What challenges India faces in electrification of its cars?
India, one of the biggest consumers of automobiles consumer and second largest population of the world, now faces a very big challenge ahead. Around the world, most countries are now trying to move away from gasoline vehicles, and are moving towards electric vehicles. For long now, electric vehicles are tipped to be the future of urban personal mobility, and more countries are announcing plans to completely banning sales of gasoline vehicles as early as 2030s and 2040s.
India, a country of almost 1.3 billion people, is tipped to overtake China as largest population of the world. And, many cities of India have a big problem of excessive pollution due to automobiles. Hence, going forward, India needs to reduce its dependence on gasoline vehicles to reduce CO2 emissions in its cities. Electric cars are going to play a big part in this.
In this article, we are going to be discussing the challenges that India faces ahead, in electric fiction of its vehicles, and why its not going to be very easy to do, as many might think.
Challenge 1: The Market Itself
Indian car market itself poses one of the biggest challenges to companies offering electric vehicles. Indian car market is one of hottest and most comparative car markets around the world. Many big corporations like GM (General Motors), Ford, Volkswagen etc. have struggled to compete and be successful in Indian market. GM even had to leave India altogether in 2017. The market is dominated by Japanese car manufacturer Suzuki with almost 50% market share. Apart from it, South Korean giant, Hyundai also does well in this market. Other players include Honda, Toyota, Tata, M&M (Mahindra and Mahindra) and Kia.
The one formula that successful car brands in India have always used is providing cheap cars with great fuel economy. Most cars sold in India are priced below 10 lakh rupees (almost 13k dollars). The average selling price of a new car in India is 7.7 lakh rupees (almost 10k dollars) in 2019. Hence, it is going to be difficult for companies to sell electric cars in India because these electric cars are not going to be cheap for Indian buyers.
The cheapest electric car in India is Tata Tigor EV, which is a electric version of a gasoline car, its price starts at almost 10 lakh rupees (13k dollars). Which is almost 33% more than average selling price of a new car in India. Meanwhile, Tata Tigor (the gasoline version of the car) starts at almost 6 lakh rupees (8.2k dollars). Hence, the electric version of the car is almost 66% more than the gasoline version of the car.
In January 2021, Elon Musk on Twitter confirmed that Tesla plans to introduce its cars in India. With cheapest Tesla, the Tesla Model 3 expected to be released in India. However, the Tesla Model 3 starts at 37,990 dollars (27 lakh rupees). Which is almost 4 times the average selling price of the car. And that’s not the only thing, the government will levy 100% tax on this car since this would not be manufactured in India. Hence, the selling price of cheapest Tesla in India would be 76k dollars (almost 54 lakh rupees). Which makes Tesla Model 3 a luxury car, which would be out of reach for most of the Indians. This reflects on one more big problem, which is the 100% tax on imported cars (which are not manufactured in India itself). This means, if company wants to competitively price its electric car, then company would need to manufacture that car in India itself, and set-up a production facility there, which is not going to be cheap.
Challenge 2: Infrastructure for charging
Charging infrastructure is one of the biggest challenge for any country, which is trying to replace gasoline cars with electric cars. Since the current technology of batteries have a limitation of battery capacity, and in turn limits range of the cars, charging infrastructure plays a key role in wide adoption of electric cars. Tesla’s supercharging infrastructure in US has proved that, consumers prefer electric cars with better charging infrastructure are more practical for consumers, than better electric cars with sub-optimum charging infrastructure.
In India, charging infrastructure is going to be an even bigger challenge. It is because some areas of the country still suffer from power outages, which are not going to be optimal for charging electric cars. Still some parts of India lack infrastructure of electricity altogether. Charging stations in these places will require first adaption electricity, and then only charging infrastructure will be created in these areas. Also, for optimal charging speeds, these charging stations will require a decent amount of voltage at direct current. Tesla’s Supercharger requires a 480v direct current supply for great super-fast charging speeds. This will require good electricity infrastructure at charging stations, to get decent charging times. This will be important because it is sometimes faster to charge your electric car, from 0–50 and then charge again at next station, rather than waiting to charge till 100 and then continuing.
This will also require effort from authorities in maintaining these charging stations and keep them working 24x7, so that charging facility is available to end-user whenever required. Still in 2021, it is difficult to find charging stations outside metropolitan cities in India. Making a road trip on an EV difficult. India only has a total of 1000 charging stations across India right now. Meanwhile, city of Los Angeles alone has almost 2000 charging stations. So, India has a lot of catching up to do in terms of creating a good charging infrastructure.
Apart from that, government should take steps, to standardize the type of ports to be used by EV manufacturers for charging. European Union did this for all EV manufacturers, and hence why they are able to create such good EV charging infrastructure. This will help a lot in creating a bigger infrastructure quickly, and will not create a situation like in US, where cars with other brands like Porsche, Ford etc. cannot access Tesla Supercharging Network.
Challenge 3: Incentives by Government
This is probably going to be the most important part in convincing consumers to shift to electric cars and, convincing auto manufacturers to build electric vehicles. In other countries, governments have given incentives like exemption from congestion tax, monetary incentives for buying a EV, exemption of road tax etc. And governments also provided incentivized benefits to auto manufacturers like exemption taxes, to encourage them in making more electric cars.
India needs to adopt similar policies as well. Many Indian states already have some kind of incentives for consumers, buying a electric vehicles. These include exemption of road tax and vehicle registration fees, purchase incentives, etc. These policies vary state-by-sate. However, many states in India have only drafted their EV policy till now, and is subjected to be approved.
Incentives for people to buy EVs is one thing, but governments also need to incentivize manufacturers to encourage more creation of electric car models. More the number of models by each company, more is the competition, and better will be the technology of the vehicles to compete with each other. In the end, consumer will be benefited as competition will not only drive the technology and range of these cars, but also will drive down the price of these vehicles. Government should also incentivize companies to invest in making more and more charging stations across India. The policy and incentive of creating charging stations should be such, that these companies are motivated to improve the EV charging network across India, thereby reducing effort required by the government in this department.
Challenge 4: Technology of the battery
Let’s get one thing clear, current technology of electric cars is not good enough. Especially, in India. The cheapest electric car in India, Tata Tigor EV only has 213 km (132 miles) of range on full-charge. The better models, with good range are generally out of spending capacity for average Indians. So, the battery technology in cheap EVs, (under 10 lakh rupees) in India certainly needs to improve, to lure more buyer towards EVs.
But, these lithium-ion batteries are not going to be enough to drive growth of future electric cars. These lithium-ion batteries add lot of weight to the car, thereby decreasing the overall efficiency of the vehicle. These also require higher charging times, due to their slower charging speed. And the most important and biggest problem of these batteries is that they require metals like Cobalt, Copper, Nickel and Lithium. Many of these metals are not found on earth in abundance, hence these are required to be mined. And mining of some of these metals cause contamination and excessive use of ground water, and also produce carbon dioxide during the process. Which is exactly what we want to reduce by shifting to EVs. And for country like India, if the want to mass produce EVs, either they would’ve to set-up farms to mine these metals, or import them from other countries. Both of which have issues of their own. Especially setting up farms because these farms cause great deal of damage to country’s ground water and cause excessive carbon dioxide emissions. And import of these metals won’t be ideal to keep up the demand of EVs.
Hence, improvement in battery technology will solve many issues. Like better charging times, lighter batteries with better range on car, and much less impact on environment during their manufacturing.
Challenge 5: How electricity will be produced for increased demand
It’s no secret that, irrespective of the battery technology being used, an electric car would still be better for environment than a gasoline car over many years, even when you include the carbon dioxide that was produced to create the battery of electric car. However, this is only possible if the electricity is being produced from renewable and clean sources like Windmills and solar energy. In this aspect, India needs still needs to improve itself. In 2021, India still relies on fossil fuels like Coal to produce almost 80% of its electricity. And only produces 17% of its electricity using renewable resources like solar energy, wind energy and hydro-electric power dams. Many argue that, this over-dependence on coal based electricity is one of the primary reason of problems of smog due to pollution in many Indian cities.
Hence, India needs to start reducing its dependence on coal for its electricty. Otherwise, there won’t be any benefit of going towards EVs for reduction CO2 emissions. Without transforming the power industry to use renewable sources would cause major problems and will make pollution worse in many cases when there will be increase of demand of electricity as the number of EVs on roads of India will increase. India is been doing its efforts by building solar farms and hydro-electric power dams across the country, but the country is still far from reducing its dependence on coal for its a normal use, let alone for future when there will be increased demand of electricity for EVs.
Conclusion: How does future of EVs look in India?
Future of electric vehicles looks bright in India, if government takes correct measures and people realize the importance of moving to electric vehicles. However, some measures like moving towards renewable sources of electricity are of paramount of importance for success of EVs in reducing air pollution in cities across India. Fortunately, two Indian car companies, Tata (who own Jaguar and Land Rover) and Mahindra, are investing heavily in electric vehicles. Both manufacturers have a team each in all-electric motorsport series, Formula-E where big auto manufacturers like Audi, BMW, Mercedes, Porsche compete to develop technology for electric race cars, to be used road cars of future. (Tata as Jaguar Racing and Mahindra as Mahindra Racing) This depicts commitment of both the brands towards electric vehicle technology. Both Tata and Mahindra have many electric cars lined to be launched in India as well. Even some other big manufacturers like Hyundai, Renault, Suzuki and MG -Hector are bringing their electric car models to India, to expand their EV portfolio. Also, Tesla plans to introduce cars in India with its Model 3. Considering this, EV offerings by companies in India are going to expand rapidly in coming years. Success of electric vehicles will greatly determine if and when India will able to solve their problem of air pollution in their big cities. Price of these cars along with charging infrastructure will play a key role in the success of EVs in India.
