Electric Vehicle Industry to Skyrocket by 2025
Published Date | 2019 January 10India: The Indian government has drafted a plan to impose a fee of Rs 12,000 on purchase of new petrol and diesel cars for promoting electric vehicles (EVs) and battery manufacturing, under a new policy that is nearing finalization. NITI Aayog proposed incentives of up to Rs 25,000-50,000 in the first year for electric two-wheelers, three-wheelers, and cars buyers. Benefits will be directly transferred to EV buyers to ensure that the gains aren’t pocketed by automakers. The “feebate” a market-based policy combining fees with rebates to reward energy-efficient or environmentally friendly investments or practices and penalize inefficient and environmentally harmful ones is expected to help the government garner close to Rs 7,500 crore in the first year and supplement its budgetary outlay of a mere Rs 732 crore, which it reckons is insufficient to fund the scale of expansion of EVs that is planned. According to BlueWeave Consulting, India electric vehicle market is projected to grow at a growth rate of 20.01% over the forecast period 2018-2025. Robust market growth is anticipated on account of rising number of government initiatives such as incentive schemes to encourage adoption of environment-friendly electric vehicles, growing consumer inclination towards electric vehicles, concerns over harmful effects of air pollution, and huge investments by various OEMs for developing more affordable and premium electric vehicles in the coming years. In order to promote the sale of electric vehicles in the Indian market, the government launched FAME scheme (Faster Adoption and Manufacturing of Hybrid and Electric vehicles) in India, as a part of the National Electric Mobility Mission Plan 2020, under which, the government would provide certain incentives to lower the purchasing cost of electric vehicles. The Managing Director, Vinit Bansal, EV Motors India said, “For the nation to progress towards the vision of a large fleet of EVs across the country, a coordinated approach between real estate developers, vehicle OEMs (original equipment manufacturers), and charger manufacturers is necessary”. Recently; EV Motors India launched its first EV charging station ‘PlugNgo’ in partnership with DLF, Delta Electronics India and ABB India. The association going to set up over 6500 charging outlets with an investment of USD 200 million over the next 5 years. These stations will be connected and networked to PlugNgo’s cloud-based integrated software platform. Over next 12 months company will set up 20 outlets and service center in the Delhi-NCR region followed by expanding its reach to Bengaluru, Chandigarh, Jaipur, Ahmedabad, Kanpur, Kolkata, Mumbai, Pune, Hyderabad, Amritsar, Bhubaneshwar, Cochin, Indore, and Chennai. According to BlueWeave Consulting, India Electric Vehicle Charging Station market is expected to grow with growth rate of 33.25% over the forecast period 2018-2025. Growing sales of electric vehicles is a major factor driving the demand for electric vehicle charging equipment in India. Various governments across the country are offering subsidies in the form of road tax exemptions to electric vehicle owners to encourage the adoption of electric vehicles in India, which has, in turn, aided in the expansion of electric vehicle charging equipment market. The NEMMP have also provided the basic groundwork for the adoption of hybrid and electric vehicles in India. Moreover, the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (FAME) India Scheme that supports the development of hybrid & electric vehicles, demand creation, pilot projects, and charging infrastructure, is expected to be a driving factor for increasing the demand of electric vehicle charging equipment over the next few years. Electric vehicles charging stations in India are installed mainly in homes, workplaces, and at public places, including shopping malls, petrol pumps, public parking, and mass transit stations. Presently, India has only 100 EV charging stations all over the states. Increasing preference towards fuel-based vehicles over electric vehicles for long-route trips is the major constraint for the market growth in India. Additionally, the high initial cost is another factor hindering the growth of EV charging equipment market in India. To overcome this, the government needs a minimum investment of USD 27.9 billion for setting up EV charging stations in India. India could take its step towards becoming the world's first country to have a thermal battery plant. Set up by Bharat Energy Storage Technology (BEST), the plant in Andhra Pradesh will produce first-of-its-kind thermal cells, aimed at boosting renewable sources of energy production, while maintaining a low carbon footprint. Commercial production of these batteries will start by May next year. The Thermal battery technology was patented in India by Dr. Patrick Glynn. The high energy density storage thermal batteries are quite impressive as it lasts longer than current lithium-ion batteries and can be used to power electric vehicles and telecom towers. Thermal batteries have little carbon footprints and use of no hard metal or inflammable substances which will drive the electric vehicle battery market over the forecasted period. Production of indigenously developed lithium-ion battery that can bring down the cost of various cell-powered systems, including electric vehicles launched in Tamil Nadu. The technology, developed by scientists at CSIR-Central Electro Chemical Research Institute in Karaikudi. Lead acid batteries that cost around Rs 7,000 lasts only six months, but a lithium-ion battery that costs Rs 30,000 can last eight years. The company is planning to set up a 1 GW solar energy plant, a cell manufacturing plant and a lithium-ion battery recycling plant near Hosur. According to BlueWeave Consulting, India Electric Vehicle Battery market is expected to grow with a significant growth rate during the forecast period, owing to increasing demand for environment-friendly vehicles. Diseases caused by air and water pollution are epidemic among minorities. Environmental pollution cause more than three times death than malaria, tuberculosis, and AIDs, countries such as Indian and China records the maximum death caused by environmental pollution. Pollution causes 7% of the medical expenses among middle-income group people across the world, in addition, according to World Bank air pollution cost in India was approximately 8% of its GDP or USD 560 billion. Government supportive policies and programs to produce and adopt electric vehicles, which is surging the demand for India electric vehicles battery market over the forecast timeline. According to the Research Director of BlueWeave Consulting; Mr. Laltu Sinha- Market for plug-in electric vehicles (PEVs) is charged up and ready to roll. Growth in market penetration of PEVs is occurring across most major markets in India. Utilities can gain the upper hand in the PEV arena through developing a PEV charging infrastructure with the digital customer at the core. According to our recent study, it’s around 80% of customers prefer buying charging services from their energy provider. However, many utilities are just beginning to formulate an integrated PEV strategy. A window of opportunity is available now, but utilities need to act quickly to become a major player in the PEV market. If they do not, other players in the PEV ecosystem (including automotive, technology and retail companies) will likely develop a digital customer experience strategy and thereby win. Governmental policies need to be considered as well. In Norway, 24% of cars are already running on electricity, with the political support to stop selling conventional fuel cars entirely by 2025. In the United States, the Department of Energy unlocked USD 4.5 billion in loan guarantees that can be used for PEV charging infrastructure and programs. Indian government under the Ministry of Heavy Industries and Public Enterprises has launched the FAME scheme (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India) in 2015 under the National Electric Mobility Mission Plan 2020 (NEMMP 2020), to promote faster transformation from Internal Combustion Engines (ICE) to EVs. The FAME scheme focuses on a three-phased approach to achieve the target of introducing six to seven million electrified vehicles on Indian roads by 2020 which will trigger the market growth of electric vehicles and infrastructure market over the forecast period.