EMobility+ March-April Issue 2020

M A R - A P R

POWERING

SMART,

ELECTRIC,

EFFICIENT

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V O L U M E

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I S S U E

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MOBILITY

PERSPECTIVE: Will The Current Pandemic Accelerate Growth Of India’s Electric Vehicle Ecosystem?

IN CONVERSATION

M H REDDY

Chairman NDS Eco Motors Pvt Ltd

OPINION

IS THERE ANY SILVER LINING FOR THE ELECTRIC VEHICLE MARKET POST COVID-19?

www.emobilityplus.com

EMOBILITY + | MAR APR ISSUE 2020

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CONT IN CONVERSATION

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M H REDDY Chairman NDS Eco Motors Pvt Ltd

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GIRISH KAMALA Director & Country Head for Automotive Sales Infineon Technologies India

PERSPECTIVE

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Will The Current Pandemic Accelerate Growth Of India’s Electric Vehicle Ecosystem?

OPINION

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Is there any silver lining for the Electric Vehicle market post COVID-19?

TENT INSIGHTS

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COVID-19- A CRISIS or an opportunity for E-mobility

ELECTRIFICATION CAN CUT Emissions of Transport, Buildings and Industry in Europe by 60% by 2050

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‘HYDROGEN ECONOMY’ OFFERS Promising Path to Decarbonization

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GLOBAL ELECTRIC VEHICLE

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BY 2024, NEARLY HALF OF

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GLOBAL ENERGY DEMAND TO

sales to drop 43% in 2020

new 3-wheelers sold will be e-autos

plunge this year as a result of the biggest shock since the Second World War

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INCONVERSATION

M H REDDY CHAIRMAN NDS ECO MOTORS PVT LTD

Please brief about the portfolio of products & services provided for the EV Sector?

We at NDS Eco Motors remain completely focussed and work only on High Powered, High quality 2 wheelers. Our Vision & Mission is to bring in the electric vehicle product as an alternate to the existing ICEs. We want our products to be the people's first choice and not an alternate choice. Our plan to launch the new model in June2020 got postponed and we now reschedule the launch by the end of 2020. We are associated with the major top automobile suppliers in India and with successful completion of requirements and design our first sample prototype is getting ready.

Our upcoming model is being built with steady and rigidity design with high ground clearance, spacious boot space, safety ergonomics and also is a suitable product for the Smart Cities with IOS, CAN BUS protocol, Bluetooth connectivity, safety aspects, mobile app, etc Thus we are targeting complete 100% MADE IN INDIA products into the market with the finest quality, high speed, power, instant torque, range and various advanced specifications and technical features .We have planned for various marketing activities and promotional events in order to create EV awareness and educate the public on performance, low maintenance, cost savings, environmental concern, etc.

We are currently offering 3 free services, door step services in order to gain the customers confidence on EVs reliability and durability.

EMOBILITY + | MAR APRIL ISSUE 2020

"WE AT NDS ECO MOTORS REMAIN COMPLETELY FOCUSSED AND WORK ONLY ON HIGH POWERED, HIGH QUALITY 2 WHEELERS." What is your future plan for the Indian Market?

We believe there is an increased need to prepare for a green future for Indian mobility and reduce the dependence on imported crude oil.

However any future technology needs some time to strengthen the roots.

We are making a serious commitment towards innovation and investment in the manufacturing, R&D, marketing and promotional activities, to launch the products and exclusive NDS showrooms across PAN India. We are ready to boost with a clear road map for the launch of a full range of variants that will connect with the growing requirements and advanced specifications for both B2C and B2B markets.

What do you think of charging infrastructure in India, What can be done to accelerate its growth?

Charging Infrastructure is the critical necessity for the EV ecosystem inorder to achieve faster adoption of EVs in the Indian market.

The infrastructure is to be made with proper selection of location, vendors, proper site operations, payment and service providers.

To ensure no sort of complex or miscommunication to happen between the vehicle and charging connectors.

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All the related communications, hardware and software aspects need to be kept open and standardized across the country.

Creating a common based knowledge and educating the consumers as well as infrastructure stakeholders leads to increase in product sales as well as investment in Charging Infrastructure.

How will The Current Pandemic Accelerate Growth Of India’s Electric Vehicle Ecosystem?

The current lockdown has resulted in a severe impact on the automobile sales across the globe. Post covid brings in personal transportation and thus also raises the concern towards a green and hygiene environment. This might bring in the interest towards EVs. As far as the concern towards manufacturing, local sourcing and local R&D will be considered. A promising EV product will be chosen on priority considering environment benefits, cost savings, easy and smooth rides.

Which area of the EV sector needs priority attention in the development of the EV sector?

Loans/Finance options for the end users to purchase the EVs at lesser ROI. Tax exemptions across PAN India for EVs. Battery Recycling or buy back policies.

Finance support to the EV manufacturers by the Central & Nationalized banks Setting up cell manufacturing in India maintaining reliability and high quality. As we see the consistency of batteries today are not upto the mark.

What do you think are the untapped opportunities which need to be explored in the EV sector?

A proper order has to be passed onto all the banking and finance sectors to provide the loans to any EV buyer with lesser ROI and also to ensure the procedures to be as simple as in opting loans for ICEs. Creating a potential market for battery recycling business.

Immediate promotion on Charging Infrastructure.

Benefits for the fleet and logistics operators for having the EVs in their fleet.

EMOBILITY + | MAR APRIL ISSUE 2020

Electric mobility being a new technology in the market, it is advisable to the consumer to have test drives, understand the basic usage, better riding condition, self maintenance, simple precautions on charging,etc. I request all to choose the right product and also promote and educate others on the easy maintenance, cost savings, safety aspects, health, environmental benefits and the rightly built MADE IN INDIA product irrespective of cost differentiation as currently EVs are only initial investment and offer low maintenance over the usage period and thus the returns on the investment is much faster."

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INCONVERSATION

GIRISH KAMALA DIRECTOR & COUNTRY HEAD FOR AUTOMOTIVE SALES, INFINEON TECHNOLOGIES INDIA

Brief us on Infineon and your value chain offerings for the emerging EV sector in India?

Infineon is a world leader in semiconductors. Our mission describes how we are helping to solve the technological, economic and social challenges the world is facing today. With our everyday work, we are doing our part to create an easier, safer and greener life for generations to come– with technology that achieves more, consumes less and is accessible to everyone. Our semiconductors enable smart mobility, efficient energy management and the secure capture and transfer of data.

With high-quality components and solutions, and complete application and technology know-how, Infineon enables customers to overcome all fast EV charging, EV inverter, DC-DC and BMS related design challenges.

Our broad portfolio covers power ranges from kilowatt to megawatt, and includes power semiconductors, microcontrollers, gate drivers and authentication solutions. No other company offers a comparable selection from one source, a difference you benefit from with Infineon products and solutions. Use our components to achieve leading power density and best-in-class efficiency in your DC EV charging designs.

EMOBILITY + | MAR APRIL ISSUE 2020

"OUR MISSION DESCRIBES HOW WE ARE HELPING TO SOLVE THE TECHNOLOGICAL, ECONOMIC AND SOCIAL CHALLENGES THE WORLD IS FACING TODAY." Could you please shed some light on your first embedded safety controller AURIX™ (TC3xx).

The AURIX™ microcontroller TC3xx family with its up to hexa-core high performance architecture and its advanced features for connectivity, security and functional safety,is ideally suited for a wide field of automotive and industrial applications. In addition to engine management and transmission control, targeted powertrain applications include new systems in electrical and hybrid drives. The combination of performance and a powerful safety architecture makes the family ideal fit for domain control and data fusion applications supporting the next levels of autonomous driving.

The latest AURIX™ TC3xx microcontrollers are also well-suited for safety-critical applications to support clean, autonomous and connected cars. Ranging from classic airbag, braking and power steering to fail-operational systems supported by sensor-based systems using radar, LIDAR or camera technologies. The combination of performance and a powerful safety architecture makes the family ideal fit for domain control and data fusion applications supporting the next levels of autonomous driving.

To make the car clean, the new family is well-suited to new systems inelectrical and hybrid drives – specifically hybrid domain control, inverter control, battery management, on board charger and DC-DC converters, in addition to engine management and transmission control systems.

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What are the after sales services provided by Infineon. Also, what are the measures you take to ensure customer satisfaction?

Customers choose Infineon because we stand for highest levels of quality, reliability and technological leadership. This year, Infineon was once again honored by many leading manufacturers in the automotive industry. Japan’s largest automobile manufacturer Toyota recognized Infineon once again with an award for what is now five years of defect-free deliveries to its plant in Hirose (Japan).

Infineon is a partner in the Volkswagen group’s strategic supplier network FAST (Future Automotive Supply Tracks) program. Our power modules control the electric drives in Volkswagen’s electro-mobility platform MEB, the industry’s largest platform for pure electric vehicles. Infineon and Volkswagen co develop future semiconductor requirements and innovations amongst others to increase driving range reduce charging times of electric cars.

In India, besides 4 wheelers, we deliver EV solutions to 2 wheelers, Commercial vehicles and 3 wheelers segments. Our application engineering team is involved in developing Proof of Concept (POC) and custom solutions to cater to the needs of the local customers and environment. This enables our customers to shorten their development time and provides them with an edge in the industry. We provide on-site support to our customers during their development cycle and help review their designs and schematics.

With high-quality components and solutions, and complete application and technology know-how, Infineon enables customers to overcome all fast EV charging, EV inverter, DC-DC and BMS related design challenges. Our broad portfolio covers power ranges from kilowatt to megawatt, and includes power semiconductors, microcontrollers, gate drivers and authentication solutions. No other company offers a comparable selection from one source, a difference you benefit from with Infineon products and solutions.

EMOBILITY + | MAR APRIL ISSUE 2020

What are your growth plans for the Indian market?

In India, we are involved in sales, application support, software development and design services for our customers. We continue to engage with our customers to develop key features conforming to Indian regulations and market requirements.. Despite the current downward trend in the automotive industry, we believe that the Indian market is robust and will continue to grow in double digits. We are keenly observing the trend towards EV and prepared to support the growth of this segment. Our development and testing lab in Pune is equipped with the latest equipment and motor test bench to aid in the development of POC’s for motor control and EV solutions.

We are geographically present in all the 3 automotive hubs and in close proximity to our customers.

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WILL THE CURRENT PANDEMIC ACCELERATE GROWTH OF INDIA’S ELECTRIC VEHICLE ECOSYSTEM?

PERSPECTIVE

EMOBILITY + | MAR APRIL ISSUE 2020

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MR. SUSHOVAN BEJ SENIOR CONSULTANT - ELECTRIC MOBILITY AND RENEWABLE ENERGY, ERNST & YOUNG LLP

Before the COVID 19 outbreak, the year 2020 was to be a crucial year for automakers world over selling electric vehicles, with several industry titans opening new factories and rolling out new models. Countries, like China, already has more EVs than any other, thanks to government policies encouraging production and the generous subsidies to help consumers buy them. India, like many other countries, has also experienced the massive popularity for EVs, thanks to the government initiatives (such as FAME scheme) adding to the growth. The novel coronavirus (COVID-19) crisis has caused a slowdown in the economic growth of countries globally. The majority of the production facilities remain closed or are not able to attain full production capacity due to shortage of staff and raw materials.

While in the short term, the stumbling oil prices and the economic slowdown may delay the discretionary consumer spending which will definitely have an impact on the EV sales. The continued and concentrated efforts of the public and private stakeholders alike, will surely drive the EV growth in India.

Though the cost of ownership of an EV is more viable than the equivalent gasoline vehicle, the technology is still evolving, the cost of batteries has to come down and we need to have infrastructure in place. The need of the hour is to rethink (and redesign, if required) the growth and customer acquisition strategies, strengthen R&D initiatives, strengthen the infrastructure (charging and battery swapping) requirement and develop an export competent manufacturing hubs in India, to reduce import dependency (especially on batteries). And, governments should continue to play a facilitative role by developing holistic (and realistic!) roadmaps, efficient policies/regulations/guidelines and a support structure (for the industries) to enable the sustainability of the ecosystem being/to be developed.

EMOBILITY + | MAR APRIL ISSUE 2020

DR. RASHI GUPTA MANAGING DIRECTOR, VISION MECHATRONICS PRIVATE LIMITED

The world is renovating and mankind is innovating, however there are certain economic challenges that are to be dealt with. This pandemic has a very positive effect of the mother earth and during these unprecedented times the electric vehicle industry is surrounded by many challenges including higher upfront cost of EVs, inadequate charging infrastructure, infant local manufacturing ecosystem are a few to begin with. The Government of India has very actively taken steps like Fame 2, making standards for EV, adding public charging infrastructures, improving the policy framework are a few amongst others. At present, the consumer mindset is more inclined towards self sustainability and getting immunity from the pandemic.Another important aspect is the new rules of the import duty, which were to be implemented from 1st April 2020, will certainly be detrimental to import from our neighboring country, but at the same time, were made to boost the manufacturing ecosystem within India.Owing to the pandemic many such manufacturing plans have been deferred which may further increase the strain on your pocket to own an EV. Presently there are very few choices for the consumers in the EV domain and many of the Auto giants have postponed their EV plans as they have to focus on their bread and butter.Though in the long run owing an EV is cheaper than the conventional vehicle but as the Indian consumer is extremely price sensitive, and given the global economic crisis which we are also not exempted from, the consumer mindset may move towards opting for capex light models though still wanting to preserve the environment.

Shared Mobility, which was offering this, will now take the backseat for a while until the new normal of life is adapted to. Leasing or Renting of personal vehicles, both 2W & 4W,offering convenient and flexible solutions, will see a substantial growth but it will be the consumer who will decide whether he wants to choose a cleaner mode of transport or still continue with a traditional ones. In the coming quarters of 2020 EV’s will see a decline but then will see a continuous growth from the year 2021.

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MR. ARVIND NOEL X L AUTOMOTIVE-EV CONSULTANT

Amidst the Global crisis due to the pandemic, the Indian EV market would require a tremendous change in the ecosystem, to keep the spark of hope for electric vehicle manufacturers and tier 1 suppliers. India has been strongly relying on imports from other countries (mainly China, South Korea and Japan) for components such as batteries, management systems, drivetrain and power electronics parts. High impact in the supply areas will be due to production shutdown, supply chain disruption and risk of low labor, the breakthrough for ICE vehicles came through domestic manufacturing and that’s the direction that many EV players are focusing on the big boost of the EV industry.

In Q1 of automotive sales in India, the auto industry has already been going through a plunging decline (transition period of BS 4 to BS 6) even before the pandemic began. The recent outbreak will definitely impact consumer behavior and business operations through company’s future spends.

The various factors that will Impact and the solution towards the growth of Automotive EV Value Chain; Reorganize supplier network: There will be a quick assessment for seeing new opportunities to manufacture components in-house or find alternative supplier in various geographic portfolios.

Strategy for auto manufacturers: The decline in sales is going to be a short term impact, OEMs will look into more sustainable spends on R&D, conserve cash for future spends, and higher automation in factories to rely less on contract labors.

Restructure EV infrastructure network: As PHEVs and EVs are being the next focus point in the auto industry in India, companies can look into feasible solutions to bring EV infrastructure network to a larger scale to draw more customer acceptance. Any new technology requires high customer acceptance while regulations and government incentives always drive technology adoption.

Sales of EVs post crisis: As social distancing will have a long lasting impact in urban regions, personal commute will be preferred as mass/shared mobility is expected to take high impact. This will benefit the rise of sales in the 2 wheeler EV market and entry level EVs. Virtual Sales Platform & Online Aftermarket Support: Digital marketing and virtual reality showrooms were the most transformational change that the auto industry has been focusing on. Since retail and service stores are expected to have long term impact of low footfalls, using digital platforms is currently an opportunity to be introduced for consumers to continue their ownership experience.

Lure consumers with eye-catching Cost of Ownership: Offer more personal customer- dealership experience by offering virtual tours, online negotiations with discounts and financing options through digital retailing.

As the crisis will take a few months to subside, OEMs should step towards restructuring their supply chain by bringing more localized production through automation and digital retailing platforms. By end of 2020, Consumers will most likely be attracted with better purchase price through incentives and more reliable EV infrastructure network.

EMOBILITY + | MAR APRIL ISSUE 2020

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STHGISNI

The chaos caused by Covi d-19 has affected most sectors i n the economy and electri c vehi cles (“EV”) sector i s no excepti on. EV market i n Indi a i s sti ll nascent and requi res si gni fi cant government and regulatory support to achi eve vi abi li ty and stabi li ty. Whi le i t may be tempti ng for the governments to push the EV adopti on off the radar, they may be well advi sed to stay the course and push EV adopti on more aggressi vely than ever before. The advantages may be mani fold, extendi ng beyond j ust the envi ronmental benefi ts.

Chinese Dependence EV manufacturi ng i n Indi a, and even globally has been heavi ly dependent on i mports from Chi na. Due to supply chai n di srupti ons caused by Covi d-19, EV producti on i n Indi a has taken a beati ng i n the recent past. Chi nese dependence on EVs can be gauged from the fact that Chi na accounts for almost three fourth of manufacturi ng capaci ty i n Li thi um i on (“Li -i on”) cells. Li -i on cells consti tute a key component of EVs. Chi na i s also the largest manufacturer of EVs i n the world.

Indi an battery manufacturi ng depends largely on Chi nese i mports of Li -i on cells.

For EV manufacturi ng i n Indi a to stand on i ts own feet, Indi an battery manufacturers need to create Li -i on cell manufacturi ng capaci ty i n Indi a. The general global senti ment agai nst Chi nese i mports i n Covi d-19 aftermath, and the pressure on manufacturers across the globe to reduce thei r dependence on Chi nese products may create opportuni ty for manufacturers to create i n-house manufacturi ng capaci ty, and not depend on i mports. Indi an manufacturers too may do well to i nvest i n technology and i ncrease manufacturi ng capaci ty i n Indi a. Thi s may also present an opportuni ty to make use of ‘ Make i n Indi a’ campai gn launched by the Government of Indi a to i ncrease manufacturi ng acti vi ty i n Indi a and generate employment.

However, Government wi ll also play a key role i n not only provi di ng i ncenti ves for manufacturi ng, but also by further i ncenti vi si ng purchase of EVs through tax and other reli efs.

Why push EVs in these times?

Envi ronmental gai ns made duri ng the Covi d-19 outbreak has been perhaps the only si lver li ni ng duri ng thi s cri si s. The gai ns can be very qui ckly lost i f our ways of li fe move back to busi ness as usual. Movi ng to e-mobi li ty presents an opportuni ty to retai n some of the envi ronmental gai ns.

The power generators i n Indi a had been sufferi ng even pri or to Covi d-19 cri si s. Covi d-19 has escalated the cri si s to a new level by massi ve reducti on i n demand. A si gni fi cant generati on capaci ty had to be curtai led on account of di stressed demand.

Whi le i ndustri al producti on may take some ti me to take off, a si gni fi cant move from petroleum based vehi cles to EVs even i n the medi um to short run may help create electri ci ty demand, helpi ng the generators to ramp up generati on. The use of Li i on batteri es i n EVs as back-up storage i s known to help i n the stabi li ty of the gri d, whi ch benefi t of EVs has not been fully hi ghli ghted.

EMOBILITY + | MAR APR ISSUE 2020

COVID-19A CRISIS OR AN OPPORTUNITY FOR E-MOBILITY Movi ng to EVs may also save the government some preci ous forei gn exchange and help i n balance of payment i ssues i n these ti mes.

Challenges Ahead Gi ven the severe strai n on the economy, Government’ s pri ori ty i s li kely to be on revi vi ng the economy. Sectors that are easi est to revi ve are li kely to get a boost, whi ch gi ves conventi onal vehi cles an edge. The stranded manufacturi ng capaci ty i n conventi onal vehi cles can more easi ly be mobi li sed, and wi th petroleum pri ces hoveri ng at thei r lowest i n the recent hi story, i t may be tempti ng for the Government to push the EV agenda off the radar for the ti me bei ng. Whi le petroleum i mports are a drag on forex reserves of the country, after removal of subsi di es on petroleum products, thei r sale i s a si gni fi cant source of revenue both for the Central and the state governments. In these ti mes, governments may li ke the petroleum sales to pi ck up to shore up thei r fi nances, further margi nali si ng EVs. Unless government i ntervenes wi th poli cy level i ncenti ves, i nvestments i n chargi ng i nfrastructure may also see some slump due to the general economi c outlook, whi ch may slow down the pace of EV adopti on.

Conclusion Whi le these are challengi ng ti mes, the opportuni ti es that thi s provi des cannot be understated. For the government, i t i s the perfect opportuni ty to create a change i n habi ts for i ntergenerati onal benefi ts that EVs offer. EV manufacturi ng may also offer a platform for economi c revi val, i f the Government and the manufacturers step up. As the world looks beyond Chi na, Indi a may be well poi sed to provi de a manufacturi ng base for EVs and i ts components, parti cularly Li -i on cells. Let thi s cri si s lead us from darkness to a cleaner future.

Author / Co-Author: Mr. Abhishek Tripathi, Managing Partner, Sarthak Advocates & Solicitors, Delhi

Ms. Anura Gupta, Principal Associate, Sarthak Advocates & Solicitors

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STHGISNI

ELECTRIFICATION CAN CUT EMISSIONS OF TRANSPORT, BUILDINGS AND INDUSTRY IN EUROPE BY 60% BY 2050

Electri fi cati on of the transport, bui ldi ngs and i ndustri al sectors i n Europe could slash greenhouse-gas emi ssi ons by 60% between 2020 and 2050, accordi ng to a new report publi shed today by research company BloombergNEF (BNEF).

A revoluti on i n the use of energy by these three sectors i s possi ble over the next 30 years, bri ngi ng about sharp reducti ons i n CO2 emi ssi ons. Wri tten i n partnershi p wi th Eaton and Statkraft the report, Sector Coupli ng i n Europe: Poweri ng Decarboni zati on, outli nes a plausi ble pathway of electri fi cati on, taki ng account of current levels of poli cy ambi ti on i n countri es li ke the U. K. and Germany.

Vi ctori a Cumi ng, head of global poli cy analysi s for BNEF, commented: “Electri fi cati on, or ‘ sector coupli ng’ as i t’ s known i n some countri es, could make a huge contri buti on to the achi evement of governments’ emi ssi on-reducti on targets by exploi ti ng the low-carbon transi ti on already underway i n the power generati on sector. ” Electri fi cati on could take place vi a a mi x of ‘ di rect’ and ‘ i ndi rect’ changes. ‘ Di rect’ would i nvolve the proli ferati on of electri c vehi cles i n as much of the transport sector as possi ble, and the spread of electri c heati ng systems li ke heat pumps i n bui ldi ngs and some parts of i ndustry; and ‘ i ndi rect’ would i nvolve a swi tch to ‘ green hydrogen’ – produced by electrolysi s usi ng renewable electri ci ty – as a fuel to provi de heat for bui ldi ngs and as many i ndustri al processes as possi ble, that otherwi se would rely on fossi l fuels.

EMOBILITY + | MAR APR ISSUE 2020

“However, acti on from poli cy makers wi ll be needed i f these changes are to happen, ” Cumi ng sai d. “Governments should i ntroduce i ncenti ves or requi rements to cut emi ssi ons from bui ldi ng heat, support demonstrati on proj ects for electri fi cati on, and i ron out barri ers to the producti on of green hydrogen. They should also consi der how to engage energy consumers and ci vi l soci ety as they have a cruci al role to play i n enabli ng electri fi cati on of these new sectors. ” Albert Cheung, head of analysi s for BNEF, added: “Electri fyi ng other areas of the economy wi ll have si gni fi cant repercussi ons for the power system. Poli cy makers wi ll have to support the rei nforcement and extensi on of the gri d to handle hi gher power volumes and more renewables, and the deployment of batteri es and other sources of flexi bi li ty to balance the system. ” The report esti mates that the power system could need 75% more generati on capaci ty by 2050 compared wi th what would be needed wi thout the addi ti onal sector coupli ng, wi th low-cost wi nd and solar plants compri si ng most of that. The power system would also need to be more flexi ble due to the di fferent energy consumpti on patterns of heati ng and transport. At the same ti me, the newly electri fi ed sectors could create new sources of thi s ‘ flexi bi li ty’ – by bei ng able to alter thei r consumpti on patterns – provi ded the ri ght poli ci es and technologi es are i n place.

Such an electri fi cati on pathway would enable power (di rectly and i ndi rectly) to account for up to 60% of fi nal energy demand by these sectors, compared to j ust 10% now.

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That would sti ll be far short of full decarboni zati on for those sectors. That i s due to the vari ous hard-to-abate acti vi ti es wi thi n them – i ncludi ng avi ati on, shi ppi ng, long-haul road transport and hi gh-temperature i ndustri al processes such as cement and steel – as well as the long replacement cycles of some assets.

To further reduce emi ssi ons to net-zero, governments would need to i ntroduce more ambi ti ous poli ci es accelerati ng the ‘ sector coupli ng’ pathway, and bri ng other technologi es to market such as carbon capture, use and storage (CCUS). They would also have to address agri culture and land use.

It wi ll be i mportant to meet the addi ti onal power demand wi th clean power as much as feasi ble to maxi mi ze the cli mate benefi ts of sector coupli ng. Cheung sai d: “It wi ll be cruci al that governments and regulators adopt an electri ci ty market desi gn that enables developers of wi nd and solar proj ects, and those planni ng battery storage plants or demand response servi ces, to anti ci pate level of returns that j usti fy thei r i nvestment. ” Henri k Sætness, SVP corporate strategy and analysi s at Statkraft sai d: “The report confi rms what electri fi cati on means for the decarboni sati on of soci ety and the unparalleled role of renewable energy i n the years to come. Goi ng forward, renewables can’ t be part of the soluti on. They must be the soluti on. ”

Electrification could take place via a mix of ‘direct’ and ‘indirect’ changes. ‘Direct’ would involve the proliferation of electric vehicles in as much of the transport sector as possible, and the spread of electric heating systems like heat pumps in buildings and some parts of industry; and ‘indirect’ would involve a switch to ‘green hydrogen’

Cyri lle Bri sson, vi ce presi dent, sales, servi ce and marketi ng at Eaton EMEA commented: “Thi s study demonstrates the need for bi g changes to poli cy and market desi gn, i n order to accelerate the energy transi ti on and halt the accumulati on of greenhouse gases i n the atmosphere. Whi le essenti al reform to gri d regulati on has started to progress across Europe, we have far to go i f we are to repli cate best practi ces and further encourage i nnovati on. Thi s i s parti cularly apparent when i t comes to market structures that i ncenti vi ze the flexi bi li ty needed to address the challenge of renewable i ntermi ttency. ” In the report’ s pathway, whi ch assumes that the above menti oned challenges are met, total emi ssi ons across power, transport, bui ldi ngs and i ndustry fall by 68% from 2020 to 2050.

Thi s compares wi th a reducti on of 60% i f only consi deri ng transport, bui ldi ngs and i ndustry.

Fig 1 : Reduction in greenhouse-gas emissions over 20202050 with sector coupling in a country like U.K. or germany

Credits: BloombergNEF EMOBILITY + | MAR APR ISSUE 2020

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STHGISNI

‘HYDROGEN ECONOMY’ OFFERS PROMISING PATH TO DECARBONIZATION

Use of clean hydrogen can help address the toughest third of global greenhouse gas emissions by 2050, but only if netzero emission goals and policies are set The falli ng cost of maki ng hydrogen from wi nd and solar power offers a promi si ng route to cutti ng emi ssi ons i n some of the most fossi l fuel dependent sectors of the economy, such as steel, heavy-duty vehi cles, shi ppi ng and cement.

Hydrogen Economy Outlook, a new and i ndependent global study from research fi rm BloombergNEF (BNEF), fi nds that clean hydrogen could be deployed i n the decades to come to cut up to 34% of global greenhouse gas emi ssi ons from fossi l fuels and i ndustry – at a manageable cost. However, thi s wi ll only be possi ble i f poli ci es are put i n place to help scale up technology, and dri ve down costs.

The report’ s fi ndi ngs suggest that renewable hydrogen could be produced for $0. 8 to $1. 6/kg i n most parts of the world before 2050. Thi s i s equi valent to gas pri ced at $6-12/MMBtu, maki ng i t competi ti ve wi th current natural gas pri ces i n Brazi l, Chi na, Indi a, Germany and Scandi navi a on an energyequi valent basi s. When i ncludi ng the cost of storage and pi peli ne i nfrastructure, the deli vered cost of renewable hydrogen i n Chi na, Indi a and Western Europe could fall to around $2/kg ($15/MMBtu) i n 2030 and $1/kg ($7. 4/MMBtu) i n 2050.

EMOBILITY + | MAR APR ISSUE 2020

Kobad Bhavnagri , head of i ndustri al decarboni zati on for BNEF and lead author of the report, sai d: “Hydrogen has potenti al to become the fuel that powers a clean economy. In the years ahead, i t wi ll be possi ble to produce i t at low cost usi ng wi nd and solar power, to store i t underground for months, and then to pi pe i t on-demand to power everythi ng from shi ps to steel mi lls. ” Hydrogen i s a clean-burni ng molecule that can be used as a substi tute for coal, oi l and gas i n a large vari ety of appli cati ons.

But for i ts use to have net envi ronmental benefi ts, i t must be produced from clean sources, rather than from unabated fossi l fuel processes – the usual method at present.

Renewable hydrogen can be made by spli tti ng water i nto hydrogen and oxygen, usi ng electri ci ty generated by cheap wi nd or solar power. The cost of the electrolyzer technology to do thi s has fallen by 40% i n the last fi ve years, and can conti nue to sli de i f deployment i ncreases. Clean hydrogen can also be made usi ng fossi l fuels i f the carbon i s captured and stored, but thi s i s li kely to be more expensi ve, the report fi nds.

Stori ng and movi ng hydrogen i s challengi ng. For hydrogen to become as ubi qui tous as natural gas today, a huge, coordi nated program of i nfrastructure upgrades and constructi on would be needed. For i nstance, 3-4 ti mes more storage i nfrastructure would need to be bui lt at a cost of $637 bi lli on by 2050 to provi de the same level of energy securi ty as natural gas.

PG 16

However, cost effi ci ent large-scale opti ons do exi st and could be used to supply i ndustri al customers wi th the clean gas. “If the clean hydrogen i ndustry can scale up, many of the hard-toabate sectors could be decarboni zed usi ng hydrogen, at surpri si ngly low costs, ” Bhavnagri sai d.

The study found that a carbon pri ce of $50/tCO2 would be enough to swi tch from coal to clean hydrogen i n steel maki ng by 2050, $60/tCO2 to use hydrogen for heat i n cement producti on, $78/tCO2 for maki ng chemi cals li ke ammoni a, and $145/tCO2 to power shi ps wi th clean fuel, i f hydrogen costs reach $1/kg. Heavy trucks could also be cheaper to run on hydrogen than di esel by 2031, although batteri es remai n a cheaper soluti on for cars, buses and li ght trucks.

Fig 1 : Summary of the economics of a hydrogen economy

Hydrogen is a clean-burning molecule that can be used as a substitute for coal, oil and gas in a large variety of applications.

But for its use to have net environmental benefits, it must be produced from clean sources, rather than from unabated fossil fuel processes – the usual method at present.

For hydrogen to gai n use, poli cy i s cri ti cal. “The clean hydrogen i ndustry i s currently ti ny and costs are hi gh. There i s bi g potenti al for costs to fall, but the use of hydrogen needs to be scaled up and a network of supply i nfrastructure created, ” Bhavnagri sai d. “Thi s needs poli cy coordi nati on across government, frameworks for pri vate i nvestment, and the roll-out of around $150 bi lli on of subsi di es over the next decade, ” he added. “That may sound daunti ng but i t i s not, i n fact, such a huge task – governments around the world currently spend more than twi ce that every year on fossi l fuel consumpti on subsi di es. ” But ri ght now, the outlook for a hydrogen economy i s sti ll uncertai n, as there i s i nsuffi ci ent poli cy to support i nvestment and to scale up the i ndustry, accordi ng to the BNEF study. Even i f that occurs, hydrogen would not be a si lver bullet. Carbon pri ces and emi ssi on poli ci es wi ll sti ll be essenti al to dri ve hydrogen use, parti cularly i n locati ons wi th very cheap coal and gas. Despi te the potenti al cost reducti ons, hydrogen must sti ll be manufactured – so i t i s li kely to remai n a more expensi ve form of energy. Industry wi ll not automati cally swi tch to usi ng i t – a commi tment to net-zero emi ssi ons i s requi red.

Bhavnagri sai d: “Hydrogen i s promi si ng and powerful because i t can be used for so many thi ngs. Renewable energy has paved the way to carbon-free electri ci ty. But to meet net-zero emi ssi ons targets, we need to go beyond electri ci ty and have carbon-free fuels. That i s the role for hydrogen. ”

Credits: BloombergNEF

EMOBILITY + | MAR APR ISSUE 2020

PG 17

STHGISNI

GLOBAL ELECTRIC VEHICLE SALES TO DROP 43% IN 2020

Global electric vehicle (EV) sales closed at 2.2 million in 2019. This number is expected to drop 43% to 1.3 million by the end of 2020, according to new research from Wood Mackenzie.

The coronavi rus outbreak, potenti al delays to fleet purchasi ng due to lower oi l pri ce and a wai t-and-see approach to buyi ng new models have all contri buted to thi s decrease i n proj ected sales.

Wood Mackenzi e’ s analysi s notes that Chi na wi ll catch up to 2019 demand by November 2020, whi le Europe wi ll do so by December. Year-over-year demand i n the US i s proj ected to lag 2019 demand by 30% by the close of 2020.

“At the end of January, sales of all cars i n Chi na were down by 21% compared to 2019. By February, they had plunged by 80%.

EV sales were hi t harder, wi th January numbers down 54% and February proj ected to be down more than 90%. EVs have consti tuted approxi mately 5% of all vehi cles sales i n Chi na for the past two years.

“Most new EV buyers are sti ll fi rst-ti me owners of the technology. The uncertai nty and fear created by the outbreak has made consumers less i ncli ned to adopt a new technology.

Once the epi demi c i s contai ned i n Chi na, we suspect consumers wi ll flock back to car dealers and reaffi rm thei r confi dence i n EVs. “In stark contrast, EV sales i n Europe saw a 121% i ncrease i n January – despi te a 7% reducti on i n the overall market. The trend of i ncreasi ng EV adopti on persi sted i nto February, albei t lower than the previ ous month.

“However, the fi rst case of coronavi rus was not reported i n the regi on unti l late January. The i nfecti on rate i s expected to peak i n Europe and North Ameri ca towards the end of H1 2020, approxi mately two months after Chi na. The January and February numbers therefore do not yet reflect the i mpact of coronavi rus i n the two regi ons.

“The fi rst lockdown i n the US di d not start unti l 20th March but the effects have already begun to show i n EV sales. General Motors i s offeri ng a di scount of US$10, 000 for i ts Chevrolet Bolt. Further such rebates are sure to follow to move i nventory as demand drops further, ” sai d Ram Chandrasekaran, Wood Mackenzi e Pri nci pal Analyst.

In an unorthodox move, tradi ti onal automakers enteri ng the EV market have announced upcomi ng models that wi ll be launched over the next several years rather than over the next 12 months.

“Ford i ntroduced i ts Mustang Mach E i n November 2019 but i t won’ t be wi dely avai lable unti l H1 2021. Volkswagen has been promoti ng the ID. 3 for several years but i sn’ t expected to starti ng selli ng the model unti l later thi s year. General Motors celebrated an ‘ EV Day’ on 4th March to tout i ts readi ness for the transi ti on to electri c vehi cles, however none of i ts new products are goi ng to be avai lable unti l late 2021.

“The automakers’ response to the pandemi c – suspendi ng car manufacturi ng to focus on maki ng medi cal equi pment – i s only goi ng to delay model launches further.

“From a consumer’ s perspecti ve, however, i t makes perfect sense to wai t longer for these models. After all, a car purchase i s a large fi nanci al i nvestment that lasts several years.

Unfortunately, for EV adopti on, thi s i s li kely to lead to a plateaui ng of sales i n the near term. Whi le the pent-up demand from the pandemi c wi ll help a bounce back i n sales later i n the year, new demand growth wi ll lack unti l 2021.

“Despi te the potenti al delays i n EV adopti on, several automakers have expressed a desi re to be carbon neutral due to government poli ci es and a change i n i nvestor atti tude. The shi ft towards sustai nabi li ty i s the dri vi ng force behi nd the electri fi cati on of transport. Uncertai nty caused by the oi l pri ce war and global catastrophes wi ll only serve to strengthen that resolve, not deter i t, ” added Chandrasekaran.

Credits: Wood Mackenzie EMOBILITY + | MAR APR ISSUE 2020

PG 18

STHGISNI

BY 2024, NEARLY HALF OF NEW 3-WHEELERS SOLD WILL BE E-AUTOS A sixth of 2-wheelers sold will also be electric; cab aggregators to steer e-car sales By 2024, as much as 43-48% of new three-wheelers (excludi ng e-ri ckshaws), and 12-17% of new two-wheelers sold i n Indi a wi ll be electri c vehi cles (EVs), a study by CRISIL Research shows.

But tracti on may be low for 4-wheelers, wi th only 5% of new sales li kely to be EVs.

manufacturers are launchi ng e-autos at a rapi d pace. But lowspeed, four-seater e-ri ckshaws are fast emergi ng as an alternati ve to e-autos because of bei ng ~30% cheaper. ” At the other end, sales of personal electri c cars wi ll remai n i n the slow lane due to hi gh acqui si ti on and ownershi p costs, i n the absence of demand i ncenti ves. Cab aggregators, though, wi ll step on the accelerator as these wi ll enj oy better operati onal economi es and subsi di es. A cab aggregator e-car that runs ~50, 000 km a year, for i nstance, can save about Rs 1. 65 lakh a year compared wi th Rs 35, 000 for a personal e-car that runs ~10, 000 km a year.

The study looked at demand, supply and poli cy growth dri vers for EVs such as battery costs, government subsi dy and chargi ng i nfrastructure, besi des conducti ng a segment-wi se analysi s of the cost of acqui si ti on and operati on of EVs compared wi th exi sti ng i nternal combusti on engi ne (ICE) vehi cles.

And i n the commerci al vehi cles space, subsi di es to state transport undertaki ngs wi ll dri ve sales of electri c buses for i ntra-ci ty operati ons.

Faster adopti on of two- and three-wheelers i s a functi on of cost. Typi cally, electri c scooters are cheaper to run compared wi th ICE scooters. And e-autos are cheaper to both own and run compared wi th thei r ICE counterparts.

Says Pushan Sharma, Associ ate Di rector, CRISIL Research, “The government has created a poli cy push for EVs wi th the second i nstalment of the Faster Adopti on and Manufacturi ng of Electri c Vehi cles i n Indi a or FAME II poli cy and numerous effi ci ency and emi ssi on regulati ons. However, Indi a has much catchi ng up to do i n terms of the four dri vers of growth globally – battery pri ce, demand i ncenti ves, supply push, and chargi ng i nfrastructure. That means poli cy i mplementati on wi ll be cruci al to faster adopti on of EVs i n Indi a. ”

Says Hetal Gandhi , Di rector, CRISIL Research, “In the context, supply wi ll also be a cri ti cal factor for adopti on. The top fi ve electri c two-wheeler manufacturers are expected to i ncrease thei r capaci ty for electri c vari ants from 0. 4 mi lli on uni ts i n fi scal 2020 to over 3 mi lli on uni ts by fi scal 2024. And i n threewheelers, even i ncumbent ori gi nal equi pment

Sales of personal electric cars will remain in the slow lane due to high acquisition and ownership costs, in the absence of demand incentives.

EMOBILITY + | MAR APR ISSUE 2020

That sai d, poor publi c chargi ng i nfrastructure wi ll i mpact adopti on.

CRISIL Research expects the landed cost of li thi um i on battery – a key dri ver of EV adopti on i n Indi a – to come down i n li ne wi th an expected drop i n global pri ces by fi scal 2024.

Executi on of the government’ s phased manufacturi ng programme for EV batteri es, too, wi ll help dri ve down battery pri ces.

Ti ll then, EV adopti on wi ll be gradual, gi vi ng auto component manufacturers enough ti me to reali gn thei r operati ons.

Credits: Crisil

PG 19

STHGISNI

GLOBAL ENERGY DEMAND TO PLUNGE THIS YEAR

AS A RESULT OF THE BIGGEST SHOCK SINCE THE SECOND WORLD WAR

The Covi d-19 pandemi c represents the bi ggest shock to the global energy system i n more than seven decades, wi th the drop i n demand thi s year set to dwarf the i mpact of the 2008 fi nanci al cri si s and result i n a record annual decli ne i n carbon emi ssi ons of almost 8%.

A new report released today by the Internati onal Energy Agency provi des an almost real-ti me vi ew of the Covi d-19 pandemi c’ s extraordi nary i mpact across all maj or fuels. Based on an analysi s of more than 100 days of real data so far thi s year, the IEA’ s Global Energy Revi ew i ncludes esti mates for how energy consumpti on and carbon di oxi de (CO2) emi ssi ons trends are li kely to evolve over the rest of 2020.

“Thi s i s a hi stori c shock to the enti re energy world. Ami d today’ s unparalleled health and economi c cri ses, the plunge i n demand for nearly all maj or fuels i s staggeri ng, especi ally for coal, oi l and gas. Only renewables are holdi ng up duri ng the previ ously unheard-of slump i n electri ci ty use, ” sai d Dr Fati h Bi rol, the IEA Executi ve Di rector. “It i s sti ll too early to determi ne the longerterm i mpacts, but the energy i ndustry that emerges from thi s cri si s wi ll be si gni fi cantly di fferent from the one that came before. ” The Global Energy Revi ew’ s proj ecti ons of energy demand and energy-related emi ssi ons for 2020 are based on assumpti ons that the lockdowns i mplemented around the world i n response to the pandemi c are progressi vely eased i n most countri es i n the comi ng months, accompani ed by a gradual economi c recovery.

The report proj ects that energy demand wi ll fall 6% i n 2020 – seven ti mes the decli ne after the 2008 global fi nanci al cri si s. In absolute terms, the decli ne i s unprecedented – the equi valent of losi ng the enti re energy demand of Indi a, the

EMOBILITY + | MAR APR ISSUE 2020

world’ s thi rd largest energy consumer. Advanced economi es are expected to see the bi ggest decli nes, wi th demand set to fall by 9% i n the Uni ted States and by 11% i n the European Uni on. The i mpact of the cri si s on energy demand i s heavi ly dependent on the durati on and stri ngency of measures to curb the spread of the vi rus. For i nstance, the IEA found that each month of worldwi de lockdown at the levels seen i n early Apri l reduces annual global energy demand by about 1. 5%.

Changes to electri ci ty use duri ng lockdowns have resulted i n si gni fi cant decli nes i n overall electri ci ty demand, wi th consumpti on levels and patterns on weekdays looki ng li ke those of a pre-cri si s Sunday. Full lockdowns have pushed down electri ci ty demand by 20% or more, wi th lesser i mpacts from parti al lockdowns. Electri ci ty demand i s set to decli ne by 5% i n 2020, the largest drop si nce the Great Depressi on i n the 1930s.

At the same ti me, lockdown measures are dri vi ng a maj or shi ft towards low-carbon sources of electri ci ty i ncludi ng wi nd, solar PV, hydropower and nuclear. After overtaki ng coal for the fi rst ti me ever i n 2019, low-carbon sources are set to extend thei r lead thi s year to reach 40% of global electri ci ty generati on – 6 percentage poi nts ahead of coal. Electri ci ty generati on from wi nd and solar PV conti nues to i ncrease i n 2020, li fted by new proj ects that were completed i n 2019 and early 2020.

Thi s trend i s affecti ng demand for electri ci ty from coal and natural gas, whi ch are fi ndi ng themselves i ncreasi ngly squeezed between low overall power demand and i ncreasi ng output from renewables. As a result, the combi ned share of gas and coal i n the global power mi x i s set to drop by 3 percentage poi nts i n 2020 to a level not seen si nce 2001.

PG 20

Coal i s parti cularly hard hi t, wi th global demand proj ected to fall by 8% i n 2020, the largest decli ne si nce the Second World War. Followi ng i ts 2018 peak, coal-fi red power generati on i s set to fall by more than 10% thi s year.

After 10 years of uni nterrupted growth, natural gas demand i s on track to decli ne 5% i n 2020. Thi s would be the largest recorded year-on-year drop i n consumpti on si nce natural gas demand developed at scale duri ng the second half of the 20th century.

The massi ve i mpact of the cri si s on oi l demand has already been covered i n detai l i n our Apri l Oi l Market Report.

Renewables are set to be the only energy source that wi ll grow i n 2020, wi th thei r share of global electri ci ty generati on proj ected to j ump thanks to thei r pri ori ty access to gri ds and low operati ng costs. Despi te supply chai n di srupti ons that have paused or delayed deployment i n several key regi ons thi s year, solar PV and wi nd are on track to help li ft renewable electri ci ty generati on by 5% i n 2020, ai ded by hi gher output from hydropower.

“Thi s cri si s has underli ned the deep reli ance of modern soci eti es on reli able electri ci ty suppli es for supporti ng healthcare systems, busi nesses and the basi c ameni ti es of dai ly li fe, ” sai d Dr Bi rol. “But nobody should take any of thi s for granted – greater i nvestments and smarter poli ci es are needed to keep electri ci ty suppli es secure. ” Despi te the resi li ence of renewables i n electri ci ty generati on i n 2020, thei r growth i s set to be lower than i n previ ous years.

Nuclear power, another maj or source of low-carbon electri ci ty, i s on track to drop by 3% thi s year from the all-ti me hi gh i t reached i n 2019. And renewables outsi de the power sector are fari ng less well. Global demand for bi ofuels i s set to fall substanti ally i n 2020 as restri cti ons on transport and travel reduce road transport fuel demand, i ncludi ng for blended fuels.

As a result of these trends – mai nly the decli nes i n coal and oi l use – global energy-related CO2 emi ssi ons are set to fall by almost 8% i n 2020, reachi ng thei r lowest level si nce 2010. Thi s would be the largest decrease i n emi ssi ons ever recorded – nearly si x ti mes larger than the previ ous record drop of 400 mi lli on tonnes i n 2009 that resulted from the global fi nanci al cri si s.

“Resulti ng from premature deaths and economi c trauma around the world, the hi stori c decli ne i n global emi ssi ons i s absolutely nothi ng to cheer, ” sai d Dr Bi rol. “And i f the aftermath of the 2008 fi nanci al cri si s i s anythi ng to go by, we are li kely to soon see a sharp rebound i n emi ssi ons as economi c condi ti ons i mprove.

But governments can learn from that experi ence by putti ng clean energy technologi es – renewables, effi ci ency, batteri es, hydrogen and carbon capture – at the heart of thei r plans for economi c recovery. Investi ng i n those areas can create j obs, make economi es more competi ti ve and steer the world towards a more resi li ent and cleaner energy future. ”

Credits: IEA 2020

EMOBILITY + | MAR APR ISSUE 2020

PG 21

OPINION

IS THERE ANY SILVER LINING FOR THE ELECTRIC VEHICLE MARKET POST COVID-19?

From the demand side perspective, high acquisition cost has always been a major deterrent in uptake of EV demand..

Electric Vehicles (EV) have been emerging as a promising solution for urban mobility, especially in context of rising pollution in Indian cities. It has been paving the way towards green mobility to make cities more liveable. The market appears enthusiastic to welcome and accept this shift, especially when the technology is offering inherent advantages for clean mobility. Certain concerns around the range, acquisition cost, and supporting infrastructure have also been expressed, and all the ecosystem actors have been trying to contribute their bit towards making the adoption of EV smoother and easier. The government has brought important policy changes, Original Equipment Manufacturers (OEMs) has put efforts to remove barriers through innovations, and consumers demonstrated readiness and willingness to accept this change. The EV market seemed almost ready to take off before the outbreak of the COVID-19 pandemic. However, the pandemic may offer different opportunities while also exposing the macro-level weakness affecting the actors of the EV ecosystem, i.e., supply side actors, demand side actors and other enablers, which facilitate the adoption of EV. The government has brought important policy changes, Original Equipment Manufacturers (OEMs) have put efforts to remove barriers through innovations, and consumers demonstrated readiness and willingness to accept this change. The EV market seemed almost ready to take off before the outbreak of the COVID-19 pandemic. However, the pandemic may offer different opportunities while also exposing the macro-level weakness affecting the actors of the EV ecosystem, i.e., supply side actors, demand side actors and other enablers, which facilitate the adoption of EV. From the demand side perspective, high acquisition cost has always been a major deterrent in uptake of EV demand. Now, due to COVID-19, the market has limited liquidity because of constrained economic activities and circulation of money in the economy. Moreover, this has added to the constraints on the pockets of the consumers who may now postpone their discretionary purchases and increase savings due to the uncertain future. Thus, the manufacturers need to recalibrate their strategies to adjust to the change in consumption pattern post-COVID.

EMOBILITY + | MAR APR ISSUE 2020

PG 22

From the supply side/OEMs perspective, there have been supply chain disruptions and vehicle sales have declined sharply. The automobile sector is forecasting a slowdown in EV production due to input material shortages (India is highly dependent on imports from other countries, especially for battery or battery components). Thus, EV manufacturers are facing immense pressure owing to component shortfall. Most of the OEMs are expected to deal with uncertain demand conditions, liquidity crisis, and ensuring the readiness of the suppliers, etc. New investments in evolving technologies may take a backseat, as there is likely to be a shift in the focus to clear the backlog of inventories and revive the prevailing operations.

Pre-COVID, the government had been actively supporting the EV industry to create an enabling environment, through various policies/subsidies, such as introduction of FAME Scheme by Department of Heavy Industries (DHI), guidelines by Ministry of Power and Ministry of Housing and Urban Affairs, NITI Aayog, etc. Now, the focus of the government is likely to swing towards resolving social and economic issues, investing in health sector and other priority sectors, which could result in a defocus on the EV plans and incentives offered by them in the past. This may lead to less investment in the EV domain for next two to three years.

STILL, AMIDST THE DISRUPTIONS IN THE EV ECOSYSTEM, FOLLOWING ARE SOME OF THE SILVER LININGS: Industry may see more innovation with partnerships, collaborations, localisations: The uncertainties and changes in the market has led to worsened revenue realisation for OEMs, and affected their working capital and cash flows. However, to resolve these issues and achieve economies of scale, consolidation and partnerships amongst several mobility players could be expected. This will also enable players to leverage and complement skills of other players involved in the EV ecosystem. It is possible to witness new technology partnerships and tieups of international players with Indian players leading to more localisation and expansion of EVs’ manufacturing in India. In-house capacity can be strengthened by devising innovative research mechanisms and would have the potential to become ‘Innovation and Technology Provider’ as it is wisely said, “Necessity is the mother of all the inventions”.

EMOBILITY + | MAR APR ISSUE 2020

PG 23

Government stimulus and thrust on infrastructure likely to expand: There has been a j olt to the economy due to the pandemi c.

However, the government may provi de more thrust on i nfrastructure development and rehabi li tati on to provi de sti mulus to the economy. It i s a ri ght ti me for the government to devi se i nnovati ve strategi es to reduce dependence on the forei gn counterparts and suppli ers and sti mulate i ndi geni sati on of EVs i n Indi a wi th a further step towards ‘ Make i n Indi a’ .

Preferred mobility solution in a postCOVID world: Public transit ridership is expected to stagger in major cities in India, while there could be burden on operators to implement strict protocols for hygiene of passengers. The commuters are likely to avoid public transport in post COVID-19 times and prefer private vehicles, at least in the immediate to medium term. The electric two-wheelers and threewheelers could be the potential solution in such a scenario as these are low-hanging fruits and would serve the growing needs of last-mile connectivity and ecommerce delivery agents.

Consumers are expected to be more sensitive towards environment post COVID-19 as there has been a marked improvement in air pollution levels (only two cities from India figured in the top 20 most polluted places in April 2020, according to the data from IQAir). In general, people are likely to readily accept the change and shift towards green mobility.

Thus, the segment can be expected to grow at a faster rate in post COVID-19 time than before owing to realisation of need for cleaner technologies.

EMOBILITY + | MAR APR ISSUE 2020

There are lessons to be learnt to enable economic recovery. Moreover, to withstand the change and provide sustainable mobility solutions, EVs can play a big role by fostering collaborations amongst stakeholders, stimulating indigenisation of components and sensitizing consumers about environment sustainability."

Author / Co-Author: Sumit Mishra Director- Consulting, Deloitte Touche Tohmatsu India LLP

Ms. Aashima Garg, Senior Consultant, Deloitte Touche Tohmatsu India LLP

PG 24

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EMOBILITY + | JAN FEB ISSUE 2020

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PG 37