The success of the electric vehicle (EV) industry is of paramount importance for India’s 2070 net zero target. Only when a good share of India’s vehicular fleet shifts from internal combustible engines to electric would the automobile and transport sector begin to become cleaner. The EV sector in India holds tremendous potential. Backed by the Central Government’s progressive policies, the EV sector witnessed sharp growth in FY23. While over 47000 electric passenger vehicles got sold in the four-wheeler segment, the electric three-wheeler vehicles accounted for 34% of total EV sales. However, the most important sign of the growing acceptance of EVs amongst consumers is the 2.5-fold jump in electric two-wheeler sales from FY22 to FY23. In 2021-2022, electric two-wheeler (e2W) sales rose from around 3.27 lakh units to a staggering 8.46 lakh units. The sales growth of e2W showcases the real acceptance of EVs by the common man.
The e2Ws has to meet public expectations of delivering good range for an extended period of time without compromising on speed and ride quality. Unlike four-wheelers and three-wheelers, the space and technology management in e2W has to be done more effectively. Unlike cars and rickshaws, two-wheelers do not have the advantages of space to hold a larger battery pack.
India has over 21 crore registered two-wheelers. The sector also holds around three-fourth share of the automobile market. Two-wheeler remains the biggest mode of commuting for the common man. Thus, a 2.5-times growth for any two-wheeler sub-segment in a year is a clear sign of its growing acceptability in the consumer market.
Despite the strong growth numbers, the EV industry continues to be in its nascent stage, and understandably so. It is important that amidst all international turbulence the sector continues its growth momentum. The current growth spurt is largely backed by various policies introduced by the Indian Government to drive demand by incentivizing purchase of EVs.
Towards self-reliance
While the Government incentives have worked well for the sector, EVs have to gradually decrease the reliance on direct financial support in the long term. To steer the EV industry towards self-reliance, the current EV ecosystem has to transform. Committed action from the private sector and enabling policies from the Government are essential to drive this transformation. To mature the sector to the next level, ecosystem development needs to be focused upon. This essentially includes developing R&D and innovation capabilities which should also lead to technology and knowledge sharing from global organizations.
Resource training and upskilling is another major step towards a long-lasting EV economy. Technology development and knowledge sharing have to be increasingly promoted. A robust ecosystem will attract people and drive demand. By the time the sector matures, these measures will be of critical importance that will drive demand for the industry.
Key role for private sector
There are key areas where the private industry needs to play a leading role. The private sector should take ownership of driving research and development around various EV and battery making technologies so that more compact, powerful, efficient, and safer EV technologies emerge. The e2W is a perfect ecosystem to innovate and test such technologies. EV solutions that can address range, safety, and cost concerns in the limited two-wheeler space will definitely disrupt the four-wheeler market as well.
Emerging EV technologies have to address yet another key challenge which is to reduce the battery charging time for EVs. Reduced EV charging time will drive customer confidence in the sector. It is worth mentioning here that for the EV industry, especially for the two-wheelers segment, prioritizing technology investments is important for multiple reasons. The two-wheeler is the largest automotive segment and engages a huge working population. Therefore, advancement in automotive technology is not only important to deliver better products but also critical to empower a huge population base to help them get more done at a lower cost while fulfilling their growth aspirations and helping them achieve self-reliance.
The private sector should also reiterate its commitment to ‘Make-in-India’ and hold onto local manufacturing with resilience. The economic activity driven by local manufacturing will not only develop a complete ecosystem to establish India’s position as a global EV hub but also build trust and reliance amongst local stakeholders and the government. From the policy side, creative and incentivizing policies to ensure manufacturing of EV batteries, semiconductors, and other components as well as domestic production and delivery of raw materials will play a critical role in promoting local manufacturing of EVs.
Energy security
India’s energy security is critical to power the EV sector and drive its success. India is doing well in shifting its reliance from coal based power generation to electricity generation through renewable energy sources. India needs effective strategies to leverage solar energy for benefiting the EV sector. A stronger solar power generation policy will increase net power generation and reduce the cost of electricity. It will also drive the need to have stronger and smarter grids. The excess generation of power through solar PVs would flow to the grid during the day. A change in charging pattern from evening to daytime for EVs backed with better charging infrastructure will go a long way in reducing emissions due to automobile sector as well as address EV charging anxieties experienced by the consumer.
Steering the EV industry to self-reliance would need a multidimensional approach, addressing several complex challenges. However, a self-reliant EV sector would be an outcome of a complete ecosystem transformation while proving to be beneficial for various other allied sectors and the economy at large.
(Disclaimer: Jeetender Sharma is Managing Director and founder of Okinawa Autotech. Views are personal)
