Technical Insight
We need to change our strategy! MOHAN SATYARANJAN
Taqanal Energy Pvt. Ltd.
T
o have less than 3% market share for something that is clearly acknowledged to be the most socially responsible A total of 50,866 vehicle were sold in India in the month of Dec. 2021 . While it was a 239% increase YoY (14, 978 EVs were sold in Dec. 2020), it was less than 3% of the total vehicles sold in the same month. In other words, India is still not buying EVs. thing to do, and despite a lot of government support, is puzzling. In the year 2019 (the last pre-Covid year) the total number of vehicles old in India was 24.58 million, including 21.18 million twowheelers. The total number of vehicles sold between 2011, and 2021 I higher than 200 million. A closer look at the data corroborates the obvious fact that more than 80% of all vehicles in India is in the 2W segment. Among EVs, more than 98% of the volume is in the 2Wheelers & 3Wheelers (roughly equal numbers). Among E3Wheelers, significantly more passenger vehicles ~90%) are sold than cargo vehicles (~10%). Very low penetration of EVs despite subsidies, high petrol/diesel prices, and serious promotional efforts is beginning to cause worry to players in the eco-system. ICE vehicles (Petrol/Diesel/CNG/ LPG) continue to sell in much larger numbers (about 40x). The supply chain of ICE vehicle parts is already well developed, and ICE technology has reached a stage of maturity that has evolved over 100 years. Six out of the top 10 most polluted cities in the world are in India . Healthcare cost (public as well as private) are rising due to diseases caused by pollution. There is very good general awareness about the ill-effects of pollution, and the fact that vehicular pollution contributes to 40% or more of the total pollution. Electrification of transportation will make a significant different to pollution levels. India’s oil import bill in FY22 reached
22 | Telematics Wire | February 2022
67% of that in FY21 in just 5 months! India’s oil bill in FY22 may exceed $100 Billion (more than 800000 crore Rupees)!
Why is it a problem? India needs to be electrifying its transportation on a war-footing to be able repurpose the oil-import dollars to something more socially beneficial, and also significantly reduce pollution. EV sales need to go up significantly. ICE vehicles have a well-developed supply-chain, and high volumes have brought costs down over the years. The current gap of 40x between ICE vehicle sales, and EV will continue to keep ICE vehicles more attractive unless extraordinary efforts are made. Low volumes of EVs will prevent supplychain for the EV specific parts (Motors, Controller, Batteries) from developing. Poor economics of scale will inhibit success. Governments (state as well as central) have been providing incentives for last several years. Sincere efforts have been made to create demand as well as help the supply side. However, a less than 3% share of the pie after years of hype, and hope is certainly not good enough. Hype collapses are typically catastrophic: public interest nosedives if the higher hopes created due to the hype are not delivered. Collapse of public interest in EVs will be catastrophic: Pollution will continue to increase, and oil import bills will continue to swell.
Why are so few EVs selling? The commonly cited inhibitors of EV adoption are: Range Anxiety: While more than 90% of the vehicles seldom do more than 40 Kms a day (65% of two-wheeler rides are less than 5 Km!), fear of getting stuck in the middle of nowhere on a rainy day with no charging stations nearby prompts people to look
for higher, and higher range in the vehicle. OEMs fit bigger, and bigger batteries to increase the range. Batteries are expensive, and heavy. Bigger batteries make the vehicle expensive, and need higher powered motors to move the heavy battery around. Higher powered motors consume more battery power, and OEMs have been experimenting to find the sweet-spot. High Initial Cost: Bigger batteries increase the cost, and it is common to find the battery costing 50% or more of the cost of the EV (you can buy two ICE TATA Nexons for the price of one TATA Nexon EV, and still have money left for an international vacation!). Over the life of the EV, more energy would have been spent carrying the battery around that the occupants or the cargo! Safety Concerns: EVs are in infancy, and the technology is still evolving. Fire incidents have happened, and they do create panic. OEMs are challenged to meet price expectations, and cheap, poorquality imports have to be considered. The regulatory framework does not enforce high quality standards on all batteries. Maintenance Concerns/Reliability Issues: With extremely low penetration of EVs, spare part availability is nonexistent. Trained technicians are also not available everywhere. Even minor failures cause the vehicle to be unusable for longperiods of time. Bad news spreads fast, and as everybody fears being stranded, a lot of people want to wait till EVs become as reliable as ICE vehicles. Lack of Finance Options: Vehicle purchase financing institutions have been hesitant in financing EVs, as there is no established & universally accepted method of determining the ‘Remaining Useful Life’ of an EV. Battery being the most expensive part, causes the maximum concern. Resale Value/Durability Concerns: Lack of an established method to determine, ‘Remaining Useful Life’, also makes it
