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How far behind is India in the global EV race?

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If we compare India itself to what it was a decade ago, we can see that a long journey has been taken in every industry of science. But the journey is not yet finished; we are setting the stone to keep moving forward and conquering the unknown zones and heights that have never been thought about.

So, as we talk about modern science and technology, let’s observe how tech-savvy India is or is becoming:

  • As per JMK Research, EV sales are low; they are estimated at around 450,000 in 2021, quite a bit less than the total vehicle sales of roughly 1%.
  • As per Niti Aayog, 30% of private cars, 70% of commercial vehicles, and 80% of two-wheelers and buses are aimed at being electrified by 2030.
  • As per IEA reports, China, a key competitor to India, experienced a penetration rate of homegrown brands such as BYD and SAIC of 15–25% due to supportive policies.
  • As per EY Parthenon, the key challenges to limiting the adoption of EVs are consumer awareness and charging infrastructure.
  • As per PIB, in India, the majority of EVs are two- and three-wheelers rather than four-wheelers. Lack of foreign auto brands.
  • As per Autocar India, Tata and Mahindra are leading the EV market, but with a limited range of models.
  • As per Reuters, local automakers are asking for more government-supported EV policies, and subsidies are needed for the EVs to be a success.

One of the key challenges to be addressed affecting India’s position in the EV market is consumer awareness and charging infrastructure.

  • Most Indian consumers are limited in their knowledge about EVs and are quite unfamiliar with the technology, models, and capabilities.
  • Customers are worried about the inadequate range and the fear of running out of charge in mid-journey due to a lack of charging infrastructure.
  • EVs are expensive to purchase compared to ICE models in India.
  • Most Indians are interacting positively about their first-hand EV experience.
  • Even the problems of the OLA scooter catching fire and other mishap accidents led to a poor picture of EVs in India.

Another major issue for India to combat is the lack of charging infrastructure.

  • As per EY reports, there will be 1,800 public EV charging points in 2021, with limited recharging options for longer trips.
  • Multiple standards, such as CHAdeMO, CCS, and Types 2 and 3, are on the market, creating major confusion.
  • Electrical infrastructure needs to be upgraded to support large-scale fast charging stations.
  • Installing home chargers is also quite challenging in most Indian housing arrangements.

Even though the Indian government is pushing the EV movement strongly, the EV technology market is failing other major auto markets:

  • As per the NITI Aayog report, domestic EV brand startups or manufacturers are way fewer than in China, so consumers are presented with many choices.
  • As per UNESCO, India spends less than 0.7% of its GDP on R&D, which is very low compared to the USA, China, and Germany.
  • As per Invest India data, robust auto manufacturing ecosystems are lacking in India, such as lithium cell production, motors, semiconductors, etc.
  • As per the OECD, India’s tech exports are less than 1%, indicating low international competitiveness.
  • As per DH analysis, dependency on foreign technology is higher in countries such as China, Japan, and Korea.
  • As per WIPO, between 2015 and 2010, India registered only 50 EV-related patents compared to over 15,000 for China.

It indicates that India lacks the technical expertise and foundation for a globally competitive market and to be self-reliant in EV technology and the manufacturing sector.

Depending on the current trends and patterns, India needs at least 15–25 years to reach the world-dominating market in the electric vehicle sector.

  • As per IEA reports, in 2021, India had around 450,000 units of EV sales, which is considered to be over 40 times lower than China.
  • In 2021, India will also represent only 1% of global EV sales, whereas China will dominate with over 50% of the market.
  • A strong domestic EV industry and manufacturing sector are lacking in the Indian market, whereas China is dominated by multiple homegrown EV brands.
  • As per Mordor Intelligence, India’s EV adoption rate will reach over 6 million annual sales by 2030, whereas a 25–35% rise in EV sales is observed in China, Europe, and the USA.
  • Well, to reach India’s No. 1 position in the EV market, it needs to surpass at least 10 million units annually.
  • India also needs a robust domestic EV supply chain spanning R&D, battery production, manufacturing, and charging infrastructure.
  • Not before 2040–2045, India can reach the ambitious position of being No. 1 in the EV market.

However, if we try to analyze the achievement to be done in 10 years and not wait for such a long time, What do you think is practically possible?

  • Widespread building of fast charging stations and upgrading power grids across India’s major highways and cities in 5 years may enable the route to easy fueling of EVs.
  • Aggressively increasing consumer incentives and improving affordability with huge purchase rebates may force the mass adoption of EVs.
  • A competitive domestic supply chain for lithium-ion cells, batteries, motors, and components within 5 years to reduce costs.
  • Collaboration with leading EV firms in technology, R&D, and the local production sector for fast-track development.
  • Streamlining land acquisition, environmental rules, and other bureaucratic hurdles to accelerate the infrastructure
  • The major issue is an investment of a huge amount, over $20 billion over five years, specifically to modernize and strengthen the electricity infrastructure.
  • Expanding public transit electrification through buses and rail networks.
  • Issuing a mandate to provide a maximum 500-kilometer range and fast charging capability by 2025 for automakers.

It is practically impossible for India to achieve such an ambitious target and challenging timeframe in 10 years.

  • A huge capital investment of over $30 billion is needed for all the major upgrades.
  • Facing issues with land acquisition, technical, and other resource-related hurdles.
  • Even changing an existing structure in such a short period of time will present huge logistical difficulties.
  • Upgrading massive grid transmission infrastructure is huge for such a large geography.
  • One of the major factors is that even after all the investment, it does not guarantee that consumer behavior will change rapidly or that they will have the financial capacity to make such a move.

It will take time even for manufacturers to gain the expertise and knowledge necessary for more successful EVs to be on the road. Hence, the 20–25 time period is apt for India to come steadily into the EV market.

Even though Indian consumers are tech-savvy and enthusiastic about tech-related sectors such as e-commerce, apps, and streaming, they are quite cost-conscious about EVs, lack EV knowledge, and have a lower range.

Despite the hurdles, the market will catch its pace once the choices and options for EVs become more and more seamless over time.

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