The auto manufacturer's push for EVs comes on the back of the government's push for the segment in a big way as it expects around 5 million of these cars to be sold by around next 15 years
The year 2017 will be remembered in the automotive sector when India started talking about Electric vehicles (EV).
Most of the carmakers operating in India have finally started opening up to the idea of launching electric vehicles (EV) after initial hesitations, and one could see a slew of launches by the year 2020.
Japanese car manufacturers, Toyota and rival Suzuki, last month announced their plans to launch their first electric car together by 2020.
Maruti-Suzuki, the Indian subsidiary of Suzuki Corporation is likely to benefit immensely on the back of this move. On the other hand, luxury automakers, including Audi, Mercedes, BMW and JLR, are already working on bringing the EVs in the Indian market by 2020.
Nissan, another Japanese company, is said to be planning a trial in India for its EV car Leaf which it expects to commercially launch by 2020. At the same time, the company is also studying the introduction of e-power technology for the Indian market.
The situation seems to be transforming from when India just had one electric car company in the form of Mahindra Electric, a subsidiary of Mahindra & Mahindra (M&M). However, rival vehicle maker Tata Motors caused jolt when it came out as the leading bidder for the government's 10,000 EV vehicles tender.
The auto manufacturer's push for EVs comes on the back of the government's push for the segment in a big way as it expects around 5 million of these cars to be sold by around next 15 years. The government wants all the vehicles produced in the country after the year 2030 to be EVs and that is why even special leverage has been given to EVs in the recently-introduced goods and services tax (GST).
As per a report released by Centre's think tank Niti Aayog, the accelerated adoption of electric and shared vehicles could save about $60 billion in diesel and petrol costs while cutting down as much as a gigatonne (GT) of carbon emissions for India by 2030. This would result in an diesel and petrol reduction of 156 million tonnes of oil equivalent annually, making a net fuel cost saving of approximately Rs 3.9 lakh crore.
The Niti Ayog report says that India imported 80.9% of its oil in 2015–16, up from 77.6% in 2013–14. But total cost of crude imports was $81.5 billion lower in 2015–16 ($73.9 billion) than in 2014–15 ($155.4 billion) due to historically low global oil prices.
Every day, nearly 50,000 new motor vehicles (2-, 3-, and 4-wheelers) register in India, with a 10% increase in vehicle registration annually for the past decade, according to Niti Ayog. Despite a very low number of vehicles per capita, traffic congestion and pollution are already serious issues in India. A 2016 World Health Organization (WHO) study shows, India is home to 10 of the world's 20 most polluted cities. In 2015, India imported more than 80% of its oil at a cost of Rs 4.2 lakh crore. Traffic accidents cause around 1.5 lakh deaths per year on Indian roads.
The push and pull between the government and auto companies remain as the latter is still not confident about meeting the deadline. The lobbying body SIAM recently submitted a White Paper on EV to the government indicating 100% electric for public mobility and 40% electric for personal mobility by 2030 and taking it further for a complete shift to electric vehicle regime by the 100th year of India's independence.
Abhay Firodia, president, SIAM, said in a statement that the proposed policy measures in the White Paper would be needed for creating a robust market and manufacturing eco-system for electric vehicles in the country and such a policy must be sustained over time to remain stable to enable the industry to commit to investments with full confidence.
Commenting on the development, Sridhar V, partner, Grant Thornton India, said that developments around EV globally is compelling with various governments including in India coming up with strong statements, plans and policies. "OEM's would not want to be left behind in the race to come up with products and options, and thereby their presence in the market. Indian government has kick-started with floating tenders and deliveries have started taking place. Every manufacturer would want to be a part of it while doubts still linger in some minds on when to invest and how much to invest as far as India is concerned," Sridhar added.
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