The government of India launched an ambitious plan to transition to an all-electric vehicular (EV) fleet by 2030. This plan has revved up the Indian automotive industry, in line with the global trends, marking the end of internal combustion engines (ICE). It is evident from the recently concluded India Auto Expo, where most leading domestic and international automakers displayed electric vehicles - bus, cars, motorcycles, and scooters - that the transition to EV has taken off in India.
The driving forces for EV in India
Reduce ever-increasing fuel bill
India is the world's third largest oil importer; oil import bill is set to touch US$88 billion by 2017-18 increasing by 25% from US$70 billion in 2016-17 out of which 65-70% is used for transportation. By 2030, India oil import bill is pegged to reach US$300 billion causing a major concern for the India government. Accelerated adoption of electric vehicles could save US$60 billion in diesel and petrol costs while cutting down as much as one gigaton (GT) of carbon emissions for India by 2030.
Electric vehicles have zero emission. Through EV adoption, India could save 64% of energy demand for road transport and 37% or 1GT of carbon emissions by 2030.
Improvements in EV technology
Recent trends in the automobile industry indicate that the world is overtaken by the EV wave to replace ICE-vehicles. EV technology has undergone tremendous improvement over the years including: increase in range and battery storage capacity; better cost efficiencys; and shorter charge time. The cost of battery power has fallen from around US$1,000 per kWh in 2010 to around US$227 in 2016, and is expected to drop below US$200 per kWh by 2020.
India government initiatives
Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India, or FAME, is aimed at promoting the use of EVs in multimodal public transport to help lower pollution levels in urban areas. In order to accelerate the adoption of EVs, the government of India is offering incentives to cities with population of more than one million. Under FAME initiative, the central government is looking to offer incentives for the procurement of electric cars, city buses, as well as three-wheelers. The government is offering grants of US$16.2 million (INR105 Cr) to every selected city. Additional incentives of US$2.3 million will also be provided to each city for the construction of EV charging infrastructure. The criteria for short listing dictate that each city should have a population above one million, as per 2011 census. The incentives will be used only to buy electric buses, three-wheelers, and passenger cars running on new-generation batteries with traces of lead like lithium polymer, lithium iron phosphate, nickel metal hydride and zinc air, among others.
Components and outlay under FAME scheme
Component under FAME
India unveiled the 'National Electric Mobility Mission Plan (NEMMP) 2020' in 2013 to address the issue of national energy security, vehicular pollution and growth of domestic manufacturing capabilities. It aims to achieve national fuel security by promoting hybrid and electric vehicles in the country. There is an ambitious target to achieve 6-7 million sales of hybrid and electric vehicles year on year from 2020 onwards. NEMMP 2020 envisions the deployment of 5-7 million electric vehicles in the country by 2020; and 400,000 passenger battery electric cars (BEVs) saving 4 million tonnes of CO2 with a required investment of US$3 billion. With the support from the government, the cumulative sale is expected to reach 15-16 million by 2020
One of the main detriments for EV adoption is the expensive battery cost. In order to address this issue the government of India announced incentives for battery makers to set up more manufacturing units in India. The government is in talks with resource-rich countries to ensure supplies of raw materials such as lithium.
Opportunity for Taiwan
India's EV wave provides Taiwan component manufacturers a huge opportunity given Taiwan's leadership in electronics, and the matured and complete auto components manufacturing ecosystem. Industry leaders were thrilled to learn that pioneering EV technology including: Tesla's original technology and the successful Gogoro e-scooter were from Taiwan. While the Indian government - at both the central and state levels - is framing its own EV policies, they are looking up to Taiwan for its best practices. This symbiotic development in India's EV future opens up expansive collaborative opportunities between India and Taiwan:
*Indian automakers and components manufacturers/suppliers are all in their strategic planning stage for EV which makes it an ideal time for collaboration and exploring business opportunities
*Indian automakers and components manufacturers are looking for the basic EV components, namely: electric motor, controller, battery pack, charger, DC/DC converter, contactors.
*For Taiwan or any foreign component suppliers it is key to manufacture in India and have a JV/partnership with credible Indian entity. A strict anti-dumping policy and increased imports duties on auto components has been put in place in order to promote local manufacturing.
*For EV component manufacturers, it is critical that they have: Appetite to make in India; JV/partnership with Indian entity; robust R&D and clear roadmap in each of their manufactured product/field; strong service support/after sales support; and open for joint development(JDM) projects.
*Workshop/roadshow at automakers factory showcasing EV components solution and products and interaction with engineers. Workshop is welcomed by most automakers.
*Collaboration with thinktank and government departments, particularly departments of transport and non renewable energy, to help define India EV policies.
(Note: Jonathan Lalremruata is a consultant for India Market Entry. Jonathan is an alumnus of Taiwan's National Tsing Hua University and ITRI. He has over a decade of global experience in the ICT industry and specializes in India-Taiwan industrial collaboration. He can be reached at email@example.com)