Future of Electric Vehicles in India

“Much of the great work of the world has been done against seeming impossibilities. The thing is to get the work done” –Dale Carnegie

What Manufacturers have to say about the market?

When FAME (Faster Adoption and Manufacturing of Electric Vehicles) phase 1 was launched in 2015 manufacturers were appreciating the initiative as it was a much-needed move from the Government to boost the sales and market of EVs (Electric Vehicles) in India. The incentives were promoting sales of EVs and around 2.78 lakh of xEV were benefited from this. While in FAME 2 the incentive criteria were made stringent and sales data demonstrate clearly that it is not promoting EV as it was expected from it.

In India 2-wheeler demand is much more higher than other categories

 

SMEV (Society of Manufacturers of Electric Vehicles) Director-General Mr Sohinder gill said: “The FAME 2 scheme had some good points and laudable objectives but came up with so many strings attached. Most of them introduced prematurely or unnecessarily, which led to the achievement of only 4 percent of the stated target. The scheme could not attract customers to shift from the polluting petrol bikes to E2Ws (2 wheeler EV), mainly because the preconditions and qualification criteria of FAME 2 made the bikes unaffordable to the mass market customer despite the subsidy,”

FAME 2 launch and performance analysis   

EV market in India with comparison to subsidised vs non-subsidised EVs

FAME 2 was launched on 1^st April, 2019 budget is INR 10,000 crore for 3 years till 2022. FAME 2 was launched with takeaways from FAME 1 as there was no catch-up plan for meeting targets after a fall. FAME 2 has a target to subsidize 1 million high-speed E2Ws, 55000 E4Ws, and 7000 electric buses. Also, the Government has earmarked 1000 crore for the erection of 2700 charging stations in tier 1 cities along with the charging stations installation on major highways connecting them. Out of 52,959 high-speed bikes sold since January 2019, only 31,813were given subsidy under FAME 2, as the rest did not qualify for the same. The reason for disqualification from the incentive range is that most of the E2W sold in markets have lead-acid batteries, the cost of the battery in an EV comprises 40%-50% of the total cost of the EV, and lithium-ion batteries are mostly imported from China. So the price of the EV rises. Also, E2Ws saw sales of 25,735 units in calendar 2020, against 27,224 units in 2019.

Are Consumers really aware?

    In India 2 wheeler EVs are a secondary choice for a family. People usually go for E2W (2-wheeler EV) mainly for facilitating seldom need for vehicles for carrying out odd jobs at home. The environmental benefits of EV is known to the customers.  As data states, 14 out of 20 most polluted cities of the world are in India alone, 36% of NOx emission is due to vehicles, and 20% PM2.5 emission in Delhi is due to vehicles. Facts like EVs are 4 times energy efficient as compared to IC Engines and have 50 times fewer moving parts as compared to IC engine vehicles, are less popular. IC Engine efficiency is about 22-23 % while an EV is 90% efficient. Apart from wiper, blades, and tires, all Electric vehicles require little maintenance, saving more consumer money over the life of the car. Even the brake pads last longer in EVs because they use regenerative braking (Electrical braking) to reduce the speed of the car and utilize the generated energy (from braking) to charge the battery at the same time.

 

 What are the Obstacles in switching to EV?

Majority of the Indian car  buyer (petrol/diesel) are in the range of 5-10 lacs 

 As in above shown graph we can see that Indian market of 4-wheelers have majority of the buyers fall in the range of 5-10 lacs. While,The total cost of ownership is quite high for an electric vehicle as compared to an IC engine vehicle. The main reason is the cost of the battery. The battery pack of EVs accounts for 40-50% of the total cost of the EV. Battery pack cost this much as they are mostly imported from China. If we observe the trend of the battery cost, we will observe that as the battery density improves i.e. watt-hour/ kg (Wh/kg) and motor-controller efficiency improves i.e. watt-hour/km (Wh/km), battery price decreases, and the volume of the battery pack also goes down. So, batteries are innovating rapidly, right now it’s around 310 Wh/kg from 80Wh/kg in 2011. Also, some big players are investing in lithium purification plants, so the day is not far when Li-ion batteries will start manufacturing in India itself and so the cost of the battery pack will go down further. To promote the sales of EVs in Delhi, Delhi Government has announced incentives for EV customers. Also, they are going to replace all Government vehicles with EVs within 6 months.

As the battery density improves, batter cost and battery volume also decreases

Are we ready for the electrifying future?

Well, there arise some questions that need to be addressed:

1)     1) How the revenue that is being collected from petrol and diesel, will be compensated?

               Let us imagine a scenario where all the vehicles in India are replaced with EVs. Now there will be no need for petrol and diesel as fuel for any vehicle, as all will be running on batteries. All we will need that time is power or electricity to charge that battery. Right now approximate cost of a unit (or 1 kWh) in India is around 8 rupees. Government has to raise the price of electricity to charge EV to compensate for the sum that was generating from petrol and diesel, isn’t it? Again a question arises that will government increase the per-unit cost (whole tariff system) for all the residential, commercial and industrial also? Some firms like OLA future factory have announced a fully solar-based electricity generated plant. In that case also no revenue might be generated from residential, industrial solar-based sources.  So are we prepared for the same?

2)     2) Do we need to invest so much in charging stations for EVs?

     Again imagine the same scenario that all the vehicles are EV in India. Now most of them will be used in the day and will be put on charge at night. As per the FAME 2 plan, the Government is going to set up a charging station in a 3kmX3km radius and at an interval of 25 km on highways by 2022. But will it be sufficient even today for all the EVs to get charged?

      Let’s take an example to illustrate this, Priya is a working girl who lives in Khargone (130 km from Indore), she wishes to buy a 2-wheeler for her daily commute within the city. She has 2 options available in the market; she could go for E2W or IC engine 2-wheeler. E2W available in the market has a range of 80 km only, but since she has to go to Indore (130 km from Khargone) once in a while. So she chooses IC engine 2-wheeler over E2W. This is the most common issue that arises with Indian consumers. If there were some arrangements for changing the discharged battery just in the same time that it takes to fuel up an IC engine vehicle, then she might have preferred E2W over the IC Engine.  Also, most of the EVs are expected to be charged at night, SO do we have such charging infrastructure to feed such numbers of vehicles?  this issue also needs to be addressed, isn’t it?

     One way we can handle this issue is by arranging community-level charging stations for ourselves, like in society parking lots can be equipped with charging points at every parking spot. But still, it will take 5-10 hours for an EV to get fully charged and 1-hour minimum even with boost/fast charging. Instead of putting all of our effort into setting up charging stations, we can just standardize our battery design. Now the question is how standardizing battery design will solve the problem?

    Battery in EV available in markets has different capacity and lifetime. Tata Nexon EV is equipped with a 30.2 kWh battery, Mahindra e2o plus has 15 kWh battery while MG GS 44.5 kWh battery. We have to first work on the design of the EV and make it such that it became easy to pull out an EV battery pack and insert a new one easily. This will eliminate the major problem of 5-10 hour waiting time for charging. While privately-owned companies can provide on-site battery change or emergency battery change services. Just like today’s phone battery, we can replace and insert a new one. We can have 3-4 variants of size for different types of cars like sedan, hatchback, van, sports cars etc. In less than 15 minutes it will be possible to replace the discharged battery with charged ones. After battery life is over either they can discard or send those batteries to refurbish.

     Standardizing battery packs today for E2Ws, E3Ws, E4Ws, Busses, and Trucks will save a lot of time and effort late. Sooner or later we have to do that just like the introduction of a C-type charger, we have to standardize battery packs, charging ports etc. It is going to be difficult but in the future, there will be a need for standard battery packs and a consortium will be there for standards, just like other electronic types of equipment. This battery change system will be the future of EV and this will work just in same time as we spend in petrol pump queue.