With a one of its kind Bahi Khata aka Budget’19, Finance Minister Nirmala Sitharaman announced breakthrough policies that can prove to be a stepping stone for India to become a major EV (Electronic Vehicle) manufacturing hub in the future. From a major cut in GST (12% to 5%) to income tax deductions of about 1.5 lakh on interest so paid, our ledger is surely committed to giving a boost to this booming industry.
However, before we take you further on this journey, let us first understand what this upcoming form of disruption in the transportation industry has in baggage for us.
Have you heard of Electric Vehicles before?
Electric Vehicles or as one call them EVs, are vehicles that use energy stored in its rechargeable batteries which are recharged by electricity. The EVs consists of an electric motor instead of an internal combustion engine. The propulsion is done by an electric motor or traction motor, and the battery must be plugged into a charging station or wall outlet for charging.
There are numerous benefits of EVs, they are energy efficient, better for the environment, cheaper to maintain, cheaper to run, can boost indigenous manufacturing and create a new sector of employment. Thus, the Government of India has shown keen interest to make a major shift towards EVs. The target set by the Government is to have EVs share of 30% in new sales of cars and 2 wheelers by 2030. To achieve the target several initiatives have been taken by the government.
National Electric Mobility Mission Plan (NEMMP) was set up in 2013, to achieve fuel security by promoting electric and hybrid vehicles, the target of NEMMP is to have the sale of EVs and hybrid vehicles 6-7 Million by 2020 year on year. Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME) was launched to develop the market and demand for EVs and hybrid vehicles. FAME2 has been launched for the holistic development of the sector, from charging infrastructure to Research and Development.
What is the credibility of their “GREENness” ?
Today one of the major concerns of mankind is the protection of our environment. The problem of rapid global temperature increase has brought nations on one platform to take effective and necessary steps. India has made some serious commitments in the “Paris Climate Conference”, under the Intended Nationally Determined Contributions, India has committed to reducing the Emissions level by 33 to 35 percent by 2030 as compared to 2005. As per the World Health Organization report, 14 out of the 20 most polluted cities are in India, creating a major health risk to the people residing in these cities.
The transport sector is a major contributor to the menace of pollution in India. According to a study conducted by the System of Air Quality and Weather Forecasting And Research (SAFAR) 41% of pollution in Delhi is contributed by the transportation sector. Electric Vehicles do not emit carbon monoxide, NOx or particulate matters, their noise and vibration are also much less as compared to combustion engines. Thus, EVs can help India not just achieve its commitments of the Paris Deal but also provide better air for people living in cities and prevent them from toxic gases and diseases.
The idea that Electric Vehicles will be able to reduce pollution may seem astonishing and relieving but it has its challenges that need to be tackled. Firstly, the rise in Electric Vehicles would bring in a surge of demand for Electricity. If for EVs the electricity used is produced from fossil fuels, then the benefits of EVs get diluted because power generation from fossil fuels is itself a major source of pollution. Thus, what is necessary is that clean energy is used as a source of electricity for EVs.
India is still largely dependent on coal as a source of electricity, data of FY 2017-18 shows that 57.14% of electricity generated in-country was from coal. India has set up an ambitious target of installing 227 GW of renewable energy by 2022, but once the shift to Electric Vehicles gains momentum, India must speed its progress on Renewable Source of Energy. Then only Electric Vehicle’s full potential can be achieved holistically. However, many studies report that there could be a deviation in the targets achieved.
Can EVs boost our Economy?
Infrastructure and mobility have essential linkages for the efficient working of the Economy. With increasing urbanization and the need for interconnection, demand for vehicles is ever-growing. But the fuel requirements are met through imports which constitute about 86%. Crude oil imports account for 17.9% of total imports of India. With the volatility and uncertain of oil markets and import dependency, inflation, our currency fluctuates and depreciates creating an unfavorable environment for investors.
Electric vehicles are a great alternative to reduce our dependency and be self-sufficient. It has opportunities in production, the market which creates employment to 10 million. But the question lies if the production is localized or imported into the market. With poor technology and investment in battery manufacture, high imports in electronic goods and importantly growing China electric vehicles boom factor shows Indian manufacturers need more efforts.
Mahindra, Hyundai, Ather energy, Atom motors are some of the prominent Indian companies involved in electric vehicle manufacturing. In the battery production segment, there is a huge opportunity for the MSME sector. The challenge is the lithium carbonate which is to be imported to India. Recently, KABIL a consortium formed by the Ministry of Mines agreed on lithium carbonate imports from Bolivia.
While Electric Vehicles can be eco-friendly, batteries made of lithium carbonate, cobalt are raising alarms on the environmental and social externalities it has on the poor mining countries. Also, the battery manufacturing process emits dust, fumes, and toxins that pollute the nearby land and water. Recently IISER Pune* Researchers at IISER Pune has developed a covalent organic framework, a new porous material that can boost the storage capacity of a Li-ion battery to nearly twice that of commercially available ones. The need for such more advanced technologies to replace lithium-ion is the need of the hour.
*Indian Institutes of Science Education and Research
With a large number of electric vehicles float in India, we need huge investment in electric charging stations. The question of AC and DC charging points are debated for a long time now. While we are using AC presently it takes 3-4 hours while DC can take a fraction of it to charge. The challenge lies not only in building charging points quantitatively but also qualitatively so that it is reliable, capable enough to take the high load with multiple services like battery refurbishing and swap at the place.
With more than 60 percent of India’s electricity is thermal, Electric vehicles though decrease urban pollution but power plant vicinity and the overall environment continues to face the emission burden. In India, electricity is often uncertain, unconnected to remote areas with unstable grid network and technical issues concerning renewable energy to grid connection pose severe challenges. Also, India’s Distribution companies hold debts and are unable to satisfy the energy requirement of the whole country adequately.
Also, solar panels made up of semiconductors when discarded are hazardous and need recycling plants, proper waste management systems which otherwise are no green. Also alternatives like biofuels, synthetic fuels can be explored. Third Generation biofuels where electricity is produced from microorganisms, an example being butanol is carbon neutral. While the fourth-generation biofuel is carbon negative by sequestering carbon from genetically engineered crops.
From the above analysis, we can see that there is a huge scope for Electric vehicles in India. With adequate investment in research and development, renewable energy and reliable grids, EV can bring revolution in infrastructure, local manufacturing alongside tackling India’s pollution menace to an extent. For a cleaner transport system, EVs alone cannot be the solution. We need a comprehensive approach such as a well-articulated public transport with electric buses and app-based navigation transit systems which reduces traffic, increase productivity and reduce environmental footprint. With many hurdles and challenges of waste management, market creation, infrastructure, skilled workforce, India needs determined efforts in the road ahead to make a greater impact for a better tomorrow for people and planet.
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