Electric vehicles are more of a reality now than a distant dream as they are changing everything. However, while countries such as the US and China are advancing at a fast pace, India is at an important point. The question is whether India is managing to remain in sync with the global EV trend or are we lagging behind? This article will show you the stages of the evolution of electric vehicles, their present with regard to India and the issues that are ahead for us.
Overall, this is not just about cars. Cars are the intersection of the future and India’s importance is to be accentuated in the process. Hence the focus will be whether India is gaining or losing in the race to carve a niche for the automotive industry as an influential country.
A New Era in Activism – The Electric Vehicles Revolution
Let’s take a step back first while visualizing the role of India. All that India believes is change and this time it is not just about economical change for India but change in ‘Geopolitics’. With resources dominating the market, tomorrow’s superpowers will be those countries who comprehend the mechanics that surround the construction of Electric vehicles, especially batteries.
In 2023, there was a sudden uptick which saw over ten percent of all new automobiles developed to be electric. Companies such as Tesla, Ford and Volkswagen are also investing billions to the development of EV cars. The situation is actually the opposite in the US as they are trying to make changes into electric motoring and the Biden administration is making the policies favorable to ensure electric cars are more available.
But, here’s the twist – China does not simply partake in this race – it is winning it. China is the largest player, accounting for over 75% of the batteries in the EV market. As this happens, both the US and Europe are making frantic attempts to catch up. So, in all this, what is India’s role?
India’s EV Market – A Brief Overview
The Indian Ev market with time is projected to evolve at a compounded annual growth rate of 90%. Impressive, isn’t it? Various companies like Tata Motors, Hero Electric and Ola Electric are making rounds in mainstream headlines yet the reality has its own depth.
Even though India is using electric vehicles, the number is very negligible and does not signify a trend in the industry in the country. Since the number of electric vehicle users is low, it’s understandable that they lack the infrastructure as well. It is worth noting that acoustic driving is a major transportation mode in India with 70% of the Lithium batteries used in the country imported from China making the country overly reliant on Chinese manufacturers therefore making India vulnerable. However, the future looks promising as the Indian government has pledged to meet its goals in the EV industry with the policies already in place to allow trade such as the FAME scheme.
Key Players in India’s EV Industry
- Ola Electric: Best known for its two-wheelers, Ola is one of the top EV producers in India.
- Tata Motors: Tata is progressing with its electric passenger cars such as the famous Tata Nexon EV.
- Hero Electric: An important actor in the space of electric two wheelers.
However these efforts have relatively failed since the Indians EV market is still predominantly two and three wheeler oriented. Although this is good progress, the market for electric cars and trucks – which are essential for mitigating emissions on a larger scale – remains quite small.
Why Is India Moving to EVs?
There are majorly three factors responsible for India moving to EVs.
- Climate Change: Out of many CO2 polluting countries, India is one of the foremost. In order to achieve its zero emission goals by 2070, the nation needs to shift towards EVs.
- Fossil Fuel Dependency: With dwindling oil supply and fluctuating prices in the map of the world that are disrupted owing to wars such as the Russo Ukrainian one, the Indian economy is quite sensitive to oil price fluctuations.
- Geopolitical Leverage: Just as the control of oil resources shaped the geopolitics of the 20th century, so too will dominance over battery components such as lithium and cobalt shape the geopolitics of the 21st century.
The EV Ecosystem – India’s Position
It is critical to cut the whole EV value chain to get insights into the areas where India is either trailing behind or performing reasonably well.
Manufacturing of batteries
An electric vehicle has battery cells as its Achilles’ heel hence, producing them in mass is requisite to lowering the cost. Unfortunately, this is very dismal for India, the nation is miles away in this regard. India imports a very huge quantity of its lithium-ion batteries with plans of setting up self-sufficient sources still underway, which can take years as of now. It is projected that India will still be unable to keep up with China which owns a range of 60% lithium refineries.
EV Components and Software
With India’s proven expertise in systems integration and programming, it is well-placed to meet the growing need for EV software and telematics. Advancement in active driver assistance and battery management systems development has commenced. However, the integration of these technologies in vehicles on a large scale poses the challenge.
Charging Infrastructure
One major impediment towards EV penetration in India is the absence of charging points. Rural and semi urban regions are not catered for despite expansion of EV charging stations in urban areas. This want of infrastructure adds to the mass adoption barrier.
Mobility as a Service (MaaS)
There is an increasing trend of using electric powered mobility in India as companies like BluSmart provide there is an increasing trend of using electric powered mobility in India as companies like BluSmart provide electric cabs. However, for these services to be adopted across the country proper investment in vehicles and charging points has to be made.
The Geopolitics of EV Resources
This is where the curve ball comes in. The key materials required for the manufacture of EV batteries are lithium and cobalt. And the rub? India has no strong deposits of either.
Lithium
Let us discuss any country’s lithium reserve, that country always requires Examination. More than 93% of the global lithium reserve exists in four nations, namely Australia, Chile, China, & Argentina. One good advancement is that those four countries possess the greatest percentage of lithium reserves. In spite of having certain lithium resources, India is not in a position to offer them since even if they are proven it will take time to construct the infrastructure necessary to mine and refine lithium.
Cobalt
With cobalt, the situation is even worse. The Cobalt production comes from three countries Congo, Australia and Canada with 70% of it coming from the Democratic Republic of the Congo where a large percentage of the cobalt mines are run by China. Therefore, say if India begins to manufacture its own EVs, it will still need to seek essential resources from China.
Government Policies and Market Viability
With every passing year, the Indian government is much more supportive towards the startups. The Indian government recognizes the importance of Electric Vehicles and believes that its deployment will be beneficial for the domestic economy. For example, the FAME II program provides subsidies to both consumers and manufacturers to help reduce EV costs. Furthermore, the scheme called PLI, which stands for Production-Linked Incentive, aims to foster domestic production of Electric Vehicles (including warehouses, EVs and batteries).
Nevertheless, these initiatives do not seem to have impacted Indian consumers who have been accustomed to lower price points and have a high purchasing power on entering the market. The aspect of providing assistance and reducing tax burden is one of the approaches that can help tilt the balance in favor of EV.
Cold Start Problems – Challenges Ahead
In India’s EV transformation, critical cold start problems must be resolved to facilitate top-down penetration of EVs which are as follows:
- High Operating Costs First Cost: Downdip buying power, many Indians cannot simply afford to pay a high amount of first cost even though the running costs of the EVs is significantly low.
- Low penetration rate and immature ecosystem – Without adequate coverage of charging stations such an encouraging rate of adoption is rare among the worried drivers.
- Low Presence of EV Brands – With the likes of Ola and Tata gaining foothold progress is still occurring however more players need to join the space to bring about efficiency in the economy.
- Options to finance – Given the adoption of EV has the baseline cost as the problem financing will be another major influencing factor. EV consumers would need to see banks and other financial bodies wake up to providing viable financing options for acquiring EVs.
Conclusion – Is India Winning or Losing the EV War?
So, is India winning or losing the EV war? The answer isn’t black or white. There have been major achievements in the electric two-wheeler and three-wheeler segments in India, and the policies of the government are favorable for growth. But the chronic dependence on outside sources for essential materials such as lithium and cobalt puts it in a compromising position in the long run.
In order for Musk to win the EV war in full, India has to pour massive money into domestic battery localization, deployment of reliable charging stations, and making the competition sky high by increasing the number of EV manufacturers in the country. The opportunity is there, however if India is able to capitalize on it is still left to be answered.
At least for now, India has managed to participate in the race but we are surely not at the front. There is an EV revolution and all Indian companies, the Indian policy makers and the Indian businessmen have to work to ensure we are not left behind.
