EV Market in India
The Indian automobile industry is currently the fifth largest in the world and is expected to overtake China's by 2030 to become the third-largest. With a population of more than 1.30 billion, India's mobility needs are expected to change drastically in the near future. In the years ahead, the current infrastructure and forms of transportation won't cut it. The Government of India is working to provide a mobility alternative that is "Shared, Connected, and ELectric" in recognition of this aspect. For Indian mobility, there is an increased need to plan for a green future and lessen reliance on imported crude oil.
An EV policy is being developed by the Indian government and is anticipated to be unveiled in the first quarter of 2018. There are compelling arguments from a number of Indian policymakers to continue focusing on EVs and to consider additional low-carbon choices like methanol, compressed natural gas, etc. By making mass purchases, the government intends to stimulate the market for electric vehicles, which could result in significant orders for the car industry. A significant tender for electric buses in 11 cities is about to be announced, following the previous publication of a contract for 10,000 automobiles.
With only 2 electric vehicle manufacturers, roughly 10+ participants in the 2-wheeler market, and 3–4 OEMs in the electric bus market, the Indian EV industry is still in its infancy. The majority of other vehicle OEMs are now considering launching EV models in India.
Although there is a goal of having all vehicles be electric by 2030, most industry experts say that a conversion rate of 40 to 45 percent is a more reasonable expectation. India's need for fleet cars, electric buses, three-wheelers, and two-wheelers would be a major driving force behind the development of EVs. Still a relatively small portion of the overall pie, personal car alternatives for EVs.
Between FY12 and FY17, auto production climbed at a CAGR of about 4%.
Production of commercial vehicles and three-wheelers experienced a decline; the sector contributes 7.1 percent to the nation's GDP; India is a significant exporter of automobiles; and there are about 40 OEMs operating in India, most of which have manufacturing or assembly facilities; significant OEMs include:
- Passenger Vehicles: Tata Motors, Maruti Suzuki, Hyundai, and Honda
- 3-Wheelers: Bajaj Auto, Piaggio, Hero Motocorp, Honda, Baja Auto, and TVS
- Commercial Vehicles: Eicher Motors, Tata Motors, and Ashok Leyland
India has 3 key Strategic Imperatives to look at EVs:
1. Higher Carbon Emissions:
The urgent need to cut our carbon emissions and fulfill our climate duties is one of India's main development priorities. Our CO2 emissions might be cut by 37% thanks to EVs.
2. Lower Power Demand:
Power generation capacities and demand have not increased simultaneously, making the sector unviable. Future grid stability may be aided by an increase in EVs. Electric vehicles will be a new source of power demand for the industry, and they may result in stable demand and a "paying customer segment."
3. Fuel Security Risks:
India now gets the majority of its crude needs from large-scale imports. India can reduce its energy use for passenger mobility by 64% by pursuing a shared, electrified, and networked solution. This might lead to a decline in the consumption of diesel and gasoline of 156 Mtoe (about US $60 Bn) for that year.
Key EV Policies in India:
1. National Electric Mobility Mission Plan
The National Electric Mobility Plan (NEMMP) 2020 aims to deploy 5 to 7 million electric vehicles in the nation by 2020. As part of this goal, the government will use the following mechanisms/policies to expand the use of electric vehicles in India.
- Operational regulations: use of legal framework and rules aimed at establishing safety standards, pollution standards, vehicle performance standards, charging infrastructure standards, etc.
- Permissive legislation: laws to permit the use of electric vehicles in various locations, if not already permitted.
- Fiscal policy actions: Market-shaping trade policies that affect imports and exports
- Policies specifically designed to encourage the production and early uptake of electric vehicles through demand creation efforts
- Programs and pilot initiatives to promote infrastructure development;
- Regulations to promote R&D
2. Faster Adoption and Manufacturing of Hybrid and Electric vehicles (FAME):
As part of the National Electric Mobility Mission Plan 2020, the government launched the FAME scheme (Faster Adoption and Manufacturing of Hybrid and Electric vehicles) in India to encourage the sale of electric vehicles on the Indian market. Under this programme, the government will offer specific incentives to reduce the cost of purchasing electric vehicles.
Technology Development, Demand Creation, Pilot Projects, and Charging Infrastructure are the four main aspects of the programme.
The government anticipates spending approximately Rs. 14,000 crores on this programme, which includes financial incentives for consumers to buy electric cars and financial incentives for businesses to do research and development in addition to building out the infrastructure for charging them.
Rs. 75 crores were set up for this scheme for the 2015–16 fiscal year, and it was virtually entirely utilised. Out of the budget allocation of Rs. 122.90 Crores for the most recent fiscal year (2016–17), approximately Rs. 91 Crores were used.
Support was provided to buyers in phase 1 of this programme during the fiscal years 2015–16 (Rs. 260 Crores) and 2016–17. (Rs. Rs 535 Crores). Depending on how well phase one goes, additional incentives may be offered.
For each electric bus, which normally costs between Rs. 1-2 crores (for imported buses) and between Rs. 50-80 lakhs (for domestically produced ones), incentives ranging from Rs. 33 to 66 lakhs are planned.
The government's JNNURM (Jawaharlal Nehru National Urban Renewal Mission), NEMMP (National Electric Mobility Mission Plan), and Smart city initiatives call for the acquisition of electric buses by a number of state and local transportation agencies over the next five years.
Top EV Industry Companies:
Tata Motors has already launched electric buses in the state of Himachal Pradesh and plans to deliver 25 hybrid buses to MMRDA in Mumbai. Company in talks with Chandigarh Government to start a pilot project for Smart City.
Tata Motors launched their EV Passenger cars business by winning a major tender of 10,000 cars launched by EESL. They have launched a car – Tigor EV and have recently delivered their first set of cars to EESL from their Saanand Plant in Gujarat. The Tigor Electric will be able to do about 120-150 kilometers on a full battery charge.
The National Thermal Power Corporation (NTPC) has built the first EV charging stations at its offices in Delhi and Noida as part of its foray into the EV-Charging industry. They are currently searching for national licensing. They will be able to set up the charging stations fairly rapidly if that occurs. The main reason for installing EV charging stations is to support renewable energy transportation. The charging station that is currently placed in NTPC is only for Mahindra automobiles. To implement this on a nationwide scale, NTPC has sought for a National Distribution License.
Bharat Heavy Electricals Ltd (BHEL):
A MOU for the production of batteries for electric vehicles has been inked between BHEL and ISRO. For the purpose of producing effective and affordable lithium-ion batteries, BHEL is receiving R&D technologies from ISRO. BHEL and ISRO are having a talk about batteries. The company has a technology tie-up with a foreign agency as well. For Ashok Leyland and Tata Motors' electric vehicles, BHEL has begun producing electric motors. In order to comprehend the market and need for batteries, BHEL established an internal committee. There must to be a national battery standard in India, claims BHEL. Currently, Mahindra Reva uses Chinese batteries for its electric vehicles.
At Vikhroli in Mumbai, Tata Power has set up its first electric vehicle charging station. It has established 2 more stations in Central & North Mumbai. Tata Power intends to install close to 50 EV charging stations in New Delhi and Mumbai. The chargers can also keep an eye on how well a car's battery is charging and how many units are being used.
DisclaimerInvestment/Trading is subject to market risk, past performance doesn’t guarantee future performance. The risk of trading/investment loss in securities markets can be substantial. Also, the above report is compiled from data available on public platforms.
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