We should move towards alternative fuel... I am going to do this, whether you like it or not... For pollution, for imports, my ideas are crystal clear” — when Nitin Gadkari issued this stern warning to the automotive industry he firmly conveyed to the world at large that India, like most countries in the world, had decided to go electric in its transportation and it would be in the interest of the Indian automobile industry to start their countdown for conventional vehicles and its curtailed longevity on Indian roads.
The Indian government has backed its vision statement of promoting and opting for electric vehicles in the long run by underlying policies and incentives under the FAME framework. Piyush Goyal, minister for Railways and Coal has also affirmed that India plans to only register electric vehicles after 2030 and will also work towards electrifying all trains and phase out diesel engines in Indian Railways during the next few years.
Worldwide, many developed and developing countries have decided to go electric. According to reports, various countries are in the process of adopting legislations for early adoption of cleaner and new age fuels — ranging from introducing tax incentives and structures, to achieving zero emission or low emission, ban of fossil fuel automobiles, making sure that new energy vehicles form at least 20-70 per cent of all vehicle sales, and complete ban of any vehicle with green house emission by 2040.
India, for now, stands at the policy wherein it will stop registering any non-electric vehicles after 2030.
The urgency for adopting the use of electric vehicles is marked by multiple factors. The foremost is the vast amount of harmful gases emitted by these vehicles that are choking the metros and polluting the cities. According to estimates, every 1,000 km of diesel buses emit nearly 1 tonne of tailpipe CO2 in the environment, in addition to other gases and pollutants. Cities like Delhi, Mumbai and Bangalore face the huge brunt of polluted air considering the large number of vehicles plying on these roads that get chocked on peak traffic —every day — emitting more gases each day.
Other reasons facilitating the adoption of electric vehicles is the inflating oil bill and its dependencies, higher amount of imports, and the technological advancement that is helping adoption.
Despite the worldwide focus on electric vehicles and the evolving technologies worldwide, India has been slow in rolling out EVs for commercial or personal use. Most Indian auto majors — Tata, Mahindra, Suzuki, Ashok Leyland etc– have since been working towards developing a successful model for the Indian roads and Indian consumers, but without much success so far.
The Indian industry has been complaining about the high prices of batteries as a justification of delaying the investment and adoption in new energy vehicles but over time these prices have come down dramatically.
Batteries, which account for nearly 40-60 percent of electric vehicles have seen a decline by 50 per cent in last few years and will reduce further in coming years. Evolving technologies are making batteries smaller and more powerful than the conventional sizes and power, thus making electric vehicles more affordable (relatively) with each passing year.
The second biggest concern for EV adoption has been the absence of charging infrastructure. Indeed it is a bottleneck when it comes to personal vehicles and cars but the same is not entirely true for commercial transportation and buses.
Today, technological advancement allows buses to run upto 300 km on a single charge of three to four hours. The STUs are installing captive charging units thereby offering charging infrastructure to all electric buses. Charging during off-peak hours further brings down the cost of operation while optimising usage of power in existing grids.
Considering that India has over 16 lakh buses (private and public) and adds upto 1 lakh buses every year (including replacements), the problem of vehicular pollution can be quickly resolved if a percentage of these buses are replaced by electric buses.
One concern with EVs have been the cost of these vehicles, which is much higher than that of conventional vehicles. The government has tried to address this issue with the subsidies under the FAME policy that allows upfront concessions and subsidies to the manufacturer.
There are still some concerns on the economic viability — with various assumptions like cost of fuel, long tern operating cost, per mile cost, total cost of ownership with subsidies over the entire life cycle taken in account — but those numbers would start getting advantage of economies of scale once the market expands, manufacturing optimisations are achieved, and the costs go down further. The advantage of zero emission and substantially low per km cost of running, however, continue to play huge advantage even now.
A major challenge faced by the existing auto giants is the cannibalisation of their investment in conventional fuel vehicles, a sizeable part of which would have to be phased out and new investments in the EV production line. No wonder that Tesla and BYD — amongst the largest EV makers in the World — have not been conventional auto companies to foray into EV segment.
The year 2018 would see the adoption of EVs — especially in the commercial vehicle segment — as state governments try and grapple with the increasing pollution issues and realise that early adoption will also play a reasonable role in the way electorates look at their incumbent governments, especially when the elections are due in 2019.
The government intentions were made loud and clear with the identification of 10 cities for pilot project of multi modal electric public transport under FAME announced as a New Year gift to the sector. The decision would provide for over Rs 400 crore of subsidy to 11 cities for launching electric bus, taxi, and three wheelers. An additional 40 crore is also being given to set up charging infrastructure for these electric vehicles. Overall the government plans to add around 390 buses, 370 taxis and 720 three wheelers through this announcement.
The State Transport Units are making huge effort to add EVs in their fleets and the number is expected to increase substantially in the next year.
The bigwigs are investing heavily to get their EV line of vehicles on road and capitalize on the first mover advantage, some of which is expected to fructify in 2018-19.
The future of mobility is electric and India will see a fast adoption of this new energy vehicle in next few years. It is yet to be seen whether the old bigwigs will be dominant players in this space or they will give up this to emerging players or new companies under their fold. Once the momentum picks, the entire eco-system of component manufacturers and trained manpower will come into play, just like it did for after Maruti set shop in India in 1985.
( The writer is a communications strategist)