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India is one of the fastest-growing car markets, divided into various segments of which, the affordable end drives the most interest. As the number of people on the road increase, it is important to take into consideration the environment and opportunities of modernization the world today presents. A quick solution to greener travel would be Electric vehicles, they’re quite popular on the global front. The question however remains, Is India ready for electric cars?
The Indian government realizes the benefits of EV to both the people and to the country. Electric vehicles are emission and noise-free and require very little attention when it comes to their maintenance. This particular segment can also reduce the Balance of payment deficit of the country as the Indian Automobile sector survives on foreign oil, importing crude oil worth US$ 120 billion in the year 2020.
Electric Vehicles are of great interest in India and the Ministry of power has already launched a National E-Mobility Programme, rolling out electric cars including the Mahindra e-Verito and Tata Tigor EV as a part of this program. This program aims at providing a push to the entire E-Mobility Ecosystem which includes; electric vehicle manufacturers, charging infrastructure development companies, fleet operators, and service providers. The government shines further light on charging infrastructure and policy framework to increase the percentage of electric vehicles in India.
The government also launched the Faster Adoption and Manufacturing of Electric Vehicles scheme, also called FAME in 2015. The aim this time around was to promote the adoption of electric vehicles and incentivize manufacturers into building EVs in India. In its first phase, subsidies worth US$ 130 million were provided to support the purchases of electric vehicles. The second ongoing phase, continuing onto 2022, upgraded its subsidies to US$ 1.4 billion. The main component here was to accelerate local manufacturing, with the results as of 2021 looking dull as only 10% of the EV deployment target for phase 2 was reached.
Of course, subsidies and incentives aren’t enough. For the EV market to grow, an increase in private investments is to be expected. Luckily, there exist positive signs of investor interest with Tesla announcing plans to opening factories and retail outlets in India and venture capitalists expecting to invest amounts well over US$ 300 million in EV companies across the countries.
Another important aspect is the interest of potential customers. Electric Vehicles often require more than an hour to charge up to a sufficient level. The problem here lies with the Indian consumer, most of whom are impatient and cannot wait long periods to charge their vehicles. The customer base also shows little faith in the range of these vehicles, worrying their battery may run out while on the journey from point A to point B. The lack of infrastructure only adds to this issue as Charging stations are still hard to come by, especially while traveling through rural areas.
Other issues include general consumer perception of vehicles. A car is a depreciating asset and since Electric Vehicles are relatively new to the Indian market, there exists a lot of uncertainty with the resale value of such units. Electric vehicles also face issues with the ways of Indian traffic. Companies like Tesla focus on improving the driving experience by letting their vehicles do most of the work (parking, driving). This, however, would be tough to perform on Indian roads as for one, they are quite dangerous and are very poorly built.
The issues with EV don’t end here. While talking about price, EVs are quite a bit higher than their conventional fuel-powered counterparts. For example, the Tata Nexon price starts from ₹7.19 lakh, while the Tata Nexon EV price starts from ₹13.99 lakh. This difference can push away those looking to invest in such vehicles. A reason for this increase in price lies in a component of all-electric vehicles. They run on Lithium-ion batteries and India unfortunately, does not produce Lithium or Lithium-ion batteries. This results in higher costs of import eventually leading to higher prices for EV’s.
Moving back to the question-Is India ready for Electric cars? Well, yes but actually no. India is encouraging the adoption of electric vehicles, however; the situation isn’t optimal. The infrastructure is insufficient, the population isn’t educated enough on the benefits of EV’s and EV’s themselves aren’t easily accessible. They have their issues that customers can gladly avoid by sticking with their fuel-powered counterpart. The Government is yet to include more vehicles under the FAME program to fully make use of its subsidiaries. With all these issues and attempts in mind, India is very well on the track to becoming ready for electric vehicles but, it hasn’t reached that point yet.
--- Zulfiqar Tabassi
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