of EVs.

to address this issue, battery

manufacturers are working on advanced batteries with higher specific energy density, such as

lithium ion and lithium sulphur battery which can reduce weight requirements of batteries in

future, thereby leading to reductions in weight and possibly cost of EVs. Some other EV related

concerns relate to the driving range and charging time of batteries. But as observed, even current

technologies allow for EVs with high driving range and low charging time. As battery types and

battery technologies improve, the concerns regarding driving range and charging time will get

further reduced.

Opportunity:

Moving towards sustainable growth

Currently challenges appear to be more than the opportunities; the government has started taking

initiatives on building infrastructure for EVs such as constructing charging stations and reducing

the cost of batteries by facilitating technology transfer between the public and private sector. the

Union Budget for FY 2017-18 has allocated InR 795 crore for developing EVs. the shift to EVs

will also help reduce India’s energy imports where it looks to the cut oil import bill to half by 2030

and reduce emissions as a part of its commitment to the Paris climate treaty. the EV market is

growing worldwide fuelled by stricter environmental measures, technology improvements and

cost reduction in energy storage. India has in its hands a lifetime opportunity to make a remarkable

contribution towards a sustainable future. the Indian passenger car segment is expected to

achieve a new milestone in near future and hybrids could be a practical option to bring down

pollution issues in the air in a phased manner. EV is a great opportunity for the industry, academia

and the regulatory authorities to collaborate for a sustainable future.


Key Points

● the recent national Electric Mobility Mission Plan (nEMMP) has set a sales target of only

7 million EV and Hybrid Vehicle annually by 2020. the sale of electric two wheelers has

started increasing once again with the introduction of FAME Scheme by DHI in 2015 and this

momentum is gin to touch nearly 6 lakh electric 2W by 2022 whereas electric 3W market is

mainly dominated by e-rickshaws in the country. Approximately 4 to 4.5 lakh e-rickshaws are

currently running on Indian roads. As per industry estimation, this segment would grow rapidly

with a CAGR of 40 to 45% in coming years mainly for last mile linkage.

● to remove the barrier of lack of charging infrastructure, the government is currently

considering an option of battery swapping along with the installations of new charging

stations. this segment has also started gaining momentum slowly. the state government of

Himachal has already released a tender to procure 75 electric buses. Bangalore Metropolitan

transport Corporation (BMtC) board has also given the confirmation to procure 150 electric

buses for Bangalore City. Pune City has also floated a tender to procure 100 electric buses.

Even Delhi Government plans to procure 500 e-buses to cope up with pollution crisis. As per

the different industry sources nearly 2500-3000 electric buses would be on road by 2022 by

different state Government.

● the number of Vehicles supported by FAME scheme during phase 1 was 1.2 lakh units where

almost 63% of the subsidy was provided to Mild Hybrid cars only. out of the total 4 wheelers

vehicles sold under FAME Scheme, more than 95% were the Mild Hybrid Vehicles only,

whereas strong hybrids and battery electric were merely 2.5% and 1.6%. our analysis on

FAME scheme indicates that maximum benefit of the scheme was taken by hybrid segment

only. But the government has now removed the mild hybrids from the FAME India subsidy

scheme and which is a must step required to achieve the target of sales of 6-7 million electric

vehicles by 2020.

● the government is currently working on various policies to put the electric vehicles at larger

front in the country and has already defined a roadmap to convert the public transport

into electric in phase 1 and kept the private vehicles the in last phase. As per niti Aayog’s

latest policy, Rohtang in Himachal Pradesh had already begun tests for using only electric

vehicles for public transport. Five cities, namely Bengaluru and Mysore in Karnataka and

Amaravati, Kakinada, and Vishakhapatnam in Andhra Pradesh have been selected further for

the implementation of new policy.


● the government is also working on a model where electric two wheelers, electric three

wheelers, and non-air-conditioned city buses made by automobile companies in India will be

sold without batteries as part of the plan thus slashing the initial cost of vehicles up to 70%.

the batteries will be leased at a specific cost and can be swapped easily with the recharged

ones at stations within a short span of time.

● Among manufacturing companies like BHEL, are also planning to manufacture electric

vehicles in the country and has also tied up with ISRo to provide low cost lithium ion batteries

for electric vehicles in India. tata Power Delhi Distribution Ltd (tPDDL) is also planning to

install 1000 charging stations across Delhi in next four to five years. PGCIL and ntPC are

also exploring opportunities to install charging infrastructure for EV’s across the country. the

Automotive Research Association of India (ARAI) has recently released an industry charging

standard for AC systems and is likely to release one for DC systems soon.

● Currently, most of the EV manufacturers are shifting towards lithium ion batteries but

considering advanced lead acid could also be a suitable option. Lead acid batteries will have

an advantage in terms of recycling and also will not have dependency on other countries for

importing lead acid batteries as we have a well-established in-house facility in the country.

● What the right tariff for the charging of electric vehicles should be – whether we choose

commercial rates / promotional rates for the promotion of EV’s in India or consider time of

day (toD) requirements for the grid. As per IESA recommendations, it could be dependent on

the customer usage such as residential users may be able to charge at residential rates while

the commercial users or the public charging spaces paying at commercial rates. toD aspect

should be considered as well as incentives should be available for Vehicle to grid (V2G) for

providing ancillary services and demand response to grid.

● to bring operational convenience of running longer distance per day, operators and vehicle

manufacturers could also consider battery swapping as one of the possible mechanisms.

Battery swapping in buses, to replace a discharged battery with a charged battery, could

be as low as 10 to 15 minutes. Further, spare batteries for swapping could have a longer

life span if such batteries are subject to slow and climatic controlled charging at a swapping

station. With additional spare batteries to be available for swapping, commercial feasibility

for such a mechanism are to be kept in mind.

● Some of the clean technologies like hybrid electric and alternate fuels can play a role to

achieve fuel savings and emission reduction. these technologies should get active promotion

from the government in a suitable manner.


● While it is expected that viability gap will reduce over time due to technology evolution and

reduction in battery prices, till then, a policy push is must to reduce the viability gap

● one of the key aspects with electric vehicles is that these can be charged at many places like

homes, workplaces, malls, parking spots etc. unlike conventional vehicles which cannot be

re-fueled without dedicated fuelling infrastructure at dedicated locations. However, proper

and suitable charging infrastructure will need to be in place at such locations. Based on use

case, location and density of electric vehicles, a combination of slow and fast chargers will be

required. Early charging infrastructure will be crucial, and Govt. will need to play a leadership

role. Regulations should be passed that will mandate provision of AC slow charging points

in parking areas of residential buildings, workplaces spaces, shopping malls, commercial

complex etc. to ensure that #nEWInDIA is built in line with the vision, “Smart Cities” need

to have charging infrastructure as an integrated piece of development.

****


List of Acronyms:

EVI = Electric Vehicles Initiatives

EV = Electric Vehicle

nEV = new Energy Vehicle

ICE = Internal Combustion Engine

BEV = Battery Electric Vehicle

PHEV = Plug-in Hybrid Electric Vehicle

HEV = Hybrid Electric Vehicle

FCEV = Fuel Cell Electric Vehicle

GHG = Greenhouse Gas

EVSE = Electric Vehicle Supply Equipment

VAt = Value Added tax

nPV = net Present Value

IEA = International Energy Association

oECD = organization for Economic Co-operation and Development

oPEC = organization of the Petroleum Exporting Countries

YtD = Year to Date

oEM = original Equipment Manufacturers

nEMMP = national Electric Mobility Mission Plan

BMtC = Bangalore Metropolitan transport Corporation

CMVR = Central Motor Vehicle Rules


MOTORINDIA – A profile

MOTORINDIA, started in 1956, is India’s leading automobile monthly magazine. For over 61 years, Motorindia has been a credible source of information on the Indian automotive industry. Today, Motorindia is published in English and in Hindi and has an online edition (www.motorindiaonline.in) which is read in over 120 countries worldwide.

In addition to industry news, our readers rely on us to provide in-depth coverage, critical analysis, provocative columns and engaging feature stories. We keep our readers and our advertisers coming back for more with a growing list of unique features, conferences, events, special issues, targeted editions, exclusive online and e-mail programs and digital edition sponsorship opportunities – and the list keeps growing.

We aim to keep readers abreast of what their competitors are doing, aware of the latest changes in legislation, and fully informed about all key developments within this still fast-changing industry.

We look forward to partnering with you in the years to come by offering innovative advertising and sponsorship opportunities.

Please contact:

Mr. N. Balasubramanian,

Cell: 98405 97082, Email: [email protected]

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Team, PHD Chamber

Dr. Jatinder Singh Director, PHD Chamber [email protected]

Mr. PunitChaudhry Joint Secretary, PHD Chamber [email protected]

Team, MRSS India

Mr. Raj Sharma Chairman, MRSS India. [email protected]

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