Naveen Munjal

Managing Director at Hero Eco.

The fastest adoption and conversion of conventional vehicles to that of electric is initially expected to be in the two-wheeler and three-wheeler segments.

India is quickly adopting Electric Vehicles (EV) and in the next couple of decades, it will become more popular than Internal Combustion Engine Vehicles (ICEV). The Indian EV market is projected to grow at a rapid rate of more than 37% annually over the next five years (FY‘18-FY’23). Sniffing an opportunity, automotive manufacturers have already started increasing the allocation of their resources towards research and development of EVs.

Our Government plans to convert the entire fleet of ICE vehicles to that of electric by 2030 through its eco-automotive policy – FAME-II (Faster Adoption and Manufacture of Hybrid and Electric Vehicles).

However, going fully electric is not going to be a cakewalk without the full support of the government, auto consortiums and other concerned authorities. It requires not just the private sector participation but also a massive public awareness program. Some consumers are sitting on the fence due to lack of knowledge about EV as well as myths surrounding its usage. Educating the general public should therefore be the main agenda of our Government as well as that of the manufacturers which could benefit the entire ecosystem.

It’s all win-win

Cost saving, efficiency and comfort have been the major drivers for choosing an EV. The efficiency of BLDC (Brushless Direct Current) motors that are used in EVs is about 70% as compared to a lower 25% for that of ICE motor. Add to that the zero emissions and elimination of technical issues like knocking and ignition lag; EVs are a complete package to vouch for. Moreover, poor traffic conditions in our country make EVs the ideal candidate. The owners feel a sense of pride in their eco-friendly choice of travel.

Moreover, going fully electric has the potential to save $370-445* billion by 2030 for the exchequer in the form of lower import of crude oil.

*Calculated from the given data

Economics v/s efficiency

However, there are some challenges. An average cost of a new car in the US and Europe is around $35,000. In India, it is much lower at about $8,000, thereby making the conversion to electric much more difficult. Mass conversion to EVs in India is expected when the battery prices drop substantially, thereby, making them more pocket-friendly rather than just being cost efficient.

The cost of lithium-ion batteries have gone down from $1000/kWh in 2010 to $225/k- Wh in 2018 – thanks to proliferation of EVs. It continues to drop substantially year on year.

Big trigger

By 2022-23, the balance of price-performance equation is expected to shift in favour of lithium-ion batteries, thereby making mass adoption of EVs a reality around the world.

The decrease in battery prices as well as the emergence of tech start-ups in the field of manufacturing and rentals have given a big boost to the automobile industry. Tech players like Ola and Uber are already planning to venture into the EV rental space. Startups in the field of car rental services are aggressively exploring fleet ownership, especially in the crowded cities.

The first movers

India is the world’s third largest market for automobiles; it sold about 25 million ICE vehicles in 2017. Of these, more than 80 per cent (about 20 million) were two-wheelers. The two-wheeler segment is expected to lead the EV market in India followed by that of public transport; the latter is getting a major push from the Government. The fastest adoption and conversion from ICE to electric is initially expected to be in the two-wheeler and three-wheeler segments.

The primary focus of EV manufacturers over the next 5 years is to widen the range of products on offer while giving a good value-for-money proposition to consumers. They are already in the process of developing a high-speed electric scooter as well as an electric motorcycle prototype at pocket- friendly prices.

Moreover, going fully electric has the potential to save $ 370-445* billion by 2030 for the exchequer in the form of lower import of crude oil.

Stable policy

Moreover, the emergence of 8-10 KVA lithium- ion batteries which shall be light weight, efficient as well as powerful is going to revolutionise the EV space in the future. Adoption of solar-powered charging stations will become rampant as private players jump on to the EV bandwagon. However, it calls for a single coherent long-term policy that would lay out a roadmap for building a robust EV ecosystem revolving around charging stations, manufacturers and consumer incentives. Are the policy makers listening?

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