Statements like “electric is the future” and “EVs will cause a revolution” dance on the lips of people from almost every demographic of the world. If you’ve ever been a listener or speaker of the aforementioned statements, let me tell you that the revolution has begun and the future is here! The question we should be asking is, Will the EV industry dissipate traditional transport in the next two decades? Will there ever be a scenario where they can co-exist? To answer these questions we must first understand that why is the transition to EVs so essential? Are the benefits restricted to “saving the environment” or curbing vehicular pollution? not really, an electric vehicle actually proves to be a better option logistically. Here’s how,
- EVs have far fewer moving parts than the traditional internal combustion engine.
- The battery, motor, and electronics associated with an EV require no maintenance.
- With the advent of the regenerative braking technology(the process of conversion of vehicle’s kinetic energy into chemical energy while slowing down, which is then stored in the battery for future use) the wear on the brakes of an EV reduces drastically, Thus brakes of an EV require significantly lower maintenance when compared to a conventional car.
- To put the points mentioned above into perspective, savings on maintenance per 160,000 kilometers(100,000 miles) would be close to 1 lakh INR($1400).
- The mileage provided by an e-vehicle is unmatched, prices per km drop drastically. (Mahindra e20 gives you a full charge of 100 km at 40 INR)
- From the consumer’s perspective, tax exemptions would be a great source of initial encouragement. In India tax is 100% exempted for fully battery-operated vehicles, till December 2022.
Now returning to the question we posed earlier, Herbert Diess(CEO VOLKSWAGEN) has predicted that within the next 5 to 10 years the world’s most valuable company will be that of an automaker, which indicates that the big corps are expecting a quantum change in the automotive sector in the coming decade. Incumbent giants like Volkswagen and General Motors have invested heavily in a potential EV revolution. When the big players from the traditional game, go “all in”, you know that the transition is inevitable. The Saudi oil giant Aramco has gone from saying that “the company is not losing sleep over electric cars” to now making active partnerships with chemical laboratories to diversify the company’s future, in a way compensating for the potential revenue decline of 25%(four-wheelers) with the rise of electric vehicles in the near future.
Now let’s look at this from an Indian spectacle: Tesla finally entered the Indian Market by registering a company named “Tesla India Motors” in Bengaluru. As of now, there is no clarity regarding the domain(sales/manufacturing/R&D) in which the company would work, but a lot of people have termed this as the beginning of “ The EV story in India”, but I feel a few more facts need to be taken into consideration. Tesla under Elon musk has revolutionized the transport industry in developed nations, and has also done phenomenally well in China, but can this be seen as an indicator for its success in India? Tesla Model 3 was one of the best performing EVs in China, It’s price was set at 249,900 yuan(28.22 lakh INR). This would end up costing much higher in India(estimated at 70–90 lakhs INR), as the manufacturing is based in China. I believe that the EV revolution in India will not be based on environmental consciousness, rather it would be built on affordable pricing and accessible infrastructure. I’m afraid that with that kind of pricing Tesla would have to find a place in the luxury car segment in India, which would surely not suffice to bring about a change in the transportation habits of 1.2 billion people. Pre-existing players like MG hector, Tata motors, Kia(all 3 have already rolled out semi-electric models) will be instrumental in driving the growth of EVs among the masses in India.
Other than pricing, two major determining factors in India would be The Two-wheeler segment and dense charging infrastructure. Let’s explore both of them individually:
- Two-wheeler segment: Two-wheelers amount to a whopping 74% of India’s total vehicle fleet, any transformation in the transport sector would be incomplete without a leap in the Two-Wheeler segment. E-scooters have become wildly popular in China, so much so that today they have 250 million of those on the roads, policies like exempting electric two-wheelers of license and placing limitations on usage of petrol-two wheelers in city centers, have proved beneficial for them. We as a nation can learn from these policies, and take a step in the right direction, just by having transformed the Two Wheeler segment we would have reduced 15% of vehicular pollution, and close to 30% of particulate matter.
2. Charging(Accessibility and Costing): The current prices are just not suited for the Indian market to say the least. The cost of 1KWh Li-ion battery(used in all modern e-vehicles) is well over 10,000 INR, this would mean that the cost of 5 KWh(required for a 100km range) of Li-ion battery would be well over the price of a generic scooter, which is surely not practical. It would require a mammoth of an effort to bring down battery costs, and build sustainable charging infrastructure in India. This could be our potential roadmap as per NITI AAYOG’s report during the Global mobility summit:
- Developing an ecosystem of fast-charging /swapping of batteries, by creating an infrastructure of charging stations, whose density could also go up to 1/per km in high demand areas. A smaller battery would lower costs, also reduce the total weight of the vehicle, Thus increasing the vehicle’s energy efficiency.
- Incentivizing developments to increase the efficiency of the vehicle, thereby reducing energy consumption
- Exploring new battery chemistries to suit the Indian market. Also, India must aim to gain the required raw materials from the recycling of used batteries, by aiming to become the capital of Urban Mining.
Analyzing the effects of Lithium mining in environmental and humanitarian terms:
- One of the major side effects of lithium mining is that it affects local water supplies, is highly detrimental to aquatic life.
- During the extraction of Lithium carbonate, the process harms the soil, which in turn has adverse effects on nearby agricultural produce.
Lithium mining has adverse effects on the environment, but is surely a better alternative than fossil fuels, as it allows us to curtail vehicular pollution to a major extent.
Now coming to the potential business opportunities EVs revolution would provide to the Indian Economy:
With the arrival of electric vehicles, we will see the growth of an ecosystem that will facilitate economic growth. EV charging systems, solar farms, lithium mines. Since EV batteries do not charge quickly(take about 50–60 minutes), “charge and chill” stations could be a possibility, at such stations recreational activities could be accommodated.
We can see a huge opportunity lying ahead for bike rental start-ups, owing to the popularization of e-scooters; to solve the problem of last-mile connectivity, as an e-scooter comes with increased mobility, and also reduces the hassles of refueling.
EV enabled India will only be a reality when the youth of the nation is backed by the government, and works towards building more affordable and accessible technological solutions[Tork motors(backed by Ratan Tata), Ather energy(backed by Sachin Bansal) will be companies to keep your eyes on]. We must strongly invest in startups that will enable us to reach these goals. I highly doubt a foreign corporation-led transition, I’m optimistic about a home-grown revolution fueled by the minds of young Indians.