The Centre plans to invest Rs 14,000 crore to promote electric vehicles (EVs) and hybrids and will offer incentives to manufacturers of such eco-friendly vehicles. Prime minister Dr Manmohan Singh unveiled the National Electric Mobility Mission Plan 2020 in New Delhi on January 9. The policy was first announced in the 2011 Union Budget.
The Mission aims to considerably reduce India's dependence on fossil fuels and envisages an expenditure of Rs 23,000 crore to promote electric and hybrid vehicles over the next eight years. Of this amount, the government plans to pump in around Rs 14,000 crore, with the balance to be invested by the auto industry in R&D and infrastructure activities. The government is currently fine-tuning the special incentives for the EV initiative with government funds to be released from April 2013 onwards.
The prime minister, while unveiling the Plan, said it will promote a cleaner transportation system in India. “Electric and hybrid vehicles have significantly lower level of emissions, including carbon dioxide emissions, which is one of the major contributors to global warming, and to processes of climate change. While promoting private transport through EVs is a positive step, we must
give far greater focus to the development of public transport using energy-efficient and alternative-energy technologies,” he said.
India has set a target to produce six to seven million green vehicles by 2020, of which 4-5 million are expected to be two-wheelers. At present, there are only 1,500 electric four-wheelers and about 400,000 electric two-wheelers in the country.
It is estimated that six to seven million EVs will help save 2.2-2.25 million tonnes of fossil fuel consumption annually, saving crude oil worth an annual Rs 13,000-14,000 crore by 2020.
To facilitate R&D and local manufacturing, some governmental incentives could include tax holidays to OEMs and component manufacturers, enabling greenfield plants to qualify for the benefits of the National Manufacturing and Investment Zones as proposed in the National Manufacturing Policy, besides duty exemption for equipment in OEMs' assembly units and soft loans for facilitating building capabilities. It is estimated that the cumulative net benefits from the EV initiative will be between Rs 39,000-43,000 crore by 2020.
In terms of infrastructure, Ambuj Sharma, joint secretary, Ministry of Heavy Industries and Public Enterprises, said that 95 percent of the battery charging will be undertaken at night at homes, with emergency charging infrastructure during the day to be made available at shopping malls and offices. The ministry is working out a public-private partnership mode for it, based on a population density grid.
Pilot project to kick off soon
A pilot project is set to kick off from April in a couple of cities including New Delhi with charging points to be set up based on the grid at a distance of 1-2km. State government and municipality support will be sought for the project. Talks with the Delhi government have already been undertaken with Delhi being the first city to roll it out.
In terms of R&D capability, OEMs have limited exposure in all EV components. Though some EV makers like TVS, Mahindra Reva, Hero Electric and Tata Motors have initiated some headway on EV parts like battery, power electronics and electric motors, foreign OEMs continue to carry out R&D work in their own countries. Hence, this capability needs to be significantly stepped up in India through technical licensing, alliances, JVs, acquisitions as well as through organic development involving time and investments.
Since the battery constitutes the most vital part of the EV powertrain comprising 40-50 percent of the manufacturing cost, R&D will have to target cost- effective battery solutions. Within the battery, cell materials and electronics form the most research- intensive areas with high priority areas being battery cell technologies, powertrain system integration, transmission systems in hybrids and electric motors and power electronics in EVs . In the US, battery cell research is the primary focus among component suppliers and OEMs are focused on EV transmission systems. In comparison, China has recently started basic research in the EV space especially in lithium ion batteries.
In contrast to the traditional internal combustion engine vehicles, where chassis and powertrain each contribute to 33 percent of the costs, in a four-wheeler BEV, the chassis constitutes only 16 percent of the cost and powertrain 67 percent of the cost.
Most of the technologies and components for EVs are currently imported with only assembly activity taking in India. Going forward, local R&D can help speed up the localisation process and lower the costs of owning an electric vehicle.
SHOBHA MATHUR