Intern’s Details

Name : Prakhar Kumar Singh

Email-ID : [email protected]
Smart Task No. : 3
Project Topic : Electric Vehicles - Techno-Commercial Analysis

Smart Task (Solution)

Task Q1: Make a list of challenges that the EV industry is facing in India. Challenges
faced by manufacturers, Govt and Consumers.

Task Q1 Solution: As per recent Industry reports published, India’s electric vehicle market
(EV) is estimated to emerge as a $7.09 billion opportunity by the year 2025. Furthermore, the
Indian government is also revamping measures with an aim to achieve 100% electric vehicle
mobility by 2030. In fact, the Indian EV market is anticipated to witness a robust CAGR growth
of 42.38%.

Some of the challenges EV makers are facing: -

BANK FINANCE
A strong bank finance mechanism is still missing in the country. Only a few banks like
SBI and Axis, to name a few, are offering loans on selected models. The government
should ask banks to offer loans on electric vehicles, which will augment sales.

Lack of Charging Stations and Challenges from the Grid Side

The Central Electricity Authority (CEA) reported that India had established 927 charging
stations nationwide as of June 2020. Since this is at a nascent stage, it is significantly
less when compared to the 57,000 petrol pumps which the country has across various
states. Furthermore, it is also reported that about 85% of charging of electric vehicles
takes place at the owner’s home, which becomes a daunting task for those living in
community apartments and have no reserved parking area.

Apart from this, the challenges which the grid might face when EVs become main-
stream in India are also a matter of concern. According to an industry analysis,
increased use of EVs by 2030 will shoot up the electricity demand by 100 TWh which is
yet to be streamlined. This lack of adequate charging infrastructure poses a severe
impact to garner substantial demands for electric vehicles in India and clouds the profit-
making strategies of foreign firms willing to expand in the country. Under such
circumstances, one can opt for a reliable India entry strategy consulting firm for a robust
India market entry strategy.

Lack of Trained Personnel

In addition to the problem of inefficient infrastructure, the lack of skilled personnel in
electric vehicle markets is a significant challenge that foreign investors have to deal
with. The Senior Executive Director (Engineering) at Maruti Suzuki also said that the EV
industry in India is still at its nascent stage, and almost every automobile organization
will face a challenge in areas of EV talent acquisition and development.
This makes it imperative for foreign firms expanding in India to avail assistance from a
reliable India entry strategy consulting firm that can offer a comprehensive human
resource development and talent acquisition strategy to scout for adequate experts on
designs, product, infrastructure and manage pay packages.

Supply-chain Problems
EV battery manufacturing in India is still largely dependent on imports due to the lack of
Lithium, and this poses a major hurdle for companies willing to invest in India’s EV
industry. The head of metals and mining of Bloomberg NEF, had said that though
companies in India are trying to prospect for stakes in overseas resources and are
transferring more raw material production chains in India, there is very little synergy as
the battery manufacturing capacity still demands adequate planning.

High Price of Electric Vehicles

Further, the average cost of electric cars in India is around INR 13 Lakh, much higher
than the average INR 5 Lakh for economical cars run on traditional fuel. Also, the price
of electric scooters and motorcycles in India is between the price range of INR 70K –
INR 1.25 Lakh, as compared to INR 30K – INR 40K cost range of ICE bikes and even
lower for scooters.

FAME Policy Flip-Flops

While no one doubts that the Indian government is doing all it can to push EVs, the
Faster Adoption and Manufacture Of (Hybrid) And Electric Vehicles (FAME) policy has
been criticized by the industry in the past. The government had initially focused on
vehicle standardization with FAME, which was sidelined for an emphasis on
manufacturing. At the moment, the government is busy drafting an EV charging
infrastructure framework.

Task Q2: Explain the success story of e-rickshaw in India. Can we completely replace
diesel auto by e-rickshaw (To-To) all over India? Justify your thoughts.

Task Q2 Solution: The e-rickshaw industry has now established itself as the
undisputed outlier of India’s auto sector. Amid the worst slowdown in vehicle sales, e-
rickshaw sales have grown unabated.
E-rickshaws are low maintenance, have a lower cost to operate than their petrol and
CNG counterparts. But more importantly, across North India, where deteriorating air
quality levels have made urban areas inhospitable, the emission-less e-rickshaw is
being hailed as the humble, homegrown agent of change to a cleaner, less fossil fuel
dependent India.
India’s million e-rickshaws make up the second-largest collection of electric vehicles in
the world. Only China’s fleet of several hundred million electric motorcycles and bicycles
is bigger.
According to a 2015 study on the pros and cons of e-rickshaws by Deepanjan
Majumdar and Tushar Jash, the average specific energy consumption of the e-
rickshaws has been found to be 53.76 kJ/passenger-km, which is the most efficient
among other forms of motorized transport. While regular auto-rickshaws use as much
as seven times as much.
Initially launched in Delhi during early 2010 with an objective to eventually phase out
physically taxing cycle rickshaws, the e-rickshaws presented themselves as an
affordable and clean mode of mobility that had the immense potential of bridging the
gap of first and last mile connectivity. In Delhi, these battery fitted three-wheelers were
able to provide the much needed first and last mile access to Delhi Metro, which
received a mixed response; while it was welcomed by the passengers, the lack of
regulation triggered concern for the authorities. The e-rickshaws were also spreading to
other Indian cities such as Lucknow, Amritsar, Ahmedabad, Kochi, etc. In case of cities
like Gaya and Jamshedpur, the e-rickshaws provided a para-transit solution for
connecting remote villages to cities. The spread and acceptance of the electric
rickshaws became inevitable. TERI is also working towards encouraging and
accelerating the adoption of four-wheeled passenger electric vehicles in India under
'Detailed Study on Promoting Electric Mobility in India’.
While e-rickshaws’ growth was sporadic, there wasn’t any clear regulatory framework
for the registration of these vehicles. In wake of the exponential growth and problems
such as congestion, the Government of India amended the Motor Vehicles Act (MVA) in
December 2015 and defined e-rickshaws and e-carts. Following the amendment,
authorities of Delhi, Gujarat, and Pondicherry came up with procedures to regularize
these vehicles.
In spite of being surrounded by an array of controversies such as fatal accidents caused
at unauthorized charging station and road accidents, e-rickshaws have witnessed an
unrestricted growth on Indian streets.

There are some restrictions in this complete transition from diesel auto to e-
rickshaw, few of those are: -
 Due to the regularization of the maximum vehicle speed and the maximum motor
capacity, the major challenge of the e-rickshaws would be to meet the present-day traffic
conditions. If these vehicles are allowed to travel with the main stream traffic, the speed
of the rest of the traffic will be restricted, as for the conventional vehicles the energy
efficient speed has been much higher. But there has been no proper rule to regularize
the operation of e-rickshaws. Till date the RTAs have not taken into account the case of
e-rickshaws as no rule has been included in the Motor Vehicles Act in the State unlike
that of Tripura Motor Vehicles Act.
 E-rickshaw rides will cost commuters more than diesel auto-rickshaw rides, as an e-
rickshaw can only accommodate four passengers, compared to eight in diesel auto-
rickshaws. Also, there will be problems if e-rickshaw drivers refuse long commutes and
that the onus is on the authorities to ensure this does not happen.
 Despite their mass deployment, there are several issues associated with the regulation
of e-rickshaws. Their components are imported from outside but are assembled in India.
These are usually non-standardized and assembled in local workshops without
complying with standards. Unorganized players sell 10,000 e-rickshaws a month against
1,500-2,000 a month for organized players. The e-rickshaws sold by unorganized sector
are of poor quality and operate on lead-acid battery that needs to be changed after every
six-eight month. The replacement cost per battery is Rs 25,000-Rs 28,000. The lead-
acid batteries are usually weighed close to 80 kilograms, which reduces vehicle mileage.
As the battery cannot be refurbished, an e-rickshaw owner typically returns it to the
vendor it has to run its life and used batteries are often disposed of carelessly, harming
the environment.

Task Q3: List the initiatives done by other countries in terms of EV. How can we
replicate that in India?
Task Q3 Solution: Numerous countries around the world are setting up electric car
initiatives to make them more accessible and widely available for use by the general
public, some of those are: -

 Germany’s Electric Car Initiative. The German government, in 2010, made

a major push to increase electric mobility. The German Chancellor met with a
number of officials within the government, science industry, and the energy and
automobile energy to learn how to streamline current electric mobility efforts in
the country. Because Germany was the first to build cars in the twentieth century,
they feel the importance to be the leading nation in the electric car initiative. The
government is funding $700 million into electric mobility test initiatives, including
plans for the development of a charging station infrastructure. Daimler, one of the
top automotive companies in Germany is not only creating hybrid cars, but also
hydrogen fuel cells.
 United States - China Electric Vehicles Initiative. In 2009, the Chinese
and American governments agreed at the Electric Vehicles Forum to increase
and work upon the shared interest in amplifying the use of electric vehicles to
eventually eliminate oil dependence as well as an overall reduction in
greenhouse gas emissions while, at the same time, promoting feasible economic
growth. The joint Electric Vehicle Initiative includes within a joint development
standard, a number of demonstration projects in a variety of cities in both the
United States and China, technical road mapping, and projects to disseminate
information to the general public.
 Taiwan Electric Car Initiative. 2009 saw the Taiwanese Ministry of
Economic Affairs make an announcement about the beginning of an electric car
industry research consortium. While the country currently provides subsidies for
those purchasing electric motorcycles, the government is set to create new
policies to promote the purchase of electric cars in the near future. Because of
Taiwan’s large electronics and information technology sectors, when mixed with
the automobile industry, Taiwan could prove to be a leader in the electric car
market.
 United Kingdom Electric Car Initiative. Not to be outdone, the United
Kingdom has come up with its own Electric Car Initiative. The United Kingdom-
based initiative seeks to make electric cars not only more attractive but more
affordable to drivers by providing incentives up to GBP 5000 toward the purchase
of plug-in or electric hybrid vehicles. The government also included another GBP
20 million to go towards the creation of a network of charging stations and the
establishment of “electric car cities” around the country. The cities selected will
service as a focal point for low-carbon and electric car demonstration projects.
 Australia Clean Driving Initiative. Clean Driving is a Canberra Region-
based initiative to assist those looking for a transportation solution that has zero
emissions, those wanting an electric vehicle, and of course, those looking to
assist in creating a sustainable future. Clean Driving promotes the benefits of
using electric vehicles, both in the wallet and for the environment. The objective
is to promote education on sustainable options for transportation.

Some of the measures we can take to replicate these initiatives start with, Modifying
and Streamlining FAME Phase 2, though the FAME Phase 2 framework seems to be on
the right track, the Government can enhance it with the addition of more incentives
under its ambit. Slashing GST on EVs to 5% is a great move, which must be
complemented by other tax benefits.
A case in point can be reduction of GST on battery charging services—from the
currently applicable 18% to 5%. Encouragement could be through incentives and
creation of a proper support ecosystem for scrapping of petrol or diesel vehicles.
Setting up a comprehensive EV policy is the need of the hour.
Also, The Government and all other stakeholders (especially manufacturers) should
make use of every feasible promotional and advertising platform to highlight the benefits
of EVs. Coverage, EV technology evangelization and informational campaigns across
different media—especially TV, online and print—can make a big impact. Outdoor
advertising and educational workshops are handy avenues.
To encourage local assembling of EVs, the Government must minimize import
duties on relevant EV components such as electric compressors, brake systems and
motor controllers, which are usually imported as pre-assembled sets. Products like
chargers, power control units and disassembled battery packs are similar examples.
Lastly lowering EV buying costs, at the moment, high EV prices are directly attributable
to the demand-supply factor and lack of a substantial domestic manufacturing base. As
a price-sensitive market, the majority of Indian buyers look forward to attractive prices. If
the suggestions made above are taken to proper fruition, customers will be the biggest
beneficiary when it comes to attractive EV pricing models.