CLEA(NE)R ROADMAP
The Indian automotive industry has much to look forward in the both domestic and export markets for greener vehicles and alternative mobility. There are also challenges ahead of these opportunities, and to capitalise on them, the industry has to develop or acquire technologies and capabilities to produce vehicles that meet the future market needs. The government has much to do to encourage the development of greener vehicles, while also enforcing compliance to the existing environmental norms. The promotion of electric motorcycles will have significant impact on the market, as they have the major share in the two-wheeler sales in India.
In a price-conscious economy like India, the shift towards greener vehicles will be slow unless spurred by government mandates supported by infrastructure facilities and fiscal incentives. Although the major players are equipped with the necessary capabilities to develop cleaner vehicles, the necessary infrastructure, such as recharge stations, is not yet in place for their widespread adoption.
With the conventional automobiles, the Indian industry is facing many challenges. In April 2017 it had to migrate to BS-IV and by April 2020 it has to move to BS-VI and revamp the in-vehicle safety systems. Now the automotive industry is given the target of all electric cars by 2030.
If the industry follows the right strategy it can succeed in the Indian market. Battery powered/plug-in hybrid electric vehicles continue their steady growth worldwide. In India, electric vehicles have begun making some inroads into the market and most of the OEMs are working on EVs as electrification is the only viable solution to reduce the reliance on oil. The demand for EVs has been growing mainly owing to customer awareness and perceived economic benefits like lower running costs and less taxes.
The Managing Director of a leading OEM told me that instead of working on BS-VI, he prefered to go for electric vehicles since the cost of BS-VI and electric vehicles would be almost similar, if we have higher localisation. The major cost of the electric vehicle comes from the battery and battery management system.
A lot of companies are working on localisation of the battery to reduce the cost. If they succeed in this, electric mobility will be the next boom in the Indian automotive market. The government should also step in to facilitate and promote this boom. If this is going to happen, the dream of all electric vehicles by 2030 will be real.