Electric Vehicles Are Taking Over The Roads. #5 Factors Guiding the Transformation of India's Locomotive Industry
India's Electric Vehicle market is projected to grow at a CAGR of over 37 per cent in the next five years
With PM Narendra Modi’s big dream of electrifying 30 per cent of the Indian vehicles by 2030 and the massive challenge to deal with pollution ahead of the country, all vehicle manufacturers are eying the EV space. While India’s Electric Vehicle market is projected to grow at a CAGR of over 37 per cent in the next five years, there are major challenges ahead of the road leading to EV adoption in India.
Every Indian, rich or poor, takes pride in the vehicle he owns, regardless of its mileage and price. However, the every day rising petroleum prices and the life-threatening level of air pollution has the Indian drivers pondering over the prospect of switching to eco-friendly vehicles. As we can’t neglect the vehicle owners’ resolve to buy the electric vehicles, so as their hesitance in actually buying one.
The spreading awareness regarding the harmful effects of air pollution among the citizens and the huge investments by vehicle manufacturers in the space has ensured a robust growth for India’s electric vehicle market but the challenges remain. The locomotive industry is slated to transform and here are the key factors which will determine the pace of this awaited change:
Future of Mobility?
The adoption rate of electric vehicle driving is moving at a certain speed, which might seem measly in front of the superfluous target but is in reality inspirational. Customers are aware that owning an EV comes with significant benefits including lower running costs, lower maintenance costs, pollution-free driving and lower lifecycle emissions, add in the worldwide initiative to reduce carbon footprint.
Giving an insight into the technical aspects of electric vehicles, Founder and CEO of Ultraviolette Automotive Narayan Subramaniam said, “Electric motors, in general, are very responsive and can generate maximum torque from low speeds – the acceleration can surprise most first-time riders. And in terms of efficiency EVs convert almost 90% of energy from their batteries into moving the vehicle.”
Talking about the sector to sector transformation, two-wheeler space is projected to go electric the fastest due to the low-cost barrier. When the electric vehicles to take over, the entire face of mobility would change as the mechanical components would have to be replaced by the electric ones for manufacturers and the vendors, said Ather Energy co-founder and CEO Tarun Mehta.
The government of India has been taking some significant steps to accelerate the absorption of electric vehicles in the system, the introduction of the FAME (Faster Adoption and Manufacture of Electric Vehicles) program being the most considerate one. Launched in 2015 as a part of the National Electric Mobility Mission Plan, the scheme offers incentives to EV manufacturers.
FAME also discourages privately-owned petrol and diesel-fuelled vehicles, to creating draft policies on 3-year free parking and toll waivers – we see all these as major strides in the EV agenda in India. While the Government’s vision to electrify the entire public transportation system by 2030 seems like a huge task, it is not impossible and the two-wheelers can join the race too via industry collaboration.
“Government should upfront the entire subsidy they are planning instead of spreading it over several years and offer them to better-designed vehicles instead of poor ones to ensure a superior adoption as once the volume has hit, the industry will take off anyway,” suggested Mehta while recommending the placement of stable policies as fluctuating schemes affect the overall investment in the industry.
While the tightening of emission norms for Internal Combustion Engine (ICE) powered vehicles from regulatory authorities has pushed the automobile manufacturers to give a serious thought to developing their EV strategies, “range anxiety has been minimized by providing a significant range on the vehicle - sufficient to cover the heaviest usage scenarios,” added Subramaniam.
A number of myths associated with the power, protection and performance of electric vehicles have taken over the prospective buyers’ good judgment, forcing them into doubting the capability of . The need for building a network of energy stations that would provide access to energy on-the-go is topmost.
A nationwide deployment of charging infrastructure is missing from the government’s agenda so far, which will become a necessity once the EV adoption rate shoots up. However, Mehta argued that even though a proper business model around EV charging is yet to be established, people can as much utilize their house electricity to charge up their vehicles with the only requirement of getting a 3-pin socket installed in their parking lot.
The mindsets of Indian consumers is evolving as people are starting to understand and adopt new technologies and are now looking for cleaner alternatives for transportation and mobility. All they seek is a "powerful combination of progressive design, energy-efficient technology and exceptional experience in using and owning the vehicle," Subramaniam suggested.
Mehta firmly believes that EV adoption can massively change the face of Indian society. Counting the advantages of owning an electric vehicle, he said, “The running cost of electric vehicles is one-eighth that of petrol vehicles and require very little maintenance,” adding, “Pollution is a big delta along with fuel saving.”
The overall distribution and dealership business will also undergo a radical change with electric vehicles. Electric vehicles have environmental benefits associated with them, the lack of which has a direct and indirect cost for the country. More so, the vehicle needs to be manufactured as per the India requirements as copying a foreign model won’t work here, suggested SmartE co-founder and CEO Goldie Srivastava.
With modern consumers willing to seek out new solutions and experiences, EV has great potential to take over Indian roads in the coming years. “The biggest positioning is in the novelty as the electric vehicles are of a better ride quality and performance compared to their petrol counterparts,” believes Mehta.
Despite the industry being at a nascent stage, massive steps are taking place to facilitate the adoption of electric vehicles in the country, especially in the public segment. “Around 7 to 10 lakhs three-wheelers running on batteries are always flying in the country which suggests that we have already made a significant beginning in terms of utilizing the technology,” Srivastava opined.
A business journalist looking to find happiness in the world of startups, investments, MSMEs and more. Officially started her career as a news reporter for News World India, Aastha had short stints with NDTV and NewsX. A true optimist seeking to make a difference, she is a comic junkie who'd rather watch a typical Bollywood masala than a Hollywood blockbuster.