Why India’s Electric Vehicle Plan Should Be Different from China

India wants to go 100 percent electric with its vehicles by 2030, but the industry isn’t sold on that idea.

The Indian auto industry has spoken in unison. The country’s ambitions to fully electrify vehicles by 2030 will come to nought, zilch, or in simple words nothing. Speaking on the sidelines of a heightened debate on the scope of electric vehicles, many industry experts and automakers expressed their confusion on where India is headed.

What hasn’t helped their cause are contradictory statements made by the country’s governing bodies. After asking automakers to look at going 100 percent electric by 2030, the same regime came out in public and suggested that India doesn’t need any electric vehicle policies.

This cacophony, as rightly put by one of the panelists at the event is not what India needs. “We need a Zubin Mehta to orchestrate how the future of mobility in India can be served with clean energy,” says the panelist who didn’t want to be named.

India is Not Like China

Let’s stop looking at what India’s neighbours have done over the past decade. India as a geographic and demographic strata functions in different ways, and that logic stands its ground in this subject as well.

In fact, India has always been a country that’s run on the shared mobility model. “Indians have mastered shared mobility for years. A 35-seat bus fits more than 60 people. Autos carry 15 people when they have space for 5,” said another analyst present at the event.

Challenges for EVs in India

• Prices are high; not only cars but raw materials like cobalt for batteries
• Most components for EVs need to be imported
• Range of current EVs limited between 80 and 100 Km
• Infrastructural support; battery, charging stations lacking

While this model has been catapulted in its modern avatar by platforms like Uber, Ola and Shuttl among others, most of the segment exists because of people who can’t afford to buy cars.

This candid statement might pinch a few, but it’s hard to disagree when most of the population in India exists in the middle-income and lower than middle income segment.

There was a unanimous call for the country to have a technology-agnostic approach with going for clean energy-powered vehicles.

Experts point out that 85 percent electrification in India is generated via coal right now, with an installed capacity of 300 gigawatts being the country’s existing reality. 

The Indian government needs to look at various options towards electrification, and not just solely rely on electric cars as the go-to mode for vehicles. The other big difference between India and China is its overall funding acumen to support the cause.

For over a decade China managed to fund its subsidies with billions invested, that encouraged people to buy EVs and yet they’ve got a market share of less than 2 percent. For India to make such investments with small returns on offer, would never work out.

Numbers Do the Talking

Buying an electric vehicle in India is a costly affair right now. You’re spending anywhere close to $15,000 (Rs 10.2 lakh approx) to $20,000 (Rs 13.6 lakh) for cars like the Mahindra E2O or the eVerito, which aren’t value for money compared to the petrol or diesel cars at those price points.

For the buyer, he’s still got no incentive (apart from his environment-conscious mindset) to switch to electric. The return on investment (ROI) period for an EV is pegged at more than 10 years by analysts and this is where they believe, it doesn’t come out as an economical option.

India as a country is geographically spread across 3.2 million sq km, as emphasised by one expert. “And when you consider our current state of electricity supply for regular use-case, how can anyone expect EVs to become a viable source of daily commute.”

Someone in the audience suggested using solar energy to generate electricity, to which one analyst said that the per unit cost of solar electricity costs Rs 16, while the same from thermal power, like NTPC, comes to Rs 2-3 per unit.

All this points to a need for a different tax model that caters to needs in the form of subsidies and other benefits.

It’s also intriguing to see that the government, which has been pushing for the electric revolution, hasn’t been publicly endorsing itself. “Out of 10,000 EVs alloted to the govt, only 250 of them are running on the road. That's 2.5 percent of the total number,” one analyst cited this as a concern and how reality stands within the ministry itself.

How can one expect a regular tax-paying consumer to go electric when the ministers aren’t sold on the idea itself. But that’s not all, even those asking for public transport to go electric, one of the experts pointed out the the cost of ownership for buses in the country.

While a regular CNG bus comes at a cost of Rs 70 lakh, the same in the electric avatar will pinch their pockets to the tune of Rs 2.5 crore.

Still puzzled why India hasn’t gone electric? These numbers couldn’t make this point any clearer. Having said that India’s electric dream isn’t completely up in smoke, yet the industry believes we should look at making a change, just not a wholesome one.