Environmental experts in India have long been debating on the
several positives that could emerge as a result of electric vehicles being encouraged
on roads vis-a-vis the conventional IC run vehicles. But now for the first time
perhaps, Feedback Consultancy, a leading research-based business consultancy in
India has stated that the Indian government’s focus on transforming mobility
through a shift to electric vehicle will increase viability of India’s power
The Indian power sector has been witnessing a flat rise in
demand, according to a research paper issued by Feedback Consulting. It said
that electric vehicles or e-vehicles segment also has the capability to become
an important contributor to ‘Make in India’ provided a possible challenge from
China is addressed, the paper entitled “The Dilemma of Choosing Electric
Vehicle Vs Hybrids Vs IC based Auto Development in India” stated.
Terming ‘fuel security’ and ‘reduction in carbon emission’
as strategic imperatives for India, the paper said, “A new source of power
demand in terms of electric vehicles will be highly appreciated by the power
sector. It may lead to a more stable power demand and that too from a paying
customer segment over the years and increase the viability of the sector”.
The research pointed out that most power plants have
operated at an average capacity of 55% in last 3-4 years. Power demand rose
4.08% in 2016-17 than a year ago whereas the 12th Five Year Plan had factored
in a growth of 7% in demand, the paper says, adding, “This combined with an
ambitious renewable energy targets and growth will lead to a serious case of
oversupply and the viability of a crucial engine of the Indian economy, i.e.
power sector, will be in serious question”.
The paper hailed the government for planning policy
initiatives under National Electric Mobility Mission Plan 2020 (NEMMP) and
Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME).
It stated that India is at the same stage in comparison to
China as it was in the solar industry 5 years ago. “Over the last 5 years, we
have seen how the Chinese solar imports have dealt a death blow for our panels
manufacturing industry and the Make in India story is a non-starter here. We
need to make sure that we do not get trapped in a similar situation in the EVs
story as there is every possibility that China will be presenting a huge
competition to the Indian industry in this business as well,” the paper added.
“We would need more action on getting Lithium manufacturing
in India move towards local manufacturing in a big way and not be a nation of
assemblers with core imports from China. This would need serious work in
securing the raw materials for battery manufacturing,” the paper pointed out.
Talking about the purpose of the research paper, Feedback
Consulting Vice President and paper’s author A. M. Devendranath said, “The
government has a clear intent to promote electric vehicle as a future mode of
mobility and various policies have been put in place to ensure that. This
transformation of mobility to electric vehicles will result in green shoots but
there are hiccups as well. For a holistic growth of auto sector, we have to
collectively work toward a solution that is all encompassing and does not leave
any loose ends. This research paper is our attempt in highlighting the green
shoots and hiccups while appreciating all that the government is doing”.
The paper pointed out that the move to electric vehicles
will need a considerable investment of Rs. 1.8 lakh crore in setting up
charging stations and other infrastructure for electric vehicle. This will
enable electronics design and manufacturing sector to have a significant play,
it added. “There will be a need to set up a Global Technology Center in motors
design and manufacturing space going forward and we should encourage global
firms to invest in India in this,” the paper said.
In its research, Feedback Consulting found that the auto
industry, which was mostly operating on internal combustion technology, was
gradually moving toward hybrids first before shifting to electric helped by
FAME policy. Under the circumstances, the paper stated, the immediate impact of
government’s push toward electric vehicle may be unsettling for the sector.
“One positive aspect that remains is that private 4-wheeler segment will still
require a longer time to move toward EV and this could be pushed toward hybrids
with some policy interventions. This will also help the Indian auto sector to
utilise the existing investments in this technology,” it pointed out.
The new GST rates, according to Motown India, have come as a
rude shock for the hybrid car segment. Post GST, hybrid cars have unfortunately
become more expensive!
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