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E-Mobility: The New Face Of Indian Automotive Sector

India is among the key signatories to Paris Climate Agreement 2016 and would require to reduce carbon emission level by 25% by 2030. The Government of India is promoting electric mobility as one of the key solutions to reduce carbon emission. Presently, India along with the other developing nations is facing one of the biggest problems of the planet i.e. pollution. Cleaning the environment is one of the major challenges the world is facing, which needs to be taken care of, so that upcoming generation can sustain their life smoothly. Average life expectancy of the Indian population has reduced by 1.53 years over the past few decades and the transport sector remains the biggest contributor to this dismal state. To minimize the loss and for better air quality, countries around the globe are transforming their transportation sector, with increased adoption of “Electric Vehicles”. This is trending in the automotive sector and governments around the world are partnering with equipment manufacturers or other government bodies to increase the rate of adoption of e-mobility in their country to reduce the overall CO2 level. In order to reduce carbon emission and high power demand paired with fuel security risk, India has set a target of 15% electric vehicles in five years and a target of 30% EVs by 2030.

To achieve the given target, the government launched FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) in April 2015 to promote the sale of electric vehicles in the Indian market. FAME is a part of the National Electric Mobility Mission Plan with the motive to encourage electric vehicles by providing subsidies. Once the e-mobility becomes successful, it is bound to provide an opportunity that may allow India to save more than 1 gigatonne of carbon emissions between 2017 and 2030of approximately US$60 billion of annual diesel and petrol costs by 2030. Under FAME, more than 156,475 vehicles are sold till date in India. Among different segments 4 wheelers dominated the EVs sold with ~66.3%, followed by 33.6% by 2 wheelers. Under the 4 wheelers segment, approximately 99,000 vehicles sold are Hybrid SUVs and 4000 are EV passengers.

Existing Role of different departments in India:

  • Ministry of Power (MoP): Proposed to fund the procurement of electric vehicles in India with 2030 Vision.
  • Ministry of Heavy Industries & Public Enterprise (MoHI&PE): Currently managing FAME (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles) to give subsidy to users who purchase electric vehicles. The ministry is looking to fund buses to state road transport undertakings on the outright purchase or lease model.
  • Ministry of Urban Development (MoUD): Working on “Green Urban Transport Scheme (GUTP)” to encourage the use of electric vehicles, focusing on buses for cities across the country.
  • Ministry of Road Transport and Highway (MoRTH): Preparing a report on “Move in India” in partnership with World Bank to push state transport undertakings to procure electric buses.
  • Niti Aayog: Released a report to promote a shared, electric and connected mobility future to promote clean, affordable, cost-effective and reliable transportation options. Further, the government has also handed over FAME scheme to Niti Aayog to synchronize all ministries and work as a think-tank.

Current Scenario of e-mobility in India:

Currently, in India, there is low adoption of electric vehicles. However, the increased government initiatives paired with prompt investment from the private and public sector in India is creating a huge growth opportunity for electric vehicle and charging infrastructure in the country. E-Bikes, E-Cycles and E-Taxis, etc. have great growth potential along with passenger electric cars. One such example is Mahindra Electric Mobility Limited, the company has collaborated with OLA to launch 300 EVs in Nagpur and tied up with Zoom Car to sell 200 cars (e2o Plus). To boost the e-mobility, the government has decided to offer a direct subsidy of INR 1.4 lakh for every electric car sold in the country while extending benefits to those purchasing other electric vehicles too. The Electric vehicle is gaining momentum in India all thanks to the ambitious plans and initiatives of the government. In early 2018, the Ministry of Power launched the new National Electric Mobility Program to focus on creating the charging infrastructure and a policy framework to set a target of more than 30% electric vehicles by 2030. Of these, more than 93% were electric three-wheelers and 6% two-wheelers.

Electric Vehicle Annual Sales Volume by Type in India

Sales of electric cars have been stagnant at 2000 units/year for the past 2 years. As of now, around 7 to 10 lakhs three-wheelers running on batteries are sold in the country, which suggests that there is already a significant beginning in terms of utilizing the technology. In addition to the above-mentioned point, the electric vehicle market in India faces numerous challenges for the EV manufacturers and EV charging equipment suppliers. Currently, its key priority is developing all categories of vehicles compliant with BS VI emission norms which are slated to come into effect within the next two years.  This implies upgradation from the present BS IV levels and skipping BS V emission norms altogether. The automotive industry has always been the backbone of the Indian manufacturing sector and is one of the best examples of ‘Make in India’.  This contributes hugely to employment generation and GDP growth of the country. India has started late on the electrification path and therefore will need a strong policy to catch up and move rapidly towards the stated goal of a 100% pure electric technology regime. Taking cognizance of the advancements in electric vehicle technology and global markets developments coupled with the need to reduce energy demand and decarbonization of the auto sector in India, NITI Aayog’s transformative mobility report of 2017 has set out a desirable and ambitious roadmap for pure electric vehicles by 2030 and beyond. Concurrently, the automotive industry under the SIAM umbrella is working out a roadmap for pure electric vehicles. SIAM and its members are fully supportive of this vision of electric mobility and are committed to work in this direction.

Indian EV market and future ahead:

The Indian automobile industry is now gearing up to leapfrog to BS VI norms in an earnest manner and is making strenuous efforts with a lot of investment including harnessing a lot of skilled manpower resources as well as technology. The Government of India has taken various initiatives to accelerate the absorption of the electric vehicle in the system, such as a tender of 10,000 cars is issued and now a major tender for electric buses in 11 cities is likely to be released soon. Indian EV market future lies in a variety of automobiles and not just passenger cars. As a part of the same government, the future of mobility in India is based on 7 Cs: common, connected, convenient, congestion-free, charged, clean and cutting-edge.

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