• Parag Diwan

100% Electric Mobility by 2030 : Truth or Dare?

Does a goal of 100% E-Mobility by 2030 achievable?

A century has gone by since the invention of the internal combustion engine (ICE), but their over-dependence on hydro-carbon fuels has been a major source of GHG emissions — accounting for nearly one-fourth of total global energy related CO2 emissions.

In this context, electrification of transport can play a substantial role in mitigating emissions and achieving the decarbonization of the energy system. Therefore, the auto industry finds itself at a crossroads due to recent advancements in electric vehicles (EV), leading to the emergence of a whole new segment of low carbon footprint mobility. A move to an EV regime will be important in urban areas for short-distance private vehicles as well as public transportation and freight delivery vehicles.

An electric vehicle is expected to give better efficiency as it is 95% more efficient than an ICE automobile. EV has around 20 moving parts as against the 2,000 which go into a traditional automobile, thus substantially reducing the energy conversion losses.

The Electrical Vehicle Initiatives (EVI), a multi-government policy forum dedicated to accelerating the deployment of EVs worldwide, has set a collective aspiring goal for their member countries of a 30% EV market share by 2030. World over, electric vehicles are backed by a 30–40% subsidy, as the potential contribution of EVs to the decarbonization of the global economy is substantial.

Electric Vehicles in the Indian Context

In line with the worldwide initiative, India too cleared its EV policy recently which lays a grandiose plan of having 100% electric mobility by 2030. Through the policy framework, the Government of India stimulating automakers to move to 100% manufacturing of EVs, in the next decade and a half.

Currently, there are only very few manufacturers of EVs in India, the prominent being Mahindra & Mahindra with their acquisition of REVA has marched ahead in this technology. They stand to benefit in the long term, as the government has clearly started the mandate and regulations for automakers to follow and switch to alternate mobility based electric vehicle technology. There is an endeavor by India to get Tesla to establish a plant in India for higher-end EVs.

Reduction in Battery Cost a Major Driver

Battery cost may no longer be an issue given the falling battery prices. The price has fallen from $1000 to $600 per battery in 2012 to $250 in 2017 and likely to go down to as low as $100 by 2024 per kWh. Therefore, in the next 5 years, capital costs of EVs will be less than that of petrol vehicles — with acceptable range and operational costs at a fraction of that ICE based vehicles. It is very important for India to start a massive battery manufacturing program or else we would simply swap the crude oil import bill with a battery and associated sub-systems.

Creation of Battery Charging Infrastructure and its Grid Connectivity

One of the major hurdles in the adoption of EVs is likely to be the battery-charging infrastructure. Another possible show-stopper to the dominance of EVs can be India’s inability to generate enough electricity to propel its mobility. To encourage commuters to switch to electric cars without offering a subsidy and build a model that makes economic sense and at the same time enables it to scale early are vital in India’s scenario. This will require battery charging infrastructure to be connected to the power distribution system, perhaps using off-grid renewable energy sources.

Make in India in Volumes

To meet the audacious goal of 100% electric mobility by 2030, it is high time for India’s automotive industry to shift gears and build the EV production volumes that will provide economies of scale to bring down prices exponentially and enable personal electric vehicles, especially 2-wheelers available to the early adopters of this technology. This can be followed by cars for private use and commercial vehicles.

Global Renaissance of Electric Vehicles

Historically EVs have been around, although they could not get into the mainstream due to practical issues of range, speed, and cost-effectiveness. The 3rd generation of EVs today is marked by a significant upgrade in battery capacity and technology as well as a substantial reduction in the cost of ownership.

In 2016, over 750,000 sales marked record-high new electric car registrations worldwide.

The transition to electric road transport technologies is gaining momentum across the world, due to its perceived reduction in carbon footprint. The global stock of electric cars has exceeded 2 million as the popularity increases in many countries. Norway achieved the highest electric car market share globally (29%) in 2016. In fact, China paved way for extremely rapid market growth, from 100 thousand units in circulation in 2014 to 650 thousand units two years later. The provision of private and publicly accessible charging infrastructure has immensely helped this momentum. Last year, the number of publicly accessible charging points last reached 320,000 units globally, representing a 72% growth since 2015. These successes are driven by the multiple benefits EVs can bring to countries and their citizens: energy security, better urban air quality, reduction in noise pollution, and greenhouse gas mitigation.

Rapid Growth in Global EV stock

In the next 10 to 20 years, the electric vehicle market is likely to transition from early adopters to mass-market adoption. From the indicators, by OEM and announcement of country targets, it seems to confirm these positive signals; signifying that cumulative electric car stock may range between 9 million and 20 million by 2020 and between 40 million and 70 million by 2025.

International Energy Agency Report, 2017: Global EV Outlook 2017

As the number of EVs increases, charging facilities and electricity consumption may impact the grid capacities and associated issues of the adequacy and quality of the power supply. EV propagation needs to be thought of in a way that manages these issues. One way is to promote synergies with variable renewable energy sources. EVs could allow greater integration of these energy sources in the power generation mix.

Can India Leapfrog to Electric Mobility?

Fast evolving technologies and engaging new business models for delivering new ways of mobility can potentially transform the world transportation scenario in years to come. The new mobility world order will be driven by the quest to have:-

Clean yet cost-effective mobility services

Creation of new jobs

Reduction on oil dependence

More efficient land use in cities

Improvement in public health

In this backdrop, India is uniquely positioned to leapfrog into the EV era of mobility due to a set of advantageous conditions and capabilities, be it IT and manufacturing, or PPP sector leadership, or even dynamic entrepreneurial culture wherein startups and new ventures in the mobility spaces are multiplying rapidly.

The confluence of low-cost technologies, smart design and integration, innovative business models, and supportive policies has established certain market segments to be economically viable today. Capturing those segments immediately can to a supportive foundation for the leap to happen.

NITI Ayog Report: May 2017: India Leaps Ahead: Transformative Mobility Solutions for All

As illustrated below, the right integration and pursuance of opportunities among the core areas present India a better chance to achieve mobility leapfrog. These groups include system integration, shared infrastructure development, and scale manufacturing.

Challenges in Achieving Full Electric Mobility by 2030

Battery Cost: One of the biggest challenges for the adoption of electric vehicles in India is its price. Therefore, the TCO (Total Cost of Ownership) of electric vehicles has to be comparable or only slightly higher than an IC powered vehicle for the price and operative cost-sensitive Indian owner. Therefore, one of the imperatives is to have a significant reduction in battery cost, which means it has to be made locally. In this context, the recent joint venture between Suzuki Motor Corp, Toshiba Corporation, and Denso Corporation to set up a lithium-ion battery unit in India augers a bright way forward for others to follow suit.

Subsystems and Components: On the other hand, the Indian auto components industry would have undergone a metamorphosis to supply many of the components and subsystems for EVs. Auto-ancillaries need to adapt, upgrade, and scale-up for the EV future under the “Make in India” program and seek preferential investments.

Charging Infrastructure: Biggest need of the nation, however, is to have to charge stations across the length and breadth of the country to allow for easy adoption of electric vehicles. A pilot has commenced in Delhi NCR to have 4000 charging stations shortly.

To conclude, a convergence of government policy, cost reduction, local technology upgrade, and charging infrastructure would be needed for India to achieve the audacious goal of 100% Electric Mobility by 2030. If nothing else, it will help kick-start the transition in the Indian automotive industry.

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Report by NITI Aayog and Rocky Mountain Institute, “India Leaps Ahead: Transformative mobility solutions for all.” May 2017

Report by IIM-A and CEPT University, Electric Vehicle Scenarios and a Roadmap for India.

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