The future is electric!

Though India is highly unlikely to meet the National Electric Mobility Mission Plan target of having six to seven million electric vehicles by 2020, the government is making optimistic plans. The Cabinet has approved a mission on electric mobility to be led by the NITI Aayog. The Union government's scheme, Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME), launched in 2015, is under revision to link electro-mobility with public transport strategy. The Union Ministry of Heavy Industries and Public Enterprises is supporting electric vehicle-based public transport in Delhi, Mumbai, Ahmedabad, Bengaluru, Jaipur, Lucknow, Hyderabad, Indore, Kolkata, Guwahati, and Srinagar. Energy Efficiency Services Limited (EESL), a joint venture company of public sector undertakings, is procuring 10,000 electric vehicles for government agencies from manufacturers in India.

This buzz has provoked SIAM to issue a white paper with a roadmap stating 40 per cent EV sales is possible by 2030 while aiming for a complete shift to EVs by 2047. But, all are not convinced. Mercedes-Benz India is reported to have urged the government not to rush with the all-EV push and foreclose better technology options. Toyota is reported to have said that a 100 per cent electric fleet by 2030 is not practical and is not the way forward. The Automotive Component Manufacturers Association of India has asked for a slow down.

Despite this scepticism, nearly all auto companies are building their EV portfolio. Though the current sales volume of EV is too low to excite or convince, the direction of change is certain. The Vahan Dashboard website of the Union Ministry of Road Transport and Highways shows that though battery-operated EVs (these are zero emission vehicles or ZEVs) were 0.05 per cent of the new vehicle sales in 2015, between 2015 and 2017, the total sale of all EVs, including hybrids, saw an impressive seven-fold increase—from 10,321 in 2015 to 72,482 in 2017. One-third of these were sold in Delhi.

Curiously, while established auto companies are warming up slowly to the idea of EV transition, lesser-known entities, including watchmakers like Ajanta and start-ups, are stoking the change. India's earliest electric car, Reva, was incubated in Chetan Maini's start-up in the mid-1990s before reaching the assembly line of the Mahindras. It continues to be India's only affordable ZEV.

A disruption

These are exciting and disruptive times in India. Replacing the deeply entrenched internal combustion engines (IC) with electric drive train is transformative. The most unexpected and early disruption came around 2012 from the informally made battery-operated e-rickshaws. These affordable ZEVs of the masses destabilised the auto rickshaws of original equipment manufacturers (OEMs). India is currently estimated to have 0.4 million electric two-wheelers and 0.1 million e-rickshaws, and only a few thousand electric cars. According to an October 2017 forecast of the EREP Market Research Series, if the total estimated future electric fleet size is represented as total battery storage capacity, the overall EV market for battery storage in India is likely to be 4.7 GW in 2022, and over 60 per cent of this capacity will be driven by e-rickshaws batteries. Such a spontaneous change of such a scale in the informal market is unknown even in the advanced markets.

The Indian auto industry cannot ignore the early signs anymore. Among car manufacturers, Mahindra already has electric variants in hatchback, sedan, light commercial van and SUV. Maruti Suzuki will have a joint venture with Toyota to produce small electric cars. Hyundai is developing all-electric passenger cars; Renault is bringing out its popular hatchback in electric; Honda, that expects EVs to be 65 per cent of its car sales by 2030, plans to set up a lithium-ion battery manufacturing facility in India; Nissan will launch its electric hatchback in 2018; Mercedes-Benz will bring electric cars from its global line up by 2020; Volkswagen, Volvo and Audi have announced electric variants; and, Tesla will also come to India.

Several electric two-wheeler producers including Hero Electric, Lohia Auto, Electrotherm, Avon, Indus, Tork Motorcycle and Ather Energy, are already selling. Honda, Bajaj Auto Ltd and TVS are promising new products by 2020. But electric two-wheeler sales have not picked up to the desired extent in India. Most models do not measure up to the consumer expectation of power and performance. A total of 19 of the 24 two-wheeler models in the market are low-speed scooters, with a maximum speed of 25 km/hour and maximum power output of less than 250 watts.

In the heavy-duty segment, BYD China has launched e-buses in India. Daimler, Volvo, Sia, Mann and Navistar are in advanced stages of testing prototypes and have the target to launch in India in 2020. Ashok Leyland and Tata Motors are also working on their prototypes. What path will India follow to allow prototypes to jump start to commercial scale?

Why zero emissions vehicles make sense in India?

India is desperate to curb air pollution, strengthen energy security and mitigate climate impacts. Electric vehicles (EVs) provide these co-benefits. Official estimates show that India with ambitious EVs can save about 64 per cent of energy demand for road transport, 37 per cent of carbon emissions by 2030 and save $60 billion in diesel and petrol costs by 2030. An initiative by the NITI Aayog, the Federation of Indian Chambers of Commerce and Industry and Rocky Mountain Institute estimates that with 100 per cent electrification, India can save Rs 20 lakh crore and one gigatonne of CO2 emissions.

There are worries that while fully battery-operated electric vehicles have zero tailpipe emissions on road, their life cycle emissions depend on the source of power generation—coal being the dirtiest compared to hydro and renewable energy. But the lifecycle emissions intensity of electric vehicles can reduce substantially with more renewable energy infusion, as per India's post-2020 climate action plans. The energy source of electricity can change flexibly if renewable energy expands. About 15 per cent of India's power is from hydro while renewables can expand to meet the target of 175 GW by 2022.

Moreover, a centralised energy generation to power vehicles opens up better opportunities for pollution control at the source than decentralised emission control of the numerous tailpipes of combustion engines. Delhi-based non-profit Centre for Science and Environment estimates that if all the vehicles (except trucks) were to run on electricity by 2030, the electricity consumed will be about 110 Terawatt-hour or about 5 per cent of the total electricity demand of India in 2030, as projected by the 2017 report of NITI Aayog. Likewise, the European Union estimates that EVs will consume 9-10 per cent of their total electricity demand by 2050, when 80 per cent of vehicles can be electric.