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In­cen­tives, in­fra­struc­ture, end-user aware­ness key for EV growth in In­dia

Gov­ern­ment sub­si­dies, elec­tric ve­hi­cle in­fra­struc­ture, and cus­tomer at­ti­tude are es­sen­tial for the largescale pow­er­train elec­tri­fi­ca­tion in In­dia. Elec­tric ve­hi­cles (EV) would not just re­main con­cept ve­hi­cles any­more since in­creas­ing num­ber of gov­ern­ments, car man­u­fac­tur­ers and pub­lic are tak­ing keen in­ter­est in this seg­ment, Kaushik Mad­ha­van, Di­rec­tor, Mo­bil­ity (Au­to­mo­tive & Trans­porta­tion) Prac­tice, Frost & Sul­li­van, said.

The avail­abil­ity of in­cen­tives and sub­si­dies, sig­nif­i­cant in­vest­ment by orig­i­nal equip­ment man­u­fac­tur­ers, new en­trants, and lower bat­tery prices are fac­tors pro­pel­ling the dou­ble-digit growth of the global EV mar­ket. It grew over 15 times at a re­mark­able com­pound an­nual growth rate (CAGR) of 72.1% from 2011 to 2017.

“EV sales have dou­bled since 2015. In com­par­i­son, hy­brid cars took 15 years since launch to reach the 1 mil­lion mark,” Mad­ha­van, said. He made these re­marks at the re­cently-con­ducted Growth In­no­va­tion Lead­er­ship (GIL) Coun­cil, a Frost & Sul­li­van Pro­fes­sional De­vel­op­ment Com­mu­nity, Break­fast Ses­sion held with a few in­dus­try lead­ers from com­pa­nies like Ashok Leyland, Lu­cas TVS Ltd, Mahin­dra & Mahin­dra, TAFE, Rane Brake Lin­ing Ltd., Daim­ler etc. The ses­sion dis­cussed the EV ecosys­tem glob­ally and in In­dia, and the avail­able op­por­tu­ni­ties in this seg­ment.

Frost & Sul­li­van es­ti­mates that over 21 mil­lion xEV (core elec­tric plus hy­brid ve­hi­cle) will be sold glob­ally by 2025, ac­count­ing for ap­prox­i­mately 21% of the to­tal pas­sen­ger ve­hi­cle mar­ket. The trend is mov­ing to­ward bat­tery ca­pac­i­ties over 60kWh to in­crease the range of an elec­tric ve­hi­cle up to 200 miles on a sin­gle charge.

Although the Gov­ern­ment of In­dia is not too keen on sub­si­dies for EV, it should con­tinue fo­cus­ing on pro­mot­ing re­new­able en­ergy ini­tia­tives apart from in­cen­tiviz­ing set­ting up of lo­cal man­u­fac­tur­ing fa­cil­i­ties for EV com­po­nents such as bat­ter­ies, elec­tric mo­tors and other pe­riph­er­als. Fis­cal and non-fis­cal in­cen­tives have helped in­crease EV pen­e­tra­tion in many coun­tries like Nor­way and Nether­lands. One of the key en­ablers for EV is pres­ence of charg­ing sta­tions. Man­u­fac­tur­ers, util­ity com­pa­nies, charg­ing sta­tion man­u­fac­tur­ers and OEMs need to work to­gether to in­crease the num­ber of pub­licly avail­able charg­ing sta­tions to im­prove the EV adop­tion rate in the coun­try.

More than in­cen­tives, charg­ing in­fra­struc­ture etc., end-user aware­ness, at­ti­tude and will­ing­ness to pay for EV is go­ing to de­fine the fu­ture of this seg­ment in the coun­try. To­day cus­tomer at­ti­tude to­ward all forms of EV is char­ac­ter­ized by ig­no­rance and pre-con­ceived no­tions and in some cases plain old prej­u­dice. There is a con­sid­er­able dif­fer­ence be­tween cus­tomer un­der­stand­ing about cer­tain tech­nolo­gies and qual­ity of aware­ness. While about 75% of the cus­tomers are aware of Mild Hy­brid ve­hi­cles ma­jor­ity of the cus­tomers are only slightly/ some­what aware of EV. More than 60% cus­tomers wanted a min­i­mum 150 km range from EV; this num­ber is even higher when it comes to cus­tomers from Tier 2 cities whose av­er­age driv­ing dis­tances are longer than Tier 1 cus­tomers. The dis­con­nect is stark when it comes to will­ing­ness to pay and the per­ceived use of EV.

Almost 40% cus­tomers want EV to be priced be­low the price of the cur­rent ve­hi­cles they use. Of those cus­tomers will­ing to pay more, only 15% are will­ing to pay more than 30% of the price of the cur­rent ve­hi­cle. In­fras­truc­tur­ere­lated chal­lenges are the main rea­sons for cus­tomers want­ing to pay lower for an EV than their cur­rently-owned ve­hi­cles.

Two-and three-wheel­ers

About 80% of panel mem­bers at the GIL Coun­cil Break­fast Ses­sion agreed that elec­tri­fi­ca­tion of ma­jor­ity of the ve­hi­cles would first oc­cur in 2 and 3-wheel­ers that are used com­mer­cially, be­fore trick­ling into fixed dis­tance op­er­at­ing com­mer­cial ve­hi­cles and pas­sen­ger ve­hi­cles on a much larger scale.

Given the di­chotomy be­tween cus­tomer ex­pec­ta­tions, gov­ern­ment goals and OEM plans, the so­lu­tion to In­dia’s Elec­tric Mo­bil­ity co­nun­drum lies be­tween in­ter­nal com­bus­tion en­gine ve­hi­cles and fully elec­tric ve­hi­cles at least to start the elec­tri­fi­ca­tion jour­ney. In In­dia’s case, a per­fect so­lu­tion (EV) should not be­come the en­emy of the work­able so­lu­tion (Hy­brids).

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