Centre’s EV push faces logjam as companies seek infrastructure first

While the prolonged industry slowdown has currently helped the automotive industry in keeping electric vehicle (EV) transition in the slow lane, industry experts and insiders say it will continue to remain so until the government and the industry continue playing chicken and egg game.

According to the analysts, while the government continues to push the private players towards moving to the greener fuel in the form of EVs, the private players blame the government for not creating related infrastructure in the first place.

Since 2017, the vehicle manufacturers and their lobby bodies have held several meetings at numerous forums with the government. Almost all the OEMs operating in India, including the foreign ones, argued that there is almost zero infrastructure on the ground at present, and therefore the government should instead make green fuel technology-agnostic. Also, the OEMs feel it would not be prudent to kill the ICE market in which India has a competitive edge.

In the past, manufacturers such as Mercedes-Benz, Toyota and others had also called for an electric vehicle policy outlining long-term perspective, framework and parameters under which they could sell such eco-friendly vehicles. They have also argued that hybrid technology must also be considered and supported for the transition from conventional internal combustion engines to full EVs. Maruti Suzuki had said in the past that EVs are for the long term, and in the short to medium term, alternate fuel technologies such as CNG must be supported.

A government official, on the other hand, said they are working out a way so as to make EV more appealing and affordable for the consumers by way of several soaps and subsidies at least in the initial years. "However, we are of opinion that the transition will first happen in fleet vehicles and public transport, before trickling down to the masses". Further, the government on their part are also pushing the public sector companies to adopt the EVs, the official said.

According to the industry insiders, battery-pack manufacturing capability is not an issue in India, however, what is lacking is cell technology though battery forms around half the price of an EV. According to an estimate China has around 80-85% lithium and phosphate production, which are key raw materials of EV batteries. India is far behind, but the national programme for gigafactory of advanced chemistry cells can change that, claims a report by ICICI Securities.

The government under FAME-2 had laid out a Rs 1,000 crore for supporting charging infra with hood charging infrastructure density, which is likely to be first visible in the top 30 cities.

The development of EV has so far been very slow. Mahindra & Mahindra (M&M), which was the first to get into EV space with the acquisition of Bengaluru-based Reva Electric, has so far covered 135 million eKm. M&M is open to supplying EV technology to other potential customers. The company though has launched a few products, especially for fleets, now plans to launch eKUV later this year.

According to the company officials, though the incremental cost for EVs is more than offset by the reduction in operational expenses, batteries currently comprise 50% of the cost.

Bajaj Auto will launch an electric two-wheeler under the Urbanite brand. The company sources said that electric is not a viable option at present in three-wheelers. However, it expects it to come down considerably on the drop in battery prices and subsidies.

Hero MotoCorp hasn't stated timelines to launch an EV, though it had made some investments in an EV start-up. TVS Motors plans to launch two- and three-wheeler EVs shortly.