Can the Indian car market go all-electric by 2030?

• Published On: 9 June 2017
• 1258 Views

The government has set an ambitious target to sell only electric cars in the country by 2030.

Power Minister Piyush Goyal revealed the government’s push for widespread adoption of electric vehicles and its ambitious target for 2030. “The idea is that by 2030, not a single petrol or diesel car should be sold in the country,” he stated to PTI.

A study conducted by Niti Aayog, the government’s planning body, found that switching to electric vehicles could result in savings of US$ 60 billion in fuel costs, and will help cut 1 gigatonne (GT) of carbon emissions in India by 2030.

While the goal is laudable, the 2030 target comes across as overly ambitious. “I think it is a very ambitious target. The government should work on setting up fast charging stations in the near term to enable smooth adoption to fully electric vehicles,” Mahesh Babu, CEO, Mahindra Electric stated.

Vishnu Mathur, director general, Society of Indian Automobile Manufacturers, said, “I’m sure that we won’t be able to achieve 100 percent electrification by 2030, but even if we are able to achieve 50-60 percent, it will be fantastic.”

There were a total of 22,000 EVs sold in India in 2015-16, of which only 2,000 were cars. A network of charging stations needs to be set up to aid widespread adoption of EVs. The country’s current EV charging infrastructure is tiny in comparison to other countries that are tackling electrification in a phased manner.

Japan now has more charging points than petrol pumps. And as of 2016, China has around 1,50,000 public charging stations and the US has around 42,000. The lack of charging infrastructure is only one of the reasons why EVs have had difficulty selling. High purchase cost and high cost of replacement batteries are other issues.

Currently, most batteries are imported, primarily from China, so our country needs to look into local manufacturing of batteries. Suzuki, Toshiba and Denso recently announced plans to jointly produce lithium-ion battery packs in India. But India’s carmakers have barely put any weight behind their EV projects.

"It will be very difficult to change things from tomorrow. We need to communicate well with concerned ministry and work in the new direction," according to Kenichi Ayukawa, managing director & CEO, Maruti Suzuki.

The country needs larger allocations under the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme aimed at supporting hybrid/electric vehicles. The Heavy Industries Ministry estimated a total requirement of about Rs 14,000 crore for the programme, but the government has only allocated Rs 175 crore for FY2018.

Our country, which finds itself years behind the curve in EVs, will start the process on the back foot. The answers to lots of questions remain ambiguous. Will carmakers find the vast investment needed to focus on EVs justifiable? Should the government not focus on hybrids? And what is the plan for energy generation and distribution?