There are two big reasons for this – rising vehicular pollution and concerns around oil security. Today, 65-70% of the fuel produced by a barrel of crude oil is used for transportation. The US consumes 19 million barrels of oil each day; oil provides 92% of the energy that powers its cars, trucks, ships and aircraft. It is the same for India, the world’s third largest oil importer.
It now imports over 80% of its crude oil needs, up from 37% in 1990. In 2017-18, India’s oil import bill is likely to rise a third to touch $85-90 billion.
Many pull factors are at play, too. There are marked improvements in EV technology, including battery storage capacity, its cost economics, charging time and range anxiety. The cost of battery power has fallen from around $1,000 per kWh in 2010 to around $227 in 2016 and is expected to drop below $200 per kWh by 2020. By 2030 experts expect EVs to attain cost parity with ICE.
China will lead the global EV wave — its manufacturers accounted for 43% of all EVs sold in 2016. In India, too, the government is making the first move. In Nagpur, the municipal corporation, Ola and Mahindra & Mahindra are experimenting with an all-EV fleet with charging infrastructure.
Meanwhile, the first tender of 10,000 EVs was won by Tata Motors. The EV push will have dramatic implications for India’s Motown. ICE-focused car companies and vendors will have to either reinvent or perish. On the other hand, a rash of established companies and startups, from M&M to Ather Energy and Chetan Maini-led Sun Mobility, will find new business opportunities.
WHY INDIA IS BETTING ON EV
Kill Fuel Bill: EV thrust and renewable energy like solar, with improved technology and viable pricing, will help India bring down its fuel import bill, which is expected to double from around $150 billion to $300 billion by 2030.
It’s the New Flavour: World is caught in an EV wave with China, UK, France and others shunning ICE-based vehicles in favour of EVs Age of Disruption: A McKinsey study says 75% of global automotive experts think firms betting on new technologies — electrification, connected cars, autonomous driving and shared mobility — will disrupt Motown by 2030.
Pollution Worry: EVs have nil tailpipe emissions. A NITI Aayog report suggests that by betting on shared, connected and EV technologies, India could save 64% of energy demand for road transport and 37% of carbon emissions by 2030.