India is one of the top ten automotive markets in the world. Escalating crude oil prices, increasing environmental concerns and a persistent demand to reduce fuel import bill have created the space for alternative technologies in automobiles such as electric vehicles (EV) in India.
Lower running cost and attractive subsidies from government are other reasons that push electric and hybrid vehicles adoption in India.
The Indian market for EVs is at an early stage of development with 1,500 cars on road as of 2013. Merely 1 percent of two-wheeler market in India is run by EV technology, and electric car market constitutes only 2-3 percent of the entire Indian car market.
The 2-wheeler market has experienced the largest increase over the past few years, with 2/3 of the market share and approx. 400,000 on road.
In 2012, government unveiled the road map for electric and hybrid vehicles development in the country. During 2012-17, the government has proposed to set up Rs 740 crore R&D fund for EVs in the 12th five year plan.
In recent years, the Government has adapted a number of policies to promote the use of electric vehicles.
The National Council for Electric Mobility (NCEM) was set up to devise an all-inclusive policy for EV promotion.
Government launched a 3.5 Billion plan with stakeholders to increase EVs and hybrids production and build charging points with the target of 6 million vehicles by 2020.
MNRE has offered a 20 percent subsidy on purchase of EVs with a subsidy of Rs 4,000-5,000 on two-wheelers and of Rs 1 lakh on cars.
Duty exemptions for imported batteries and hybrid vehicle parts have been included in new budget.
The WAVE, a road-trip of electric vehicles, covering over 2500 Kilometers of southern India was introduced.
The Green rickshaws in New Delhi, a range of Tata Starbus and hybrid CNG low-floor buses are other such green auto initiatives undertaken by the state government in Delhi.
In another initiative, BYD has introduced their first electric bus in Bangalore. The bus, on a single night-time charge achieves up to 24 hours of service.
Moreover, the government is planning four smart cities to be built along the Dedicated Freight Corridor, in association with Japanese firms like Hitachi, Mitsubishi and Toshiba. The project heavily focuses on promoting EV usage.
However, the green auto market in India faces innumerable challenges.
The general issues linked to EV market in India are lack of infrastructure, charge time of batteries and range anxiety. Other barriers include unreliable grid and frequent power outages, lower consumer confidence in PEVs, vehicles cost, competition with other alternative energies like CNG, cheaper local technologies for batteries and spare parts and rare availability of key components like electronics and controls.
Other key challenges to be mentioned are high initial installation cost, high rate of VAT, inadequate government Initiatives and lack of optimum business models.
At present, 4 percent excise duty is levied on EV production while components incur 10percent of taxes. Imported EVs are charged 14 percent duty.
Mahindra Reva is one of the established manufacturers in the electric car space in India. Till 2011, it had total 5,000 car sales with 50 percent in domestic sector. The only seller of passenger hybrid cars is Toyota Kirloskar. Lohia Auto manufactures electric 3-wheelers, while Hero Electric and Electrotherm produce two-wheeler EVs.
Recently, as part of a major investment in EV sector, Mahindra & Mahindra (M&M) inaugurated a factory and a research center for electric two-wheelers in Michigan, US, with an initial capacity to produce 9,000 vehicles annually and the plant will assemble its first electric two-wheeler later this year.
Given the Indian economy’s major dependence on imported fossil-fuels, EVs can be a viable option for facilitating a smooth transition from conventional to battery powered vehicles. However, they need to be customized to be affordable and convenient as the conventional cars.
Hybrids and plug-in hybrids may be a good solution as they do not require as much charging infrastructure.
Besides, India EV market has huge potential especially in urban areas thanks to an established auto component infrastructure, low manufacturing and R&D costs, mechanical hardware availability, high urban congestion and the presence of a large domestic market.
For EV implementations to improve, central government should implement steps to improve EV charging infrastructure. International market players can make case studies on potential locations and adequate quantity of Electric Vehicle Supply Equipment (EVSE).
In a recent development, the government has announced National Electric Mobility Mission Plan (NEMMP) 2020, which will provide incentives up to Rs 14,000 crore for electric vehicle technology promotion.
The Mission projects a potential for 6-7 million units of new EV sales, along with a fuel savings of 2.2-2.5 million tons by 2020.This Plan aims demand incentive scheme for faster EV adoption.
Three lakh electric vehicles on the roads by 2020 will reduce 16 lakh metric tons of pollution and savings of over Rs 3,700 crore, according to government officials.
To attain a sustainable energy position India needs to advance with considerable support from government, active industry participation and extensive research and development activities.
Sabeena Wahid