The future of mobility is at a crucial point of modulation. Every time there is a climate change or spike in the oil prices is discussed and debated, EVs (Electric Vehicle) are inevitably stated as a part of the solution. Yet, despite various Indian entities entering the space of EVs, they are not yet mainstream. What is the future of EV in India? This article will travel to find that answer.
Why Have EVs Seen Limited Adoption As Of Now?
Despite the release of products by incumbent Original Equipment Manufacturers (OEMs) and the latest players, the EV penetration is very low at 0.8%. The split of complete EVs in India, by three-wheelers, two-wheelers, and four-wheelers, is 79%, 17%, 4% respectively. The cause for the failure can be looked at under the following parameters. We need to learn about those reasons to understand the future of EV in this country.
Lack Of Product Innovation
One of the primary reasons for the limited adoption of electric vehicles can be pointed at the lack of innovation on the product line. So far, entities failed to highlight the practicality of an electric vehicle for the value-conscious Indian users. Sustainable performance was not constructed into the product and EVs failed to offer a satisfactory range that is ideal for inter city travel. Lack of charging framework is popularly thought to be the number one cause for the low adoption of the electric vehicles in this country. However, while it is one of the main reasons, it is not the only reason that limits the success of EVs. Instead, it is the paucity of customer-first and appealing items despite the premium being charged for EVs.
For four-wheelers and two-wheelers, EVs are sold at a 50% and 20% premium respectively in comparison to the Internal Combustion (IC) automobiles. This high selling cost is not favorable for the value-aware Indian users who would rather choose a cheaper IC vehicle. With the rise in the size of the automobile, the price of delta rises too. For instance, while a two-wheeler EV will break even with the IC counterpart at nearly 15000 km, a 4W requires roughly 1 lakh km to break even. To add to the high upfront cost issues is the painfully low penetration of limited clarity and financing on the resale value of EVs.
Swapping Infrastructure Or Scarcity Of Charging
This arrives as no surprise. For six lakh EVs on the road presently, we have approximately 2,000 public charging stations. This bad density of the charging stations is restricting the ease of EV usage. Scarcity of charger and battery standardization that is coupled with the high capital intensity of setting up swapping or charging stations has developed as a major infrastructural bottleneck.
Future Of EV: They Are Finally Ready To Take Off
When we talk about the future of EV, this instance is a must to state. In September 2021, Ola Electric sold e-scooters of 1,100 crores worth in just two days in India. At a cost of nearly 1.3 lakh for each scooter, this translates to a sale of close to 85,000 e-scooters. Compared to the total number of EVs on the road which is nearly six lakhs, this is a sizable quantity for just two-day sales which is an indicator that there is a fundamental alteration in consumer behavior and a rising inclination towards electric vehicles.
While the narrative presently is still largely the same as that two decades back which is the prominently lower total cost of ownership for EVs, required to decrease the reliance of India on crude oil imports, and the dimension of climate change and sustainability, here are some key developments propelling the future of EV through its adoption.
Development In Product Innovation
People do not purchase a Tesla because they want to purchase an electric vehicle. They do so as they desire to purchase a Tesla. And what makes this company what it is? It is their product. Broadly, we can see big changes with respect to the practicality provided by EVs of the present day.
Practicality takes into account the pricing and the range of the vehicle. Vehicle range has drastically enhanced owing to prominent development in battery chemistry. Moreover, Lithium-ion values witnessed a 98 percent dip over the last three decades, of which a 90 percent decrease took place in the last decade alone. This resulted in a great drop in the prices of manufacturing batteries. And since the battery creates 25% to 40% of the cost of a vehicle, the price of EVs has also seen a fall.
New Model Alert: Full Stack Approach
Historically, automotive has taken a vertical-focused business model. Entities manufactured and marketed the automobiles, but did not get into servicing, retailing, or fuel infrastructure. New age OEMs are turning full-stack. Businesses are now going beyond distribution and manufacturing, and selling directly to consumers, setting up charging infrastructure, and offering financing options. This is the primary thing to accelerate initial adoption as users are assured of financing and charging infrastructure support. The full-stack approach is going to have a crucial role in helping EVs attain critical mass on Indian roads. However, in the future of EV, OEMs might begin verticalizing by hiving off the charging business to a separate organization in collaboration with other strategic partners.
We have witnessed enormous alterations, mainly in technology, but also in the attitude of individuals towards the effects of vehicles on the environment and other portability solutions, from the very first electric vehicle that was set up in 1837 up to right now. Even though the electric vehicle industry is at present a rewarding objective for new businesses and organizations in India, there are a few hurdles in its mass production covering electric vehicles locally being one of them. In this article along with the issues, we have also spoken about the future of Ev in India.