The Outlook For EV Space In India Post Covid-19
The government is likely to introduce a fiscal fillip towards the EV sector
India can buck up and emphasize ushering in the EV component industry
The value chain of EV in India is expected to reach a whopping $4.8 Bn
While the human suffering cannot be understated in any way, there is a silver lining to this Covid-19 pandemic that the entire world is facing at present. The biosphere is breathing back to life post the imposition of lockdown which curbed public mobility and reduced usage of petrol and diesel at large.
Therefore, it is most worthwhile to take a moment and look at what this means for electric vehicles in post-COVID-19 India.
The Emergence Of A New Market For EVs
Until recently, the electric car sector in India was one without much of a success story. A bottleneck for EVs to dominate the automobile market was due to its fiscally daunting acquisition. The cost of EVs was twice or thrice more than its non-electronic counterparts, and hence, was not seen as a viable option for mobility.
However, the inflection point attributed to the COVID-19 pandemic has ushered an uptake of renewable and eco-friendly mobility. This has brought about a drastic reshuffle of fiscal reprieve and augmented production.
Potential Waiting To Be Tapped
There are certain latent growth-inducing factors already in place, if not in motion. Should one be entertained or realized, these are conditions that will favor a drastic EV takeover. To spill the beans - India is a large market for the automobile industry, whereas as many as 90% of commuters opt for two-wheelers, three-wheelers, and buses.
The potential for the EV sector is strong when you do the math, wherein the percentage of commuters mentioned above are likely to adopt EVs if the prevailing conditions are promoted.
Initially, there was a dominant preference for electrifying only two-wheelers and three-wheelers. But that notion has now evolved and will continue to do so. Soon, the automobile industry will witness trans-mobility electrification (of cars, public transportation, and so on).
A Push For EV Space
The government is likely to introduce a fiscal fillip towards the EV sector which will boost the idea that a clean, renewable energy-based mobility is the future. We hope that the government would initiate a scrappage program and follow a policy of incentivizing the EV sector using subsidies and tax relaxation.
There should be a surging investment towards localized manufacturing that spans the value chain, skill development, and invigoration of the country's EV Infrastructure. Amongst other avenues, one concrete step in this direction should be taken to boost localization by nurturing SMEs.
In all likelihood, this one is inevitable and imminent. The global arena for the production of power electronics is a vastly punctuated one. India can capitalize on this shortcoming and fill in the gap. Taking into account the scope for manufacturing batteries, power electronics, and the like, there are enormous opportunities India can utilize to localize and build an all-encompassing supplier ecosystem by 2025.
A Promising Future
The Korean, the Japanese, and the Chinese companies may be the leading manufacturers of the cell, batteries, and electric motors, but, as things stand, this equation is an alterable one. India can buck up and emphasize ushering in the EV component industry. India can afford to pursue a low-cost production and emerge as a leading figure thereof.
To state the obvious, India has a huge potential towards nourishing the component industry with power electronics in particular. As such, by 2025, the value chain of EV in India is expected to reach a whopping $4.8 Bn.
The Way Forward
It is palpable to one and sundry by now that EV is the next-generation mobility. The fascination for electrified mobility has already taken root in India. Even top industry leaders reflect the same sentiment and assert that EV is a promising, practical option for Indian consumers. A significant milestone has already been achieved under the current government towards this score.
The wake-up to EV can be traced back to as early as 2013 when the erstwhile Congress-led government unveiled the "National Electric Mobility Mission Plan (NEMMP) 2020." Since then, the country has been marching on the path towards an EV nation.