Overview of the Electric Vehicle (EV) market in India

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India is one of the top automotive markets in the world.This article is a brief overview about the intersting Electric Vehicle (EV) market.

 

According to a 2010 McKinsey report, transport together with affordable housing, is among the two most capital intensive sectors and a development priority for the Indian government. Transport faces significant deficiencies in public infrastructures. Public transport as well as energy dependency and supply are strong concerns and the challenges in the near future.

EV is widely regarded as one way to reduce the carbon footprint, even if the customers are reluctant to pay a premium to go electric. EV growth rate has been slow. However, electric two-wheelers are quite popular in India (2/3 of the market, approx. 400,000 on road) Most electric vehicles are equipped with lead-acid batteries, but moving to Li-Ion and Ni-Metal Hydride.
Besides the general issues linked to EVs (lack of infrastructure, battery charge time and range anxiety), the specific barriers for EV deployment in the Indian market are:

  • Unreliable grid and frequent power outages lower consumer confidence in PEVs.
  • Vehicles cost.
  • Competition with other alternative energies: CNG, biofuels etc.
  • Low local technologies development (batteries, electronics) and low availability of key components (electronics, controls).


The electric vehicle industry is small. The only company making cars is Mahindra REVA, whose two-seater REVAi has sold 1,500 vehicles domestically and has recently launched the e20 with Li-ion batteries. Despite these doubts, Mahindra REVA sees big potential for EVs. Early this year it expects to debut a sporty model, the NXR, and manufacture it in a new factory in Bangalore slated to make 30,000 cars a year within three years. Tata has developed the concept of the range extended Hybrid Tata Megapixel and Hyundai is introducing the i10 EV model.

To stimulate the domestic market for electric vehicles, the Indian government created the National Council of Electric Mobility, and launched a 3.5 Billion € plan associating the industrial stakeholders to increase production of EVs and hybrids and build charging points with the ambitious target of 6 million vehicles by 2020. Duty exemptions for imported batteries and hybrid vehicle parts are also included in the new budget. The local governments have also launched initiatives and incentives for the deployment of EVs, the development of smart grids and the integration of renewable energies. However, the main problem is the high cost to adequate the electrical grid to EV needs.

EBTC has explored the EV value chain and technology gaps in the Indian market that could potentially be useful to the EU technology providers. There are major opportunities for the development of battery and electric motor technologies, in which technology gaps between India and the EU have been identified, and also areas with potential for expansion in the value chain: from raw materials, to energy supply and mobility services.

Among the upcoming opportunities the ones that offer great potential include the Dedicated Freight Corridor/Delhi-Mumbai Industrial Corridor, public feeder transport, new development townshops, and infrastructure.


 

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