Is EV Localization Mandate Crucial In the Long Run?
Entrepreneur's New Year’s Guide
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Adoption of electric vehicles in India is being widely discussed in India and the shift is necessary at a time when India has been witnessing rising levels of air pollution and falling inventory of natural resources. While both the government and industry players are pushing for electric mobility, electric vehicle sales have not been encouraging.
While speaking at World EV Show (WEVS), organised by Trescon, industry experts said that the localization mandate in FAME II is one of the reasons behind slower growth of electric vehicles in India. However, Debi Prasad Dash, Director of India Energy Storage Alliance (IESA) said that localization is important to make good quality products in the long run. “For making good quality products, this (FAME II) is the correct way even if it is not correct for some companies,” Dash added.
Dash also explained that while many battery assemblers are entering the Indian market, the majority of them may have to shut down because aspects such as thermal management, BMS etc are not being addressed. Thus local manufacturing is important for making good quality products in the long run.
While speaking at the same event, Harkiran Sanjeevi, deputy-director general at NITI Aayog said that the government wants companies to manufacture locally in India for both the domestic and foreign markets. According to Sanjeevi, India has the resources to make localization possible. "The only thing lacking is the lithium-ion for batteries. Government is entering into partnerships with other countries for sourcing the raw materials."
Explaining about lowering sales of electric vehicles, Hero Electric CEO Sohinder Gill said that flip flop policies might be the reason behind the low sales. Regulation needs and ARAI certification have also caused lower availability of vehicles in the market.
Slow Adoption Is Good For Market
According to Sanjay Khatri, the country head, corporate and government affairs, Bosch Group, the slow adoption is good because the original equipment manufacturers need to understand the market dynamics, customer behaviour, and technological changes, etc.
Khatri also explained that there is no point in having bad quality and lousy vehicles on road and achieve electric mobility. The development is happening slowly because players need to manufacture good quality products for the consumers so that they become the ones who benefit at the end.
Capacity Creation Takes Time
According to the panellists, capacity creation takes time. “If you look at the Indian automotive industry, 1984 onwards, every India still does not own cars even after 35 years. The evolution has been gradual and robust. If we start putting numbers such as 25 per cent by 2020 then we are not letting the evolution happen gradually,” said Vijay Jaiswal, Director of Automotive & Electric Mobility, Government of Telangana.
Highlighting the need for good quality products, Jaiswal explained that if anything gets sold to the users in the name of an electric vehicle, then the revolution is going to die sooner or later.
Policymakers Should Look At Battery Swapping
Indian electric vehicle revolution is said to be led by two and three-wheelers. According to many experts, the battery swapping technique can be used by electric two and three-wheelers as an alternative to charging infrastructure.
According to Khatri, battery swapping should be brought under the purview of government policies including the second phase of FAME.