Mass adoption of EVs quite some time away in India

Cost, range anxiety and lack of charging stations are deterrents for people buying electric vehicles

Should I buy an electric vehicle right now? Whether it is a two or four-wheeler is not the point here. But should I get myself an electric is the big question at the moment? And frankly, it is confusing as to which way to go.

Why should it be confusing? Three basic factors are deterring getting customers to think very hard if it is worth buying an EV in India: Firstly, the high cost of purchase and whether it will actually be worth the initial cost. Yes, fuel prices are going up but it might be a while before your investment in an EV is evened out by not using a petrol or diesel vehicle.

Secondly, range anxiety and thirdly, the lack of charging stations and what if one does not charge it and the vehicle stops cold halfway in the middle of your destination.

For the third worry, there is always the option of being disciplined and checking the remaining battery charge and calculating the distance one intends to travel and top up the charge. But, particularly in the case of electric cars, the range can go down if the air-conditioner is switched on or more people get in (which means more weight and more battery power is used). There are variables that could bring down the range. And these are things the customer should be aware of.

Coming to the public charging infrastructure, even if there are a lot of them, it is going to take significant time to charge the battery. This means that there will be a long line at the charging station and considerable time will be lost in the whole exercise. One solution is battery swapping. Go to the swapping station, remove the discharged battery, take a charged one, put it in and off you go. But again, this infrastructure will all have to come up and it is not going to be easy. Luckily, the big players and start-ups have all begun to invest money and efforts in building charging infrastructure. But surely, it is going to take time for that large scale infrastructure to be ready.

Automobile companies are offering to install charging points at the home of the customer. Assuming that you are the kind who carefully calculates how much you are going to travel in a day and diligently charges the vehicle the previous night, there are other kinds of problems that can crop up. If you are living in an independent house, there is no problem. But in apartment parking spaces, the electricity is all common. The other residents will have every right to object to one person drawing electricity from the common area. Such issues will have to be addressed before we think of going all out on electric vehicles.

Assuming that the charging infrastructure is all up and running, we need to stop for a moment and think how our electricity is being produced. Let us assume the scenario in which Indians are largely using EVs and the demand for electricity goes up. Considering that about 75 per cent of our electricity production is thermal, how is it going to serve the purpose? We will be reducing tailpipe emission but we will also be polluting the environment more somewhere else.

The government may have ambitious plans with the FAME II and bring in electrification as soon as possible but the Covid-19 has shifted all the focus to the pandemic for now.

Even in the Union Budget, Finance Minister Nirmala Sitharaman announced that a scrappage policy would be announced soon to give a boost to the industry. All that is great for the internal combustion engine vehicles, but it remains to be seen if there is any incentive given to the customer to go in for a newer vehicle and more importantly, an EV.

Currently, some state governments like Delhi are giving subsidies for EV buyers. However, many other states do not seem to be doing enough to incentivise customers to purchase EVs.

However, as one industry executive had told this author, subsidies are not the way to get people to buy EVs at lower costs. The way to do that is through volumes. To reduce costs, the first thing is that the price of the lithium-ion batteries must come down because it contributes to about one half of the cost of the vehicle.

There is virtually no lithium-ion battery manufacturing in India and importing batteries is expensive. Industry executives feel that battery manufacturing should be incentivised so that the benefit of the reduced final cost of the car can be passed on to the customer.

At the end of the day, mass adoption of EVs is going to take time. No manufacturer is going to start manufacturing unless they see volumes and profit in it. And it is tougher for cars. Bringing in completely built units (CBUs) raises the cost by more than 100 per cent. In this scenario, how is mass adoption of EVs going to happen? One wonders.