INDIA ALL-SET TO LEAD THE EV ECOSPACE
India is the fifth largest car market in the world and has the potential to become one of the top three in the near future– with about 40 crore customers in need of mobility solutions by the year 2030. That is one side of the coin. The other side is that the country needs a transportation revolution. The current trajectory of adding ever more cars running on expensive, imported fuel and cluttering already overcrowded cities suffering from infrastructure bottlenecks and intense air pollution is unfeasible. India’s cities will choke. A transportation revolution will have many components – better ‘walkability’, public transportation, railways, roads – and better cars. Many of these ‘better cars’ will likely be electric. The transition to electric mobility is a promising global strategy for decarbonizing the transport sector. India is among a handful of countries that support the [email protected] campaign, which targets to have at least 30% new vehicle sales be electric by 2030. Hon’ble Prime Minister advocating for five elements, ‘Panchamrit’ in the recently concluded COP26 in Glasgow for climate change is an apparent commitment for the same. Hon’ble PM espoused for various ideas like renewable energy catering to 50% of India’s energy needs, reducing carbon emission by 1 billion tonnes by 2030 and achieving net zero by 2070, for a bright future of our future generation to lead a secure and prosperous life.
The push for EVs is driven by the global climate agenda established under the Paris Agreement to reduce carbon emissions to limit global warming. It is also projected to play an important role in improving the overall energy security situation as county imports over 80% of overall crude requirements, amounting to ~$100 billion. EV industry is also expected to play an important role in local EV manufacturing industry for job creation. On the other hand, through several grid support services, EVs are expected to strengthen the grid and help accommodate higher renewable energy penetration while maintaining secure and stable grid operation.
The global electric mobility revolution is today defined by the rapid growth in electric vehicle(EV) uptake. It is estimated that two in every hundred cars sold today are powered byelectricity. This phenomenon is today defined by the rapid growth in EV uptake, with EV salesfor the year 2020, reaching 2.1 million. The global EV fleet totaled8.0 million in 2020 withEVs accounting for 1 % of the global vehicle stock and 2.6 % of global car sales. Falling battery costs globally and rising performance efficiencies, is fueling demand of EVglobally.
It is estimated that by 2020-30 India’s cumulative demand for battery would be ~900-1100 GWh, but the concern looms due to absence of manufacturing base for batteries in India and sole reliance on imports to meet its rising demand. As per Government data, India imported more than $1 Billion worth of Lithium-ion cells in 2021, even though there is negligible penetration of electric vehicles and battery storage in the power sector. While India is yet to grab the opportunity, global manufacturers are betting high on battery manufacturing and fast moving from giga-factories to terra-factories.
With recent technology disruptions, battery storage has great opportunity in promoting sustainable development in the country considering Government initiatives to promote e-mobility and renewable power (450 GW energy capacity target by 2030). With rising levels of per capita income, there has been a tremendous demand for consumer electronics in the areas of mobile phones, UPS, laptops, power banks etc. that requires advanced chemistry battery. This makes manufacturing of advanced batteries one of the largest economic opportunities of the 21st century globally.
Government of India has taken various measures to develop and promote the EV ecosystem in the country ranging from Remodeled Faster Adaption of Manufacturing of Electric Vehicles (FAME II) Scheme (10,000 crore) for consumer side to Production Linked Incentive (PLI) Scheme for Advance Chemistry Cell (ACC) (18,100 crore) for supplier side and finally the recently launched PLI Scheme for Auto and Automotive Components (25,938 crore) for manufacturers of Electric Vehicles.
Thus, all these forward and backward integration mechanisms in the economy are expected to achieve robust growth in coming years, will enable India to leapfrog to environmentally cleaner, Electric Vehicles and Hydrogen Fuel Cell Vehicles. This would not only help the nation conserve foreign exchange but also make India a global leader in manufacturing of EVs and better comply with COP24 Paris Climate Change Agreement.
All the three schemes cumulatively expect an investment of about 1,00,000 crore which will boost domestic manufacturing & also facilitate EVs and battery demand creation along with development of a complete domestic supply chain& Foreign direct investment in the country. The Program envisages oil import bill reduction of about 2.0 lakh crores & import bill substitution of about 1.5 lakh crores.
I hope the vision set by my Hon’ble PM will push both the public agencies and private entrepreneurs to embark on a collaborative journey that will benefit the country on a scale unimagined.
The writer is Union Heavy Industries Minister