Top automakers say despite prices of metals like copper, nickel, lead, lithium, cobalt, graphite and manganese used in batteries to run vehicle rising, it would not impact sales of electric vehicles in the country.
They said overall technologies are improving, and with volumes rising prices will come down making electric vehicles attractive and reduce air pollution.
India’s electric mobility mission envisages putting 6 million electric vehicles on the roads by 2020 and aims to make the country an all-electric vehicle market by 2030. But, so far, electric vehicles have not found many takers in the absence of incentives, infrastructure and a policy framework.
“With demand rising for electric and hybrid vehicles, costs will surely come down, making them attractive to buyers,” R C Bhargava, chairman, Maruti Suzuki told Financial Chronicle.
He said Marutis Japanese parent Suzuki Motor will make electric cars at its factory in Gujarat for India and the world. “It takes about two-three years to roll out batteries for electric vehicles,” Bhargava said, adding that it would be operational by 2020.
Suzuki Motor is setting up a lithium-ion battery factory that will charge electric, hybrid and other vehicles from the company’s stable. Suzuki together with Denso, a Toyota company, and Toshiba are investing $80 million (Rs 1,151 crore) for the factory.
Mahindra and Mahindra, which has the lead in electric vehicles technology after it bought Reva Electric Car in 2012, has unveiled a comprehensive technology and product roadmap that aims to produce 60,000 units of electric vehicles annually over the next two years.
“We are investing in next generation EV technology solutions which will deliver longer range and higher speeds. We now plan to expand our production capacity of e-vehicles, looking to ramp it up from a mere 400 units monthly to over 1,000 units in next few months and 5,000 units a month over the next two years period,” Pawan Goenka, chairman at Mahindra Electric, had announced earlier.
Mahindra Electric already sells E20 plus, e-Verito and e-Supro vehicles in the domestic market but sales have not picked up yet.
“The increase in price of materials used in lithium-ion battery is not mainly due to consumption in India. This is based on the trend in overall raw material prices increase across the globe,” Mahesh Babu, CEO, Mahindra Electric told Financial Chronicle.
The consumption of batteries for EVs in India is less than 1 per cent of the global consumption as of today, he said. “The current battery prices are considering an acceptable variation in raw material prices and it has not impacted the prices,” Babu pointed out.
However, if there is a significant increase from the current levels, it would have an impact on lithium-ion battery prices, he said.
“With the growing popularity of electric vehicles new avenues of mining for metals will open and prices will not be a roadblock for electric vehicles,” Sumit Sawhney, country CEO and MD, Renault India Operations, told Financial Chronicle. He said Renault has its own electric portfolio and also the alliance partner Nissan but it would wait till a firm policy was rolled out in the country.
Sugato Sen, deputy director general at Society of Indian Automobile Manufacturers or Siam, the apex trade lobby, said there was no record of electric vehicles sold in the country.
But although lithium prices doubled over the last one year, which is globally controlled by a Chinese company, overall prices would come down with technologies improving and volumes rising, he said.
Quite significantly, the Centre has announced that it will provide up to Rs 105 crore ($16.2m) in grant funding to Smart Cities for the purchase of electric vehicles to be used for mass transportation under a pilot project run under the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India (FAME) programme.
The department of heavyindustry within the ministry of heavy industries and public enterprises, has issued a notice inviting expressions of interest (EoI) from state government departments, undertakings, municipal corporations, and public authorities for innovative proposals that involve multi-modal public transportation based on a purely electric power train.
The government will also provide funds to set up charging infrastructure in the selected cities with an upper ceiling of Rs 150 million ($2.3 million) per city.