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Cover Story | June 2018

Charging Up India's E-Mobility Revolution

With the regulatory landscape for automotive industry transforming globally, India is incentivising the shift to electric mobility. In fact, the world's sixth largest economy is making all the right moves to see that mostly electric vehicles (EVs) ply its roads by 2030.<br /> <br /> Amid the rise in crude oil prices, India's import bill of the commodity is estimated to surge by 20 per cent - to $105 billion-for the 2018-19 fiscal, an Oil Ministry report had said earlier this year. The rising oil prices have put the spotlight back on India's ambitious drive to go all-electric by 2030.<br /> <br /> India, the world's fourth largest automobile market, presently has anywhere between 100,000 and 150,000 electric vehicles (EVs) and the number is expected to grow by about 5 per cent in the next five years. Of about 24 million vehicles sold in India in 2017û18, EVs account for nearly 1 per cent of the total sales. In comparison, 777,000 electric and hybrid vehicles were sold in China in 2017 alone!<br /> <br /> To promote faster adoption of EVs in the country, the federal government recently approved green license plates bearing numbers in white fonts for private e-vehicles and yellow for taxis. Plans are afoot to permit youngsters in the age bracket of 16û18 years to drive electric scooters and mandate taxi aggregators to have a certain percentage of EVs in their fleet. Also, all public transport operators may be requisitioned to provide 1 per cent incremental electric fleet from 2020 onwards.<br /> <br /> Additionally, the Ministry of Road Transport and Highways has requested the Ministry of Finance that the rate of depreciation on EVs be allowed at 50 per cent as against the rate of 15 per cent for conventional vehicles. The proposals include reducing the GST on batteries to 12 per cent, to be at par with the GST on EVs.<br /> <br /> A 2017 joint study by the federal government think tank, NITI Aayog and Rocky Mountain Institute titled India's Energy Storage Mission: A Make-in-India Opportunity for Globally Competitive Battery Manufacturing indicates that India could represent more than one-third of the global EV battery demand by 2030, if the country meets its goals for a rapid transition to shared, connected, and electric mobility. &quot;India's EV mission could drive down global battery prices by as much as 16 per cent to $60 per kWh. Given the projected scale of its domestic market, India could support global-scale manufacturing facilities and eventually become an export hub for battery production,&quot; the report outlined.<br /> <br /> <span style="font-weight: bold;">Humongous growth opportunity</span><br /> India's imminent EV revolution presents immense growth opportunity for both domestic and global players.<br /> <br /> &quot;We see a big opportunity to grow fast in India as we are doing in other regions like China where the supporting incentive from the government has provided a strong push for both our customers and us. I believe the average global share of hybrid and electric vehicles will roughly be 25 per cent of the market by 2025,&quot; says <span style="font-weight: bold;">Giorgio Baccolis, Vice President Sales, BorgWarner,</span> the global producer of propulsion systems for combustion, hybrid, and electric vehicles. He feels that the figure would be somewhat similar in India too.<br /> <br /> <span style="font-weight: bold;">Christopher J Lanker, Vice President &amp; General Manager Asia, Emission &amp; Thermal Systems </span>fully endorses this view. &quot;Clearly, we see a lot of interest in electrification, from full hybrids to full electric vehicles. This is very good news for BorgWarner because we have products for traditional combustion engines, hybrid electric vehicles, and fully electric vehicles. We see this as an opportunity not only for ourselves and our consumers, but also for big cities and the environment,&quot; he adds. India's efforts at expanding its EV base fit well with the future plans of companies that propose to offer cleaner and energy-efficient products.<br /> <br /> The government has implemented the FAME India (Faster Adoption and Manufacturing of (Hybrid &amp;) Electric Vehicles in India) scheme, effective April 2015, to support the development of hybrid and electric vehicles and manufacturing ecosystem. The four key areas of the scheme include technology development, demand creation, pilot projects, and charging infrastructure.<br /> <br /> The scheme is aimed at incentivising different vehicle segments such as two-wheelers, three-wheeler autos, four-wheeler passenger vehicles, light commercial vehicles (LCVs), and buses. It covers hybrid and electric technologies like the mild hybrid, strong hybrid, plug-in hybrid, and battery EVs.<br /> <br /> &quot;In India, electrification has better prospects in the near term for a couple of reasons. One, due to favourable government's policies. Two, with urbanisation comes different societal problems, including pollution, that have to be dealt with. Three, beyond the charging issue, the current infrastructure supports electrification. If the charging issue can be solved, then there is really not much of a barrier,&quot; opines Bradley <span style="font-weight: bold;">Jay Maggart, President, Hitachi Automotive Systems Asia. </span>In his view, the only stumbling block could be affordability as, in general, the Indian consumers would agree to pay a premium price for these technologies only when they see economic benefits.<br /> <br /> <span style="font-weight: bold;">Saurabh Kumar, Managing Director, Energy Efficiency Services (EESL)</span> believes that the gains of switching over to EVs are already visible. &quot;In terms of savings for the consumer, if the EV is charged at Rs 8-10 per unit, the cost is less than Re 1 per kilometre as against Rs 5 per kilometre for petrol and Rs 4.5 for diesel.&quot; Kumar feels that the government has an important role to play in popularising electric mobility by facilitating the setting up of adequate charging infrastructure on pan-India basis.<br /> EESL was actively setting up charging infrastructure in government offices through its own National E-Mobility Programme. About 200 EVs are already deployed, out of which 150 are in Delhi and the rest in other states, ever since the rollout of the programme in March.<br /> <br /> <span style="font-weight: bold;">Incentivising the EV ecosystem</span><br /> Any activity involving transmission, distribution, or trading of electricity usually requires a license under the Act. However, in April, the government clarified that establishing charging stations for EVs would not require a separate license under the Electricity Act of 2003. &quot;The charging of battery essentially involves utilisation of electrical energy for its conversion to chemical energy, which gets stored in the battery. Thus, charging an EV battery at a charging station involves a service requiring consumption of electricity by the charging station and earning revenue for this purpose from the owner of the vehicle,&quot; the Ministry of Power noted in a statement. <br /> <br /> It was in an exclusive interview with POWER TODAY (April 2018) that Raj Kumar Singh, Minister of State for Power and New &amp; Renewable Energy first announced that charging stations would not require a separate license under the act. &quot;We have already liberalised the Electricity Act and it provides for franchisees. However, the charging station is not selling electricity, but giving you a service. It is actually buying the electricity from a distribution company,&quot; the minister had informed.<br /> <br /> The ministry arrived at this decision after holding extensive consultations with various stakeholders, including the Central Electricity Authority (CEA). The government is now in the process of finalising another category of technical requirements, which is likely to be announced soon.<br /> <br /> Clarity is expected on the charging protocol that India would be opting for between CHArge de MOve (CHAdeMO) and combined charging system (CCS). Globally, most countries use CCS as their primary standard. &quot;The Government of India through its various departments and agencies such as the Bureau of Indian Standards (BIS), Department of Heavy Industry, and NITI Aayog, is in the process of identifying and framing standards and guidelines for the right protocol. It looks like India would keep the standards open and market-driven,&quot; said <span style="font-weight: bold;">Amit Kumar, Partner, GRID, Energy &amp; Utilities, PwC.</span><br /> <br /> In October last year, when the government's Department of Heavy Industry invited expression of interest (EoI) from cities with over one million population and special category states for multi-modal transport, a requirement of 3,144 buses was received from 44 cities across 21 states.<br /> <br /> Eleven cities were eventually identified under the pilot phase of the FAME India scheme. They include Ahmedabad, Bengaluru, Delhi, Jaipur, Mumbai, Lucknow, Hyderabad, Indore, Kolkata, Jammu, and Guwahati. The government would be subsiding up to 60 per cent of the cost of electric buses purchased by these cities.<br /> <br /> The contract for the supply of electric buses was won by Tata Motors, Ashok Leyland, and a joint venture (JV) between Hyderabad-based Goldstone Infratech and China's biggest EV seller, BYD Auto Co. Tata Motors emerged the lowest bidder for contracts in Jaipur, Indore, Lucknow, Kolkata, Jammu, and Guwahati to supply 190 electric buses. Ashok Leyland bagged the contract for 40 electric buses in Ahmedabad. Goldstone Infratech's JV secured contracts to supply 290 electric buses to Bengaluru, Mumbai, and Hyderabad. <br /> <br /> Although the $1.35-billion JBM Group, which has been showcasing its EcoLife electric bus in the Indian market, did not benefit from the tendering process held in the first phase of the FAME India scheme, it remains bullish on the country's electric mobility potential.&nbsp; Admitting that though not many understood the space in India, <span style="font-weight: bold;">Nishant Arya, Executive Director, JBM Group </span>said the conglomerate was working closely with local customers to position itself as an &quot;end-to-end vehicle ecosystem provider.&quot; JBM currently has around 300 people in the R&amp;D team at its electric mobility division, and has plans to export to markets in the Commonwealth countries and the Asia-Pacific region. <br /> <br /> The federal government hiked the budget for supporting EVs in India to $1.3 billion under the second phase of FAME India scheme that commenced in April 2018. Under this scheme, the government offers incentives to local battery manufacturers to encourage them to establish more manufacturing units in India.<br /> <br /> <span style="font-weight: bold;">Wait-and-watch mode</span><br /> Several industry insiders, including <span style="font-weight: bold;">Rajendra Petkar, Chief Technology Officer, Tata Motors </span>predict that the adaptation of electric mobility in India will be gradual.<br /> &quot;The market readiness of EVs depends on three factors. One, availability of the product; two, affordability, since we are yet to reach the inflection point where an electric vehicle is comparable to a conventional vehicle; and three, availability of good charging infrastructure. When all these come together, which we believe will happen eventually, there will be a shift towards electric vehicles. But it is not something that is for today,&quot; he asserted.<br /> <br /> Another area of concern is storage. &quot;Storage solution will be among the key market drivers for electric mobility. Certainly, there are several stakeholders such as governments, utility companies, battery makers, and providers of charging stations who need to contribute in equal measures,&quot; said <span style="font-weight: bold;">Arnd Franz, Member of Management Board &amp; Corporate Executive Vice President, Sales &amp; Application Engineering and Aftermarket, MAHLE</span>, manufacturer of engine peripherals, thermal management products, and mechatronics.<br /> <br /> According to Franz and others in the know, once better insight is available in the initial acceptance of EVs, it would be established how innovative and low-cost solutions in storage technology could be made available in the market at an affordable cost. They include the cost of batteries inside vehicles and buffer batteries in homes that produce electrical energy from renewable sources.<br /> <br /> &quot;India, the world's fourth largest automobile market, presently has anywhere between 100,000 and 150,000 electric vehicles (EVs) and the number is expected to grow by about 5 per cent in the next five years.&quot;<br /> <br /> <span style="font-weight: bold;">All in the Game</span> <br /> Maruti Suzuki to invest Rs 12 billion in lithium-ion battery plant for electric and hybrid vehicles in Hansalpur, Gujarat. The facility is expected to become operational from 2020. This carmaker is reportedly scouting for a supplier of the rare earth metal to <br /> the plant.<br /> <br /> In December 2017, Tata Motors delivered the first set of Tigor EVs to the state-run EESL as part of its initiative to procure 10,000 EVs. The company is also conducting trials of its electric buses and developing an all-electric Nano for the taxi segment.<br /> Mahindra &amp; Mahindra (M&amp;M) intends to invest Rs 6 billion over the next three years to increase its EV production tenfold. Earlier, in November 2017, Mahindra Electric Mobility delivered the first batch of its Mahindra e-Verito electric cars to EESL under the ongoing National E-Mobility Programme.<br /> <br /> Two-wheeler manufacturer, Bajaj Auto is working on building a niche business in the EV space under a new brand internally designated as 'Urbanite'. The company will make premium electric bikes and three-wheelers that are likely to go on sale <br /> by 2020.<br /> <br /> In October 2016, Hero Moto Corp, India's largest two-wheeler manufacturer invested nearly Rs 2 billion in electric automotive start-up, Ather Energy. In May, Ather Energy, the maker of electric scooter S340, launched its EV charging stations in Bengaluru under the AtherGrid brand, making them available within a four-kilometre driving distance from any point in Bengaluru.<br /> <br /> Earlier this year, Bharat Forge (BFL), announced the acquisition of 45 per cent stake in Pune-based electric motorcycle start-up, Tork Motorcycles for Rs 300 million. The T6X motorcycle developed by Tork is capable of going 100 km on a single charge. However, the company has been unable to successfully market the product.<br /> <br /> The JSW Group is reportedly in advanced talks with China's Zhejiang Geely Holding Group Company to make EVs under an equal partnership. The proposed JV will be engaged in the manufacture of premium EVs and batteries, and also in the setting up of charging infrastructure. Meanwhile, JSW is in the process of setting up a Rs 40-billion EV plant in Gujarat.<br /> <br /> Goldstone Infratech, which sells electric buses in India in collaboration with China's BYD, is investing Rs 5 billion to set up its second manufacturing facility in Karnataka. Once completed, the company will be able to roll out over 2,000 electric buses from its two facilities located in Telangana and Karnataka. The facilities will also be used as battery manufacturing units.<br /> <br /> The Indian Space Research Organisation (ISRO) has offered to transfer lithium-ion battery technology used to power its satellites to private industries to help the country realise its EV dream by 2030. Presently, lithium-ion batteries are mostly imported from China and Japan.<br /> <br /> <span style="font-weight: bold;">- Manish Pant <br /> (With inputs from Rahul Kamat)</span><br />
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