India imports around 90 percent of its crude oil requirements. Of the total oil import, 70 percent is used in the transportation sector. While the auto industry has taken several initiatives over the years to increase vehicle efficiencies, curb tailpipe emissions and develop alternative fuel technologies to provide sustainable mobility to the masses, the fact is that fossil fuel is an exhaustible commodity.
Industry is convinced that embracing alternative fuels and green tech is the only way to secure the future of the coming generations as well as the energy needs of the country. Among these, electric and hybrid mobility options are considered the most promising in the short/medium term. With this background, the Budget announcement breaks new ground.
So, what framework does India need for such a path-breaking initiative and what challenges do we face in making electric/hybrid mobility a reality? First, we need to dispel the perception that such vehicles are only for the rich. Electric and hybrid vehicles are the way our next generation will probably go as availability of fossil fuels gradually declines. Therefore, it is vital that India becomes self-reliant in this area. Also, as scales and volumes grow the costs reduce, bringing the new technology to the masses. Mobile telephony is a classic example.
Returning to the challenges of EVs, the first is of technology and comparative performance. Globally available EV technology is still nascent, making its viable commercialization and wide acceptance by consumers a challenge. Electric batteries are very expensive and the charge does not last long enough to make it an attractive mobility option compared to conventional vehicles in terms of performance. To overcome these shortcomings, research is underway to improve both EV performance and range. This leads to the hybrid option which may well become a forerunner to pure EVs in the medium term. The second challenge will be the high production cost as well the cost of ownership of such vehicles. Conventional financing of such vehicles may not work. We may need to evolve innovative financing schemes including different methods to reduce the capital cost by battery leasing schemes to make them more affordable and acceptable to the consumers. Maintenance, durability, and reliability issues would also call for attention. Active governmental support in terms of incentives and infrastructure is critical. Countries in the EU, USA, Japan and even China have committed billions of dollars to support industry- led R&D in this direction.
Thirdly, there would be need for an appropriate infrastructure to be developed to support such vehicles. A large number of charging stations would have to be set up in the same way as petrol pumps exist today. Battery exchange centres where consumers could exchange a drained-out battery with a fully charged one may be required. The other elements of an appropriate infrastructure could include policy prescriptions that exempt EVs from duties/taxes or parking charges to aid the transition to such vehicles.
Fourthly, a new set of technical, safety standards and regulations will have to be evolved for such vehicles including homologation and type approval systems which will ensure that such vehicles are safe for their occupants as well as for pedestrians. For example, EVs being noiseless can pose a safety hazard for pedestrians, especially the physically challenged like the blind. Therefore, the safety aspects of such vehicles would need to be discussed and debated.
Finally, there is a ongoing debate whether EVs would really be environment friendly. Electric vehicles may not generate any emissions directly but they use electric power, which is generated largely using coal. The additional electricity requirement would result in more coal being burned somewhere else which would be tantamount to just shifting the pollution and not achieving real reduction in the carbon emissions from the transport system.
SIAM, together with the Ministry of Heavy Industries, has commissioned a study to cover these issues in detail and to help in developing well thought out recommendations. These recommendations would be useful in the development of the National Strategy for Electric and Hybrid Mobility for the country.
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