Future is electric: How India Inc should support the EV ecosystem

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The world is facing the challenges of climate change, and sustainability has emerged as the solution for a secure future. Governments are re-dedicating themselves to creating sustainable pathways globally. Industry and society are integrating climate change goals to reflect accountability for an environmentally-conscious world. This journey towards a clean, green and sustainable future is being enabled by emerging technologies and breakthrough innovations. Transition to electric vehicles (EVs) is emerging as one such breakout sustainable solution and India has identified the large-scale adoption of EVs integral to meeting its climate change goals.

India’s EV Opportunity
Our country is on course to fulfil its commitments made under the Paris Agreement in 2015, emerging as the only G20 nation to meet its milestone targets. A more concerted push to generate clean energy and cut greenhouse gas emissions will be crucial to India’s success in achieving its 2030 climate goals.

With India’s fuel import bill expanding to almost Rs 6,000-crore annually, cutting oil consumption is not only an environment-friendly imperative but also a significant economic target. Vehicular emissions contribute almost 30 percent to urban pollution levels. A notable reduction in fossil fuel consumption will save billions of dollars for the Indian economy while ensuring a clean, green future. Electric vehicles will be at the centre of the emission-free era, sustainably cutting pollution levels by one-third and reducing oil imports by almost 20 percent.

Electric mobility, with its inherent advantages, will be the future of transportation in the country. Waking to its immense potential, manufacturers are already adopting new technologies and developing new capabilities to usher in the electric era.

Onus on industry
The onus is now on automotive companies and industry stakeholders to drive the EV transformation. As the world’s largest two-wheeler market and a top 5 four-wheeler market, India is a key stakeholder in the global automotive market and will have to play a central role in developing and implementing new-age mobility solutions.

From being a centre for new product development and low-cost manufacturing, the need of the hour is to become a hub of innovation in emission-free mobility. The challenge is not only to go electric but also become eco-friendly by ensuring that the electricity used to charge EV batteries comes only from renewable sources, rather than shifting the burden of emission from the vehicle to the power plant that supplies the grid.

Corporate India can play a strong supportive role in enabling and promoting the transition to eco-friendly EVs. For instance, the Godrej Group is devising plans to incentivise employees to make the switch to EVs.

The company has tied up with an EV fleet provider to transport employees between the corporate office and the Mumbai airport. While these efforts are relatively small compared to the enormity of the climate challenge, such steps, if emulated by other corporates, can incrementally generate the critical mass that is required to popularise EVs and promote their adoption.

The way forward
While the policy framework of the government will go a long way towards promoting EVs in the country, their adoption would also depend on varying factors—the cost of the vehicle, distance covered on a single charge and, most critically, the availability of charging infrastructure.

Given that India is a nascent EV market with limited capabilities for charging them, their increased adoption will necessitate the establishment of a widespread public charging network in the country. A 2018 McKinsey report estimates that India needs about five million public charging points at an investment of approximately $6 billion. Alongside setting up the charging infrastructure, there is also a need to upgrade the existing electricity supply infrastructure to make it EV-ready since the increased power demand will stress the grid, particularly in areas with a high concentration of EVs.

As India finds ways and means to solve the infrastructure bottlenecks, the country also needs to look at ways to mitigate the financing challenges such as limited financing options, high interest rates, high insurance costs, and limited loan opportunities for EV customers.

Further, with batteries accounting for a significant part of EV costs, it may be prudent for India to invest in research of alternative battery technologies using different metals. Aluminium, sodium and zinc-based batteries are emerging as viable alternatives to the widely-used lithium ones.

India has made a good start in the push to EV adoption. Tailor-made policy initiatives, rapid implementation and industry-friendly regulation will be essential to ensure EVs become a mainstream transportation option in the country.

The writer is a General Manager of Sustainability, Good and Green at Godrej Industries.

The thoughts and opinions shared here are of the author.