Tides To Surf In the Indian Electric Vehicle Industry
Grow Your Business, Not Your Inbox
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Electric vehicles (EVs) are the future paradigm of the automobile industry. A future whose foundation has been laid and organizations are taking big steps to succeed this initiative. In 2018, the global EV sales, including BEVs, PHEVs, and FCEVs crossed 2 million units. This figure shows the boosting recognition of these vehicles and how the masses have incorporated this new technology in their ecosystem. However, more than 70% of these sales were reported in the US, China and Japan. On the global front, India still has a long way to go but there has been a great start to the journey of getting e-vehicles into the Indian market.
EV promotional efforts are increasing with continuous support from the government, automatic original equipment makers, and other government and non-government agencies that help in creating awareness about these vehicles. Here are some of the key driving factors for the growth of EVs.
- Government funding support in terms of awareness and incentive.
- Strengthening stipulation for these vehicles.
- Rising concern for high pollution level and vehicular emissions.
- Huge investments of automotive companies in EVs.
However, factors such as high cost and slighter distance covered by these vehicles, and lack of standardization proves to be an impediment in the advancement of these vehicles.
In the Asia-Pacific sector, China leads the sales of EVs. It encourages the usage of these vehicles all over the country to tackle spiralling problem of pollution. It is of great goad tiding that the Chinese government renders subsidiaries for electrification of vehicles, which in turn has amplified the overall sales of EVs in China.
In context of the Indian market, electric cars in the passenger segment are growing at a steady rate, including emerging economies across the Asia-Pacific region. So what drives the market growth for these vehicles? It is the gross domestic product and population of a country, improvement in lifestyle, better purchasing power of customers, and developing infrastructure which further acts as a positive reinforcement in the process.
Currently EVs comprise less than 1 per cent of the total vehicles in India. There are more than 400,000 units of electric two-wheelers in action but the number of cars is considerably less. According to the Society of Manufacturers of Electric Vehicles (SMEV), more than 95 per cent of EVs in India are low-speed electric scooters (25 km/h), and these do not require registration or licences.
Though it depends on demand and supply, but if high-speed vehicle with performance as good as its internal combustion engine (ICE) counterparts are available in the market, then the market of high-speed vehicles will grow rapidly. It’s a matter of time for slowly and steadily growing EV industry to grab this market with new technology and innovative product especially in the two-wheelers space.
Opportunities to Bank Upon
Opportunities are available in usage of vehicle-to-grid (V2G) EV charging stations and EV charging stations powered by solar panels. The challenges include high cost of EVs compared with ICE vehicles and stringent rules for installation of charging stations.
India is one of the leading markets in the Asia-Pacific. So what’s stopping manufacturers to make EVs and sell them in India? Apart from some of the hurdles discussed above, another roadblock is government policies and their complexities. Manufacturers are waiting for the government to clear regulatory hurdles and come up with a clear stance on development of EVs to create a complete infrastructure of research and development (R&D), supply chain and battery manufacturing, among others. It was in December 2017 that the government announced a huge investment of $64.1 million on its FAME initiative for launching electric buses, taxis and three-wheelers across 11 large Indian cities.
The success of this initiative will prove to be a boon for the sales of EVs and boost the rate of EV adoption in the country. Moreover, in January 2019, the government has allocated a total of INR 350 crore for investments in research and innovation, under FAME II mission for two-wheelers, three-wheelers and four-wheelers, and especially high-speed vehicles for two-wheeler category with advance battery technology.
Transportation ministry is constantly working towards increasing incentive based mandates for EVs. This would build confidence in automotive OEMs and tier 1 players in the country to boost the technology of these vehicles.
In India, R&D of EVs is rather low because of limited knowledge and resources. The need of the hour is that government should create awareness programmes right at the grassroot level. Introducing courses across various colleges on EVs will be helpful to grow this market.