Nitin Gadkari promises competitive EVs in 2 years

nitin-gadkari

Indian Market
by 5paisa Research Team Last Updated: 2022-08-08T19:03:14+05:30

Nitin Gadkari, the Union Minister of Road Transport and Highways, has been in the news for the rapid aggression with which he executed road and highway projects across India.

In fact, the average length of highways laid during any average day was the highest when Nitin Gadkari was at the helm of affairs. Now Gadkari is of the view that EVs are not only practical and workable, but most Indian companies will also find EVs to be economically viable.

Gadkari pointed out that the growth and acceptance of electrical vehicles in cars, scooters and commercial vehicles was really picking up in a big way in India. He added that rapid strides in green fuel technology were likely to further reduce the cost of owning and operating electric vehicles (EVs).

This would most likely bring down the cost of owning EVs to the same level as petrol run vehicles. That is expected to happen over the next 2 years.

Gadkari projected that with first time owners of cars already shifting to the eco-friendly EV vehicles, there could be a big shift happening.

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For instance, EV sales were very likely to be led by alternative fuels derived from renewable energy sources, such as electric, green hydrogen and ethanol.

While it is still on a small base, the EV sales in the current year were up 162% on a YoY basis. The growth is likely to sustain for some time to come.

One of the reasons Gadkari wants a rapid shift to alternate fuels is that cleaner energy and low-carbon pathways were the trend for the future.

India is also a signatory to the Paris protocol and therefore it behoves upon the Indian government and the consumer to action this shift towards alternative fuels Gadkari mentioned that not only were alternative energy EVs becoming efficient and low cost, but could also deliver more value for money.

There is a larger concern on the energy security front. Currently, India relies on imports to meet 85% of its daily energy needs. This makes the economy vulnerable as we recently saw in the case of the Russia Ukraine war, which had pushed up crude prices to $130/bbl.
 

Check - Brent Crude scales to above $130/bbl


Also, the oil imports entail huge foreign exchange outflows and that naturally puts a pressure on the Indian rupee. Also, lesser oil imports can reduce the burden on the current account.

The initiative is not only coming from the government but Indian corporates are also trying to jump on the bandwagon.

The experience in the last couple of years is that focus on EVs and alternate energy is a lot smarter and value accretive for companies.

Just look at Tata Motors versus Maruti and Tata Power versus NTPC. Renewable as a source of energy is picking up. A big thrust on alternative energy is the only plausible answer.

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