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MAY 2020  
TERI Analysis
Electric Vehicles: The Future of Mobility

Industrialization and developing economy are hard pressing on the rising levels of air pollution, particularly in our metropolitan cities. To add to the woes, energy security is also of major concern. Electric vehicles (EVs) emerge as the way to combat the ill effects of bad air that we breathe, and also to subdue the concern of energy security. The global automotive industry is at the tip of paradigm shift from internal combustion engines (ICEs) to zero emission EVs. India has announced to shift all the fleet to EVs by 2030. The government has expressed intent to push manufacturers to get into mass manufacturing of EVs to reduce dependence on imported fuel and control environmental pollution.

Drivers for India’s Electric Mobility Initiatives

Energy security

India’s crude oil imports have risen exponentially and the demand for oil grew by 5.1 per cent in 2016, higher than world’s largest net importers, the US (0.7 per cent) and China (2.9 per cent). India’s crude oil deficits stood at $52 billion in 2017 and accounted for almost 50 per cent of the total trade deficit of $109 billion.

Pollution levels

India ranks as the third-largest carbon- emitting country in the world accounting for 7 per cent of the global carbon dioxide emissions from fuel combustion. According to the Greenpeace and AirVisual analysis, 22 out of the 30 most polluted cities of the world are in India.

Changing Trends in Global Automotive Market

The Indian auto industry is the 4th largest in the world with a growth rate of 9.5 per cent in the year 2017. The recent shift in global automotive technology and an increasing uptake in EVs is likely to pose a challenge to the existing automotive market if the country does not plan its transition towards newer mobility solutions and develop the required manufacturing competencies and infrastructure to uplift the market.

Impact of EVs in Automotive Ecosystem

Electric vehicles would certainly change the dynamics in the automotive ecosystem. It will transform the business approach of the entire value chain. The following are the impacts of EVs in automotive ecosystem:

  • Automakers: Surge for the EVs is paving the way for new internal power centres and external relationships
  • Dealers: The dealer business model will undergo changes as EV maintenance costs are expected to be lower than those of conventional cars
  • Suppliers: They will need to reinvent themselves to be relevant to the future
  • End customers: Customers prefer vehicles that are fun to drive and packed with latest technologies
  • Government regulations: Government can bank on EVs to meet their climate goals.

Cost of Ownership

The cost dynamics of running an EV for commercial purposes, with high vehicle utilization, are quite favourable with almost a similar total cost of ownership for ICEs as well as EVs. For a commercial user, the differential in acquisition cost can be recovered in around 5 years due to lower operational expenses. However, for a private user, the cost of ownership for an EV remains much higher.

After the implementation of BS VI norms in April 2020, petrol and diesel vehicles are expected to get costlier by 8-15 per cent, thereby further reducing the differential cost between ICEs and EVs, making electrical cars viable for retail customers as well. In the two-wheeler (2W) category, acquisition cost of ICE scooter is 24 per cent less than the EV 2W, however the operational cost is 60 per cent higher.

Role of Different Stakeholders to Successfully Deploy EV Ecosystem

There is a need for a long-term policy framework that allows for continuity and attracts desired investments required for EV deployment. Following the government’s announcement of complete vehicle electrification by 2030, different stakeholders are providing pioneering efforts in the same direction.

Demand-side incentives

  • Providing policy clarity fiscal and non-fiscal benefits
  • The government should pace the speed of changing all its fleet to EVs
  • Non-fiscal benefits: Special EV driving lanes, parking spots, and so on

Supply-side incentives

  • Incentivize development of local technology
  • Incentives on EV R&D investments
  • Exploring the possibilities of tradable carbon credits to original equipment manufacturer (OEM)
  • Exploring the opportunities of retrofitting the ICE to EV.

Charging infrastructure

  • Mandate fuel stations to install charging points
  • Promote and incentivize R&D for charging technologies
  • Incentivize power rates for charging such as special time of use rates or pay per use.

Supply chain

  • Encourage local EV design and software development
  • Encourage investments in manufacturing battery, semi-conductors, controllers, and microprocessors for EVs
  • Setting up policy framework for recycling and reuse of batteries.

Way Forward

There is no denying that e-mobility and its growth could impact auto component manufacturers in India in a big way.  The vehicle manufacturers should develop and operationalize—a future mobility strategy to position the business in the evolving market landscape. The component suppliers should re-align their business model to support the EV ecosystem. Battery manufacturers should explore the tie ups with charging operators for battery swapping. They should access the opportunities to indigenize their operations.

The utilities should develop smart grid capabilities such as smart metering and vehicle to grid charging. They should incentivize the power rates such as special time of use rates for charging or pay per use. They should also explore the opportunities to set up independent line for charging stations.

Electric vehicles represent a big challenge for the nation as they can disrupt the whole power system, but are inevitable for a sustainable future. It comes up with a basket of opportunities for academia, regulators, and manufacturing industries. What we have visualized till now is only a fraction of this behemoth revolution and we are hoping the best outcome is yet to arrive.

Rudhi Sundar Pradhan, Associate Fellow, Industrial Energy Efficiency Division, TERI, New Delhi.

   
© TERI 2020
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Nominations open for CSP Today India awards 2013


The inaugural CSP Today India awards ceremony takes place on March 12, and CSP developers, EPCs, suppliers and technology providers can now be nominated.

CSP has made tremendous progress since the announcement of the Jawaharlal Nehru National Solar Mission in 2010. With Phase I projects now drawing closer to completion, the first milestone in India’s CSP learning curve is drawing closer. CSP Today has chosen the next CSP Today India conference (12-13 March, New Delhi) as the time for the industry to reflect upon its progress and celebrate its first achievements.

At the awards ceremony, industry leaders will be recognized for their achievements in one of 4 categories: CSP India Developer Award, CSP India Engineering Performance Award, CSP India Technology and Supplier Award, and the prestigious CSP India Personality of the Year.

Matt Carr, Global Events Director at CSP Today, said at the opening of nominations that “CSP Today are excited to launch these esteemed awards, which will enhance the reputation of their recipients. I am particularly excited to launch the CSP India Personality of the Year award, a distinguished honor for the industry figure deemed worthy by their peers.”

All eyes will be on the CSP Today India 2013 Awards when nomination entry closes on February 4 and the finalists are announced on February 11. The awards are open to all industry stakeholders to nominate until February 4 at
http://www.csptoday.com/india/awards-index.php or by e-mail to [email protected]

Contact:
Matt Carr
+44 (0) 20 7375 7248
[email protected]