Future is electric: How India Inc should support the EV ecosystem?
Climate change is a global issue, and sustainability has emerged as a viable solution for a secure future. Governments are getting accustomed to establishing global sustainable pathways. Climate change goals are being integrated into industry and society to reflect accountability for a more environmentally conscious world. Emerging technologies and breakthrough innovations are enabling this journey toward a clean, green, and sustainable future. Electric vehicles (EVs) are emerging as a breakthrough sustainable solution, and India has identified EV adoption on a large scale as critical to meeting its climate change goals.
India's EV Opportunity
Our country is on track to meet the commitments made, under the Paris Agreement in 2015, making it the only G20 country to do the same. India's success in meeting its 2030 climate goals will hinge on a more concerted effort to generate clean energy and reduce greenhouse gas emissions. With India's annual fuel import bill approaching Rs 6,000 crore, reducing oil consumption is not a green imperative but has a significant economic goal. Vehicle emissions account for nearly a third of all pollution in cities.
A significant reduction in fossil fuel consumption would save the Indian economy billions of dollars while also ensuring a clean, green future. Electric vehicles will be at the forefront of the emission-free era, cutting pollution by one-third and reducing oil imports by nearly 20%.
Electric mobility, with its inherent benefits, will be the country's future mode of transportation. Manufacturers are already adopting new technologies and developing new capabilities to usher in the electric era, recognising its enormous potential.
Onus on industry
The responsibility is now to drive the EV transformation for automotive enterprises and industry stakeholders. India, the largest two-wheelers market in the world with five four-wheelers, has a leading role to play in developing and implementing new mobility solutions in the global automotive market. The need of the hour to be a hub of innovation in emission-free mobility is now a centre for new products and low-cost manufacturing. It is not a challenge to go electric but to make it more environmentally friendly, ensuring that energy used to charge EV batteries only comes from renewable sources instead of shifting the emission burden from the vehicle to the grid supplying power station.
Corporate India can play a significant role in facilitating and promoting the transition to environmentally friendly EVs. For example, the Godrej Group plans to encourage employees to switch to electric vehicles. Although these efforts are comparatively limited compared with the enormity of the climate challenge, these steps can increasingly generate the critical mass required to make EVs more popular and encourage their adoption if emulated by other companies.
Strategies India Inc needs to spearhead the EV revolution:
Customer education to dispel myths (Fear, Uncertainty and Doubt)
To highlight the benefits of EVs, the government and all other stakeholders (specifical manufacturers) should use every available promotional and advertising platform. Coverage, EV technology evangelism, and informational campaigns in various media, particularly television, online, and print, can have a remarkable impact. Outdoor advertising and educational workshops are both effective methods. In addition to the benefits of anti-pollution and cost-efficiency, these promotions dispel myths about EV usage, such as battery longevity.
Benefits for manufacturers of ancillary products
The Indian EV ecosystem is in its infancy. Ancillary product manufacturers (who are still in the minority) are winding down. This critical component of the EV ecosystem requires all available government assistance. Reduced import and customs duties, as well as incentives for ancillary players to establish manufacturing units, will go a long way toward addressing this issue. Government-sponsored special manufacturing zones are an excellent option for establishing units for various EV ancillary players. State governments can be directly involved in the manufacturing of electric vehicles. Kerala's government is a trailblazer, recently partnering with a Swiss electric bus manufacturer.
Pilot EV corridors across National Highways
The first EV highway corridors in India—the Delhi-Jaipur and Delhi-Agra routes—are already in the works. With 18 charging stations, it is expected to be operational by March 2020. Similar corridors near major cities across the National Highway must be established to propel these EV infrastructure initiatives forward. The cost of these pilot projects can be reduced by purchasing in bulk and centralising the procurement of necessary equipment.
The way forward:
Although the government's policy framework will contribute considerably to promoting EV systems in the country, its implementation would depend on various factors – the cost of the vehicle, the distance covered by one fee, and notably, the accessibility of charging infrastructure. Because India is a nascent EV market with limited charging capabilities, its increased adoption will require forming a huge public charging network around the country. A 2013 McKinsey report estimates that India has required an investment of approximately $6 billion for the vast five million public charging points.
Along with establishing charging infrastructure, there is a need to upgrade the existing electricity supply infrastructure to make it EV-ready. Because the increased power demand will put down a strain on the grid, particularly in areas with a high concentration of EVs. As India seeks solutions to infrastructure bottlenecks, it must also consider ways to address financing issues such as limited financing options, high-interest rates, high insurance costs, and limited loan opportunities for EV customers. Furthermore, with batteries accounting for a sizable portion of EV costs, India may be wise to invest in research into alternative battery technologies based on different metals. Aluminium, sodium, and zinc-based batteries are gaining traction as viable alternatives to lithium-ion batteries.
India has gotten off to a good start in terms of EV adoption. Tailor-made policy initiatives, rapid implementation, and industry-friendly regulation will be required to ensure that EVs become a mainstream transportation option in the country.
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