Mobility Blog

Where is India on the global EV map?

Where is India on the global EV map?

Enterprises play a crucial role in meeting India's 2030 environment targets. And Electric Vehicles (EVs) are the drivers of change. There is significant ramping of both vehicle availability as well as the infrastructure to accommodate the shift to electric mobility. But where does India stand on the global front, when it comes to the adoption of electric mobility? Let's find out.

Global outlook

Countries like Norway have taken the lead in getting the pieces in place to enable mass uptake of electric vehicles. By the end of 2020, the country already had 17.2% of all cars in use being electric, and nearly 75% of all new vehicles being sold were plug-ins. Sweden is next in line with EVs at 4% of all cars. 
In 2019, plug-in vehicle sales had already captured a 2.5% market share. By mid-2020, 18% of all passenger cars sold in the EU were PEVs or hybrids, and by the end of the year, 10 million plug-in vehicles were cumulatively sold worldwide.

These figures point to an increasing trend towards a shift in electric vehicle preference. To boost sales, many countries have introduced policies to enable the shift to electric. New Zealand offers cash rebates for buyers opting to go with EVs while Norway has introduced tax bonuses to make electric vehicles just as competitive as conventional vehicles. To bolster the ecosystem, the US announced USD 7.5 billion towards an EV charging network across the country, and the UK offers a cash discount on EVs within certain brackets.

As with every new technology ecosystem, certain skill sets are needed across verticals and participating industries. Filling in roles takes time. The uptake of EVs may partly depend on skilled resources being available to manufacture and service technologically advanced electric vehicles. The availability of skilled manpower may drive costs upwards, at least during the initial stages of EV penetration.

But on the running cost front, EVs paint a bright picture. EV service and maintenance is estimated to be 30% cheaper than conventional engines. This will benefit drivers and organizations switching to plug-ins, keeping financial concerns at bay.

Indian context

India's commitments to the Paris Climate Agreement cover high EV ambitions. EVs are projected to constitute 70% and 30% of commercial and private vehicles sales respectively, by 2030. Meeting these impressive targets will require a concerted effort to get the infrastructure for electric vehicles in place and ensure affordable mass production of EVs. Let’s look at the initiatives which could enable this. 

  • National Electric Mobility Mission Plan (NEMMP): The NEMMP frames the vision and outlines the roadmap with certain milestones, to accelerate Indian industry towards the development of electric vehicles. The plan includes pursuing the development of hybrid vehicles, a path towards sustainable and cleaner technologies.
    In India, the NEMMP covers electric vehicle types across plug-ins, technologies like motors, charging method and even fixed vs. swappable batteries.

  • State and city EV initiatives: Many forward-looking states have rolled out EV policies to actively push and prioritize uptake. While some target public transportation, the scale of procurement can drive demand and push for the development of EV-associated technology.
    Regional and local governments have put in place manufacturing side and infrastructure targets, with various incentives like tax breaks, road-tax exemptions, free permits for fleet drivers, free parking and toll exemption, to encourage all stakeholders to consider EVs. Here are some of these incentives [1]:

    • Central Government: The Department of Heavy Industries has initiated a policy called Faster Adoption and Manufacturing of Hybrid and Electric vehicles (updated in 2019 to FAME-II) to further incentivize EV adoption in addition to state incentives.
      - 4-Wheelers: Up to Rs. 10,000 per kWh of battery capacity capped at Rs. 1,50,000
      - All EVs attract a lower GST tax rate of only 5%
      The benefits under the FAME-II initiative may vary from state to state. 

    • Delhi has an EV policy incentivises 4-Wheelers, buyers are incentivised with Rs. 10,000 per kWh of battery capacity capped at Rs. 1,50,000.

    • Maharashtra offers 4-Wheeler buyers up to Rs. 1,50,000, an early bird benefit of a similar amount and Rs.25,000 for scrappage.

    • Gujarat incentivizes 4-Wheeler buyers with Rs. 10,000 per kWh of battery capacity capped at Rs. 1,50,000. The state also exempts registration and road tax fees.

    • Karnataka, Telangana and Andhra Pradesh offer registration and road tax fee exemptions.

For all stakeholders, these are attractive benefits, that could accelerate environmental and sustainability initiatives across Indian states.

  • Air pollution in Indian cities: Poor air quality has been a growing concern, especially in India. To mitigate this issue, cities have had to take measures that restrict the number of vehicles on the road, during periods of remarkably high air pollution caused by emissions and particles. A pan-India survey[2] showed that 68% of respondents indicated that switching to electric vehicles will aid in reducing air pollution. This in itself could be a converting factor, to get individuals and enterprises to look at EVs as the ideal mobility option.

  • Charging infrastructure: Around 43% of respondents believe EV charging will be a problem, while 20% raised concerns about long-distance travel. EV adoption might hit a roadblock if the necessary infrastructure isn’t rolled out rapidly. While slow charging (3-4 kW) units may only suit residential purposes or such long-duration car-parking sites, high-speed chargers (in the 50-100 kW range) are significantly more expensive. Making these available at business complexes and public locations would require considerable investment, besides electricity distribution infrastructure upgrades.
    Thankfully, the right policies can help. Setting up public charging stations is a de-licensed activity. This means that entities willing to follow the standards and technical specifications defined by the Central Electricity Authority and by the Ministry of Power, will be able to invest in a range of charging solutions, to meet local conditions and requirements. Businesses can now invest in employee-specific requirements at office locations, and employees can install cost-efficient charging stations at their homes. A survey [3] also captures respondents suggesting that EV manufacturers should display a list of compatible public charging stations in cities where EVs are available. 

  • Running cost advantages: EVs come in various models, ranging from daily commute vehicles to more luxurious forms, with high-capacity batteries. The primary advantage of opting for one is the running cost. A light run-about EV requires 10 energy units to charge at 40 INR (assuming 4 INR/unit) and give 100 kilometres of commute distance on that charge. That's a mere 40 paise per kilometre. A small ICE hatchback with a claimed fuel efficiency of 15 kilometres per litre, may require 6.6 litters of fuel. At about Rs. 100 per litre for a petrol engine, commuting a hundred kilometres would cost INR 666. A small EV would be over 16 times more cost-efficient to run than its ICE counterpart. This hugely benefits both, enterprises and employees, since operational cost savings on fleet vehicles at this scale frees up resources for better use.
    User considerations like the Total Cost of Ownership will surely come into play. Aspects like fuel savings and the cost of maintenance are key considerations for Indian drivers. Even though there may be some concerns about servicing and charging infrastructure for EVs, and the high upfront cost, EV sales hit 1.3% of total vehicle sales during the 2020-21 financial year. This trend is encouraging. But, Indian drivers will need to overcome a number of challenges and old ICE habits before EV purchases begin to become the norm. The tide may be set to turn. With nil and low upfront cost plans, getting electric cars on lease may be one of the most suitable options for professionals and for companies.

  • Enterprises going green: Since corporate employees contribute significantly to commuter traffic, there is an imminent need for local-level EV policies, electric car lease options and infrastructural targets. Electric car leasing is increasingly being taken up in metros like Delhi, Mumbai, Chennai, Kolkata, Bangalore, and Hyderabad, as awareness and infrastructure become readily available. 

With growing interest in EVs, and with authorities pushing for their awareness, production and infrastructure, first movers will reap the benefits. Company car lease policy changes should begin to reflect the push for electric vehicles, enabling employees to take advantage of every incentive or facility.

Businesses will need to plan their corporate car lease requirements keeping the larger EV agenda in perspective. A car leasing partner like ALD Automotive can ensure a smooth move to electric mobility for corporates. Op-ex or pay-as-you-go car leasing plans for businesses can offset concerns of large up-front costs normally associated with electric vehicle procurement, paving the way for enterprises to go electric.