Electric Mobility: Government Accelerates Its Efforts

Technology

The seemingly high tech electric vehicles were surprisingly first invented more than a hundred years ago. As with many early inventions it is hard to accord its origin to a single inventor, but the English electrical engineer Thomas Parker is said to have invented the first practical e-vehicle in the year 1884. There was a brief spark of interest in electrical vehicles in the late 19th and early 20th century, with Thomas Edison attempting to build a better e-vehicle battery, but interest soon waned with the introduction of the cost-effective and practical, gasoline powered Ford Model T in 1908 (energy.gov 2014) .

It would take more than a century for mainstream interest to regenerate in e-vehicles. Toyota’s introduction of the Prius Hybrid model was hailed as the first attempt to mass produce an eco friendly vehicle first in Japan in 1999 and worldwide in 2000 eventually. However, it was when Tesla, a small Silicon Valley startup started producing a luxury ele ctric sports car that could go more than 200 miles on a single charge in 2008, a massive surge of interest in electrical vehicles was sparked and leading automotive companies like Ford, General Motors, Volkswagen and Hyundai started sprucing up their efforts to develop electrical vehicles in various segments. Mahindra and Tata, the two Indian auto giants also entered the electric segment eventually  with the launch of  Mahindra e20 and Tata Nexon in 2011 and 2019 respectively.

Current Scenario: Encouraging Trends

Environmentally conscientious consumers and governments looking for more sustainable and greener alternatives have found value in using electric vehicles. The transportation industry is one of the leading contributors of greenhouse emissions and electric vehicles seemed to be the most logical and sustainable alternative. There are   major Electric Vehicle (EV) variants: Battery Electric Vehicles or BEVs which are battery operated, fully electric and chargeable.   finally the oldest generation of Hybrid Electric Vehicles or HEVs which generate power from internal combustion engines and electric power is produced only from regenerative braking and cannot be externally charged from a plug point.


Figure 1: Data from a McKinsey Report from 2018 showing worldwide growth of the EV sector over time. The share of EV vehicles sold with respect to the total auto sales is seeing a steady growth since 2010 when it was virtually nonexistent to 1.3 per cent in 2017 (
Hertzke et al. 2018).


Figure 2: Norway is leading the world in the electrification of mobility with over 49 per cent of all new car sales being electric. The graph shows the top 15 countries with the highest new EV sales (Phillips 2019).

There are now promising signs that the electric vehicle sector is on a growth trajectory. In 2018, the worldwide electric car fleet exceeded 5.1 million units, up by 2 million from the previous year (IEA 2019).

China is the world leader in the manufacture and consumption of EVs, accounting for more than 45 per cent of global EV sales globally. China also makes more than 50 per cent of total lithium-ion batteries, the type used to power the EVs. This dominant position is the result of the Chinese government’s sustained backing and investment of nearly 60 billion USD in the last decade towards developing EVs. Investment by Chinese government in the sector is unparalleled by even large and developed economies (CP 2020). Tesla has established its major Giga Factory with  a production capacity of 250,000  EV units in Shanghai–testament to China’s technical prowess in the sector.

India had 230 million registered motor vehicles in the year 2016 with more than 60,000 petrol and diesel refuelling stations . The annual vehicle production is around 30 million units, of which EVs sales accounted for about 700,000 units in the year 2018, a market share of about 2.3 per cent. India currently does not have any facility to produce lithium-ion batteries  CPCBAA 2020 .

Indian Government: Enthusiastic Enabler

Prakash Javadekar, India’s environment minister uses an EV-Hyundai Kona for his travels, bearing a green number plate, which is to be allotted to all EVs in the country. This is more than a symbolic gesture; it underscores the present government’s interest in the shift from the traditional to the eco-friendly.

The introduction of the National Electric Mobility Mission Plan (NEMMP) 2020, outlining the vision and the roadmap for the faster adoption of electric vehicles and their manufacturing in the country is a recent example of the government’s concerted push for greater adoption of EVs. A scheme, Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME), 2015 was formulated and has been brought under the purview of the NEMMP, 2020. In the first phase of the scheme, which lasted until March 31, 2020, about 2,78,000 EVs were supported through incentives of INR 30.5 million. In addition 465 buses for intra-city, inter-state and last-mile connectivity were sanctioned to different cities and states (CPCBAA 2020).

The second phase of the scheme, FAME II will introduce a slew of incentives for the EV sector. The government plans offer direct subsidies of INR 20,000 per KW for electric buses and INR 10,000 per KW for other EVs. A total of INR 8,596 billion has already been sanctioned and an additional INR 1000 billion has been allotted for setting up a nationwide charging station network (Ghosh 2019).

Electric buses are a major thrust area for the government under the FAME II scheme. The centre plans to incentivize the purchase of 7,090 electric buses with an outlay of INR 3,545 billion. These buses are to run about 4 billion km during the five year contract period  awarded to the bidders and are expected to save cumulatively about 1.2 billion litres of fuel over the contract period, which will result in the avoidance of 2.6 million tonnes of CO2 emission. Tata Motors and a joint venture between Hyderabad based Olectra motors and Chinese manufacturer BYD have won the majority of the contracts for the manufacture and supply of these buses. The models manufactured by TATA are of the Hybrid Type but the ones manufactured by Olectra-BYD are fully electric. A 32 seater TATA Starbus 9/12 EV is priced in the range of INR 12 to 14 million while a 31 seater eBUZZ K9 model from Olectra-BYD costs between  INR 20 to 30 million (CPCBAA 2020).

The government realises that a network of charging stations is the backbone for a robust EV vehicle market and has taken steps to establish a country wide chain of such charging stations. A total of 2636 charging stations will be constructed under FAME II out of which 1633 will be fast charging stations and 1003 will be regular charging stations. About 14,000 chargers will be installed in the selected 62 cities. State-owned Rajasthan Electronics & Instruments Ltd (REIL) and Energy Efficiency Services Ltd (EESL) have been awarded a significant chunk of orders for setting up more than 2,500 e-vehicle charging stations. No private player has qualified for this tender (The Economic Times 2020).

The Two and Three Wheeler Segment

The NITI Aayog, an advisory wing of the Indian government has been considering a policy proposal to ban all Internal Combustion Engine (ICE) two wheelers under 150cc by year 2025 and all three wheelers to be electric by 2023.

The three wheeler e-rickshaw or ‘Tuk-Tuk’ has been successfully adopted as the alternative to the ICE powered auto rickshaws in major cities as well as Tier 2 and Tier 3 towns. Most of the e-rickshaws manufacturers in the country claim to be manufacturing the vehicle but are merely importing parts from China and assembling them here. The segment has been growing annually at a rate of 20 per cent but most of the sales are part of the unorganised sector. The price range of a battery operated e-rickshaw

The EV as a Personal Vehicle

The EV revolution was started by the hype around personal vehicles. So, this segment remains a critical component in the adoption of E-mobility nationally. Though there has been a rise in consumer interest among the consumers for electric cars, there remains a number of challenges in the adoption of personal EVs in India in the near future. These include inadequate charging infrastructure, weak battery performance and durability, the supply-demand gap and affordability for mass adoption. Auto companies have launched some affordable as well as high end options. Entry level models like  Mahindra e2o Plus, TATA Tigor EV range from INR 6,00,000 to INR 1 million. Mid level models like the Mahindra EVerito sedan or the TATA Nexon EV range from INR 1.3 to 1.8 million. High end models like the Hyundai Kona, the one used by the Indian Environment Minister cost about INR 2.3 to 3 million.

The Case for EV Sustainability: Independence from the Power Grid

Electric Vehicles are often portrayed as the green, sustainable alternative to the environmentally degenerating fuel powered  vehicles but it is not always so. There is a big catch in the whole EV  charging station ecosystem. If charging stations are powered  by the traditional power grids, it will, in effect, be dependent on power from fossil fuels and not truly sustainable. Generation of 1 kilowatt (KW) of energy from coal releases about 1 Kilogram of Carbon into the atmosphere. An electric car can run about 10 Kilometers on 1KW of charge on average, thereby contributing 100 grams of  carbon per kilometer, which is about half of what traditional fuel driven cars contribute but not insignificant. The charging  stations need to be powered from renewable sources of energy to make the EVs truly carbon neutral. (Pillai and Ahuja 2016)

Major Roadblocks

The lack of indigenous battery manufacturers along with a lack of charging stations is seen as one of the biggest barriers to wide scale EV adoption. The cost of maintenance of the EV batteries need to be comparable or even lower than the cost of Internal Combustion Engine (ICE ) vehicles to interest the consumer as the Indian consumer is price sensitive. The battery is the most expensive component in an EV at about 30 per cent of the vehicle cost. The expected life of currently available batteries is only 2-3 years, which is a major deterrent for consumers.

Way Forward

The Government has shown initiative on its part to promote the adoption of EVs on a national scale. However, fundamental infrastructural challenges stand in the way. These problems need to be approached with a long term perspective. There have been encouraging signs all around with the set up of charging stations in the larger, metropolitan cities but it needs to trickle down to the Tier 2 and Tier 3 cities as well. There also needs to be a standardisation of the EV charging technology to remove any glitches from the ecosystem. Greater attention needs to be paid to the setting up of lithium-ion battery manufacturing facilities in India. However, we need to ensure that sustainable practices are followed in the manufacture of the EVs and the batteries to further reduce their carbon footprint. Plus, a closed loop, eco friendly circular disposal   system needs to be devised for the critical battery component. The Government has handholded the sector and will continue to do so but now the time has come that it took the first baby steps on its own.

References:

  1. Energy. gov. 2014. The History of The Electric Car. Available at: https://www.energy.gov/articles/history-electric-car. Accessed on April 15, 2020.
  2. International Energy Agency (IEA). 2019. Global EV Outlook 2019: International Energy Agency, Paris: France. Available at: https://www.iea.org/reports/global-ev-outlook-2019
  3. Central Pollution Control Board Alumni Association (CPCBAA). 2020. India’s E-Journey, EnviroNurture, 1(1): 1-41. Available at: http://www.iaapc.in/CPCBAlumni%20Asso%20Enviro-Nurture%20Newsletter%20March%202020.pdf
  4.  Ghosh M. 2019. How FAME 2 Scheme Aims to Promote The Use of Electric Vehicles in India, Livemint, March 12. Available at : https://www.livemint.com/auto-news/how-fame-2-scheme-aims-to-promote-the-use-of-electric-vehicles-in-india-1552352972259.html
  5.  The Economic Times. 2020. Government approves 2,636 new charging stations in 62 cities: Prakash Javadekar. January 3. Available at: https://economictimes.indiatimes.com/industry/auto/auto-news/government-approves-2636-new-charging-stations-in-62-cities-prakash-javadekar/articleshow/73083792.cms?from=mdr
  6.  Hertzke P., N. Muller, S. Schenk and T. Wu. 2018. The Global Electric-Vehicle Market is Amped Up and On The Rise, McKinsey & Company. Available at: https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/the-global-electric-vehicle-market-is-amped-up-and-on-the-rise
  7. Phillips I. 2019. Top 18 Electric Car Countries in 2020, avtowow, December 15. Available at: https://avtowow.com/countries-by-electric-car-use
  8. Pillai R. K. and A. Ahuja. 2016. Electric Vehicles as A Sustainable Solution to Air Pollution In Delhi, Geography and You, December 22. Available at : https://www.geographyandyou.com/electric-vehicles-as-a-sustainable-solution-to-air-pollution-in-delhi/

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