Electric Vehicles and India A Multi Decade Change

Feb-27-2021Blog by – Mr. Keval Lakhani (Chartered Accountant - Research)Read Time: 2 Min.Word Count: 493
126Electric Vehicles and India A Multi Decade Change

India is changing & how! One such change which has started to blend into the Indian ecosystem is the acceptance of electric vehicles. Electric vehicles have arrived and are here to stay. A concept that started out in the West, has now found great attraction in the Indian market. Electric vehicles & India will be a multi decade affair. 

The Indian EV story is yet at a very nascent stage. An EV ecosystem is imperative in India as due to the very high carbon emissions. Transforming to EV’s could reduce our carbon emission by a whopping 35-40%.  This could also translate into lower usage of Fuels for passenger vehicles where we are net importers of crude oil which in turn could lead to monetary savings for the government of India.

The opportunity in the Indian EV ecosystem is so big that it has ample opportunities for all the participants, right from the battery maker to the final OEM manufacturer.  This has also been well supported by government reforms that have set their eyes on energy transition and building a manufacturing environment.  The government has come ahead with policies such as the National electric Mobility mission plan (NEMP), FAME-I and II.  

Although, Electric vehicles should not be reviewed in isolation as it has a huge ecosystem behind it. As a part of its ecosystem, there are the chemicals going into the battery, technology to make the battery, charging infrastructure, quality of roads, the final OEM and most importantly the customer mindset which make the EV thesis very lucrative. 

To understand the ecosystem, Lithium-ion battery plays a vital role in the EV ecosystem. First, the cells to battery value add is done which consists of nearly 60% at 2 stages. Battery chemicals, account for nearly 40% of the value adds. One of the challenges though in the Indian context would be to scout for chemicals such as lithium, cobalt and zinc in India itself. This process needs to be coupled with investment in R&D and then in turn monetization of the same. 

Easy access to charging stations and simple charging structures are key to improved penetration of EV in the Indian market. Its imperative for India to have a very good network of charging stations in order to promote the EV culture. India, currently also boasts of a very good network of fuel pumps and this infrastructure in place is a very able launch pad for EV charging stations. India has a clear road map when it comes to density targets that have been laid out for charging stations. 

The boom of the entire EV ecosystem can lead to high quality manufacturing jobs, investment in R&D, at the same time move in the direction towards sustainable energy. However, the adoption of EV will depend on the affordability of the complete built up unit. EV is here to stay and India is on the right with its policies, intentions & actions to capitalize on this global trend. 

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