Amitabh Kant: ‘Financial viability of EVs has made them more accessible to the masses.’

by Sumana Sarkar 22 Sep 2021


Making the government’s focus clear in terms of its transition to the next phase of mobility for India, NITI Aayog CEO Amitabh Kant delivered an all-encompassing keynote address at Autocar Professional’s EV Forum which kicked off on September 22. He said, “(India) should target for 100 percent electrification of new two- and three-wheelers sales in the near future. With the size and scale that India offers to these companies along with a reduction in battery price, they make a perfect fit for electrification.”

“Two-wheelers and three-wheelers constitute 80 percent of total vehicle sales. These vehicles are the low hanging fruits in the electrification journey,” he added, bringing out the need for step-by-step progress towards net zero.

He highlighted that as cities of tomorrow embrace transit-oriented development where public transportation is the backbone, “electrification will be a key determinant to ease of living to provide affordable, inclusive and safe mobility along with zero emission-based public transportation.”

The government has recently approved the PLI scheme for the automobile sector worth Rs 25,938 crore over five years. Kant pointed out that, “This scheme focuses specifically on electric vehicles and hydrogen fuel cell vehicles and their components which will drive investments worth Rs 42,500 crore and 760,000 additional jobs. It builds a complete bouquet of incentives for the electrification ecosystem in the country along with a $1.3 billion subsidy under FAME II.”

The NITI Aayog CEO added that the affordability aspect is what has led to the massive spike in EV sales and explained that the “incentive for battery manufacturing with PLI of about $2.5 billion and a GST of 5 percent for EVs compared to 28 percent for diesel/petrol vehicles . . . zero road tax, registration fees, permit waiver and others led to massive monthly spikes in electric two-wheeler sales.” New electric two-wheeler sales are up nearly 4 times to 9,000 units a month.

According to him, the upfront cost of electric vehicles is also falling rapidly due to technological innovation across the value chain. Alternative ownership models like battery swapping are actually making the cost of EVs at par with ICEs. He believes that, “Financial viability of electric mobility has made it more acceptable to the masses. Total cost of ownership parity has been achieved in all vehicle segments with a 5-year time span. The time span reduces much more in commercial vehicles like freight, delivery vehicles that have emerged as the first mover.”

“Electric three-wheelers are also on a high growth trajectory with EESL issuing a tender for supply for 100,000 electric three-wheelers. This is one-sixth of the total three-wheeler sales in India and will be a huge disruption to the market. India is also taking a lead in the manufacturing of electric vehicles with firms like Ola, Ather setting up manufacturing facilities,” Kant outlined, hoping that India can replicate its dominance in the conventional ICE two-wheelers in the electric segment too.

Kant pointed out that technological innovation and increased localisation by the likes of Okinawa and Revolt are also helping improve the pace of EV adoption. Fund inflows by VCs, “close to 672 million in the EV sector in the last couple of years,” also aided greater innovation here.  

Battery technology is evolving rapidly and prices have fallen nearly 90 percent in the last ten years to $137 per kilowatt hour. Kant says he “expects this will go below $100 per kilowatt hour by 2023.”

“The prices of solar in India have reached a record Rs 1.99 per kilowatt hour. This is unprecedented in the world. We can reap its benefits to provide green hydrogen at the cheapest prices in the world. This can be used to propel our heavy-duty vehicles like trucks and long-haul buses and achieve zero emission,” he added, bringing the focus on India’s hydrogen mission that can well be a game-changer for the automotive industry, especially for heavy-duty commercial vehicles. Lower refuelling times and the possibility of being produced entirely in India gives hydrogen an edge over any other form of electric mobility.

He signed off with an appeal to contain the raging climate change crisis and the role electric mobility can play in this transformation – “The world is also reeling under climate emergency and we need to act now to limit the rise in temperature by 1.5 degree. Transportation sector constitutes one-fifth of the total emissions and must move towards zero emissions. See the mobility industry playing a critical role in this transformation. The NITI Aayog is here to partner the shift from combustion to electric in the transition towards a shared, connected and zero emission world.”