Electric Vehicles and its future in India

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As waves of high crude oil prices wash over the world, and amidst high concerns over India’s growing dependence on imported oil, a switch towards electric vehicles from conventional ones has been initiated. The EV industry in India is poised for growth. With the latest boost given to the EV market in Budget 2019, the government seems all serious on achieving the goal of complete conversion to electric vehicles by 2030.

EV adoption requires an ecosystem view and lots of pieces of the puzzle are falling in place. While the total cost of ownership was always in favor of EV, the announcement in the reduction of GST rate on electric vehicles from 12% to 5% reduces the upfront higher cost as against an ICE engine and improves the buying decision in favor of EVs. The additional income tax deduction of ₹1.5 lakh on interest on loans taken to purchase electric vehicles is a bonus and the industry had not anticipated that.

Apart from the various incentives provided by the government, the inherent advantages of an Electric Vehicle far surpass those of a conventional vehicle. On a cost/km basis, an electric vehicle performs at 1/10th the cost of traditional vehicles. Electric Vehicles are more digitally connected, and various aspects like charging and battery management can be controlled via a smartphone app. A conventional vehicle is a complex beast, requiring many components with thousands of moving parts to operate correctly. An electric vehicle in contrast has just three main components: An on-board AC-DC converter, Motor, and Battery and a significantly fewer number of moving parts. This reduces the maintenance costs and makes servicing simpler. Also, an efficient motor delivers a high torque giving the driver a quiet and smooth ride.

But even as an EV enthusiast, EV owner and an EV ecosystem stakeholder, it is always important to take a contrarian view and look at it from a different perspective. Study and user research in this space shows that the limited or Chinese imports is one of the biggest deterrents especially for institutional and fleet buyers. There are not even a handful options to serve the use cases which will push the scale. While we are all waiting with anticipated breaths for the new EV launches, scratching the surface leads to 2 insights – either expensive or either too low quality especially the battery or range. Also, despite the entry of many players into the energy storage field, battery technology still remains nascent and has to undergo a significant level of development in terms of cost and performance to make electric vehicles an attractive option for majority of the population. However, lack of associated charging infrastructural support remains the biggest obstacle to the adoption of electric vehicles in India. Eliminating policy uncertainty, bringing about clarity over AC versus DC charging stations and ensuring grid stability can boost the development of the same and do wonders in curbing range anxiety.

New ideas need newer ways of implementation especially when an ecosystem is involved. The standard route of tendering (or the way it is run today) is bound to tip the scales against newer ideas. The idea of this article was to take a guarded approach to the huge noise around EV. While noise brings in attention and positivism, it is the work of those who chip away in silence that will bring in the change.

Article By
Mr. Maxson Lewis, MD of Magenta Power.

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