Charting the roadmap for global EV leadership - How can India be the poster child for sustainable mobility?
Author: Jijimon Chandran
Over the last decade, the rise of Electric Vehicles (EVs) has been one of the most visible changes globally toward a sustainable future. In 2021 alone, nearly 10% of all cars sold globally were electric vehicles. Though the concept was around for decades, it has seen unprecedented adoption from nearly all major automakers in the last couple of years and even witnessed fully EV brands like Tesla catapulting to become one of the world's most valued businesses. India’s rise to become a global powerhouse in manufacturing and economic growth over pretty much the same timeline as EVs makes it a market with perhaps the biggest potential for EV adoption. In fact, India is one of the few countries that adopted a pledge in 2021 at the United Nations Environment Program to ensure that at least 30% of all vehicles sold in the country by 2030 will be EVs.
But as of today, India’s share of the global EV market is just hovering around 3% while markets like China already command over 30%. While the numbers are not in our favor today, there is a huge opportunity for India to build a solid foundation for growth as we are in a nascent stage. Rather than building the ecosystem after sales of EVs dominate over those of traditional ICEs, India must push towards investing in a nationwide framework for a smooth transition to electric vehicles. Let us explore 4 areas where India must strengthen its basics to ensure that it becomes a leader in sustainable mobility through deep EV penetration among the masses.
Charging infrastructure
Range anxiety continues to be the dominating factor that keeps consumers away from EVs. The western world has put in place considerable infrastructure guidelines which go as far as mandating every new residential or commercial construction project to provide EV charging points for a designated number of parking slots. As construction activity picks up pace post the pandemic blues, India must adopt a similar policy to eventually build up its domestic charging infrastructure. To meet ambitious targets, there is a need for fast action. At the current pace, India could achieve a sales figure of at least 5 crores of EVs on the road by 2030. But to ensure the momentum sustains, India needs at least 20 lakh charging stations to be built in the same timeline. While it is not possible for government agencies at the central and state levels alone to invest and build charging points, they can certainly create a favorable investment climate for private parties to build, operate and monetize EV charging stations. Tax incentives, flexible credit lines with low interest, joint campaigns, and awareness programs are some of the best ways to eventually instill confidence in consumers to shift their purchasing options toward EVs.
Affordability
Presently electricity is a very economical option for consumers to cover their running costs when compared to traditional fossil fuels which have been raking at all-time highs owing to multiple reasons. But the real challenge for mass adoption of EVs among consumers is the cost of the vehicles themselves. India is a growing economy with a large population still at the lower end of the economic spectrum when compared to developed nations. Prices of electric vehicles need to come down significantly if they are to be considered a viable option for the average Indian consumer. While the government has done a good job in incentivizing EV adoption with tax breaks, it must bring in more policies that enable both domestic and global brands to manufacture their end-to-end EV products in India and pass on localization benefits to consumers in the form of lower prices. It is not just the vehicle alone, but all core components like batteries, semiconductors, charging equipment, manufacturing equipment, etc. should all get favorable tax propositions if manufactured locally. This will also serve as a trigger for bigger investments into manufacturing facilities and ultimately more job creation.
Facilitate a responsive supply chain
China’s dominance in the global EV space was primarily due it its prowess in setting up the necessary supply chain ecosystem within its borders. From minerals for batteries to testing and validation centers, India could take a big leaf from the Chinese market and adopt policies that favor low-cost extraction and production of minerals and resources needed to build the basics of EV infrastructure. Another aim should be to reduce the dependence on imported components like semiconductors, heavy manufacturing equipment, control units, batter components, etc. In the wake of events like COVID and the Russia-Ukraine war, global supply chains can be severely disrupted. Facing a shortage of essentials can negatively impact the progress made so far if delays become frequent. More support for localized sourcing and extension of tax and capital support for allied industries in the EV segment will help in building India’s own self-sustaining supply chain. This will ultimately lower prices and improve customer experience.
Innovation and R&D
For any industry to progress into a mainstream entity, there is a huge effort needed on the R&D front. Traditional automobiles running on ICEs evolved to where it is today only because companies and countries supported investment to the tune of trillions of dollars across decades to improve the features and working experience of automobiles through innovative approaches. India can emulate a similar feat for rapidly scaling innovative research around the EV domain. This would mean support for investments into startups and companies that work on improving battery performance, programs, and initiatives to develop core technical career skills in the EV space and guarding intellectual property rights for innovations so that Indian innovators get recognized globally while the technology is able to collectively improve EV standards worldwide. Additionally, India can come up with
revolutionary technology frameworks that allow easy onboarding of businesses that wish to partner in building a sustainable charging infrastructure throughout the country. Just like how UPI democratized payment in the country a similar open technology framework can easily govern interoperability and revenue sharing for different stakeholders to create a winning experience for all.
The 4 focus areas outlined here have very intricate compositions internally that require nurturing initiatives. The key to building a successful roadmap to build capabilities and strengths in each of these areas is to foster co-creation with stakeholders from across the world. By sharing best practices, leveraging joint development initiatives, and raising capital together, the EV industry in India can truly witness a revolution in scale and adoption over the coming years. Uniting their efforts will be world-class technology solutions built by focused players like Acsia. From intelligent power management to connected vehicle experiences and autonomous driving, EVs will need to break new barriers of creature comfort, convenience, and driving experiences if they are to really drive a significant market share away from ICE.
EVs will certainly be a transformative force in India’s growth to be the world’s best economy. Enabling a seamless transition for EVs to dominate our roads require efforts toward empowering co-creation in infrastructure, technology, and connected ecosystems. By ensuring sustainable growth, India can certainly play a bigger role in making the world a better place to live for future generations.