To avoid the potential derailment of India's ambitious electrification plan of 50000 buses, Nitin Gadkari – the Minister for Road Transport and Highways is planning to engage with all the stakeholders– the power ministry officials, bus makers, financers and state transport undertaking and help in resolving the challenges around financing.  

Gadkari who was speaking at the ABP Ideas of India Summit last week admitted that his ministry is aware of the challenges of EV Bus OEMs especially with respect to financing them.

Gadkari said that he is objectively seeking to engage with multiple stakeholders such as the Ministry of Power that has issued the electric bus tenders and individual state transport undertakings who will be inducting them into their fleet to find a solution to the reluctance of leading OEMs like Tata Motors and Ashok Leyland to participate in future tenders. 

“It is a unique situation to bring all the stakeholders on the table and address these challenges. We are aware and my ministry is working towards resolving these issues,” Gadkari said in a one-to-one chat at the Summit.

India's rise in two-wheeler EVs – spectacular
He further said that despite such minor speed bumps the success of India's overall electrification program has been "spectacular". 

He said the electric two-wheeler success story has already put India on the global EV Map and how the homegrown start-ups have created a unique niche in the Rs 70,000 price category and its success was not anticipated by the legacy two-wheeler OEMs, he pointed out.

"I had the founder of India's largest two-wheeler company admitting that they didn't take my prophecy seriously three years ago and made the mistake to assume that EVs won't work in India, due to multiple challenges," Gadkari recalled.

Another factor Gadkari said will further accelerate EV transition is the investment by domestic EV players have targeted in lithium-ion battery manufacturing.

He said India discovering lithium deposits in J&K is an encouraging development for the entrepreneurs who have taken big bets and put up their factories backed by emerging rich component ecosystems preparing them to handle the brisk sales across categories. 

Lithium prices heading southwards
The MORTH minister pointed out that global lithium prices are coming down and it will help the industry get EV products on par with ICE. 

"From a high of $130 kWh to currently US$ 115kWh currently, the prices will further cool down to US$ 100 kWh" and negate the high cost of batteries for OEMs bringing their offering at par.

Gadkari said global benchmark lithium prices which were about $90,000 a metric ton in November have steeply dropped by 33% to $60,000 a metric ton as of now, with spot prices likely to further depreciate to $53,304/ton in the near term.

Goldman Sachs analyst Aditi Rai who tracks the shift in global commodity prices forecast says that with strong supplies coming in from Australia is expected to add supplies of 173 kilotons and China lithium supplies to grow to 75 kilotons. 

The 12-monthly forecast by Goldman Sachs for lithium is pegged around $34,000/t.

This forecast takes into account global supplies to grow by 34 percent year on year and annual demand tapering to 25 percent creating a 10 per cent surplus.

The other rare metals like cobalt and nickel prices too are heading southwards due to the slowing down of the China EV market, and overall recessionary blues in Europe & US denting global auto sales.

But India is growing much faster than other global auto capitals and the shift to EVs is expected to further push the growth of the domestic auto industry the MoRTH minister said.

“India is all set to become the EV & auto capital of the world and push domestic auto industry growth from current 7.5 lac crore to 15 lac crore with the industry to generate additional 9 crore jobs”.  

NHAI's ballooning debt is not a matter of concern
Speaking about infrastructure push he added that public transport should get priority and the road infrastructure has to catch up.

Gadkari is looking to speed up intra-city highway construction in Maharashtra along with the Mumbai Nagpur Mahasamruddhi Marg which is under development. The other routes like Nanded to Pune which is a 10-hour drive will be motorable in 4.5 hours flat, claimed Gadkari. The 8-hour drive from Washim to Pune is also expected to be cut to under four hours  along with other marquee projects being pursued by NHAI.

When questioned at the Summit on the NHAI’s debt which has catapulted to Rs 3.2 lakh crore in FY2022, the Gadkari said that he is not worried about raising funds as his plan to raise Rs 1,500 crore through NCDs offered The National Highways Authority of India Infrastructure Trust’s (NHAI InVIT) has been oversubscribed by seven times from both retail and institutional investors.

"All NHAI Projects have an IRR which ranges from 13.5 to 15 percent."

He also informed that total toll collections which is currently pegged to around Rs 20,000 crores is expected to cross Rs 40,000 crores by the end of the calendar year and touch Rs 1.4 lakh crore by end of 2026-27 basis Rs 35,000 crores of road being developed under the Bharatmala project. 

The numbers do add up as India's net toll receipts including state highway toll numbers have shot up by 46 percent from ₹34,77 crores in 2021 to ₹50,855 crores in 2022.

He also said that India's current requirement of Rs 3 lakh crores for road and infrastructure development is very well covered by his ministry and the government can easily scale up the fundraising to undertake projects worth 5 lac crores in the near future 

Maharashtra to boost highway development
Maharashtra Chief Minister Eknath Shinde who was also present at the Ideas for India summit said the state will become India's growth engine as his government has "planned 5000 km of access control highways that will connect a majority of the 36 districts in the state."

Maharashtra State Road Transport Corporation (MSRDC) is currently working on a 760 km Shaktipeeth expressway that will connect the Nagpur-Goa and open pathways for the under-developed Vidarbha, Marathwada regions to get linked with the Konkan belt in the state.

The Nagpur Goa expressway will start from Wardha district at Pavna and finish at Patradevi on the Maharashtra-Goa state border.

Other than the Nagpur-Goa expressway, MSRDC portfolio which CM Shinde continues to retain is working on projects such as Jalna-Nanded and Jalna-Nashik connectors to the Nagpur-Mumbai expressway, 

CM Shinde said that a few other highway projects that the Centre is implementing — the Surat-Chennai expressway, Aurangabad-Pune, and Pune-Bangalore highways — will also boost connectivity within certain districts of Maharashtra.