Electric Vehicles – everyone is talking about it but is it actually good for the environment? Electric vehicles (EVs) are rapidly becoming the automobiles of the future. With rising petrol prices, more people have been opting for an electric vehicle. Additionally, these green vehicles are more environmentally friendly. EVs are not yet mainstream, despite the entry of several new Indian companies into various segments of the EV value chain, significant capital investment in the space, and large-scale execution efforts. It is 2021, and it appears as though we have finally reached the tipping point for EV adoption.
The Maini Group’s Reva was unveiled as India’s first all-electric vehicle amid great fanfare and nearly seven years of development. Chetan Maini of the Maini Group was ecstatic at the prospect of adding a powerful voice to the global conversation about electric mobility as the vehicle took to the road. Reva quickly established itself as the most affordable electric vehicle in the country and quickly became one of the world’s best-selling electric vehicles, with units sold in 24 countries. Reva’s success in 2001 was based on a significantly lower total cost of ownership (TCO) than other vehicles on the road, a sufficient range for regular intra-city commutes, a high initial torque, the promise of reduced reliance on international crude oil imports, and the associated aspect of sustainability.
We didn’t see Electric Vehicles – the sustainable sister of the flying cars by 2020 take the streets of the country. The failure of adoption was due to a variety of factors.
1) Failing to highlight the sustainability aspect:
The product was not designed to be environmentally friendly, and EVs failed to provide a sufficient range for intercity travel. The manufacturers failed to consider and implement this aspect. EVs were considered another alternative for the usual petrol vehicle but they failed to showcase how it would benefit the consumer and the environment.
2) Lack of charging infrastructure:
The lack of charging infrastructure is widely regarded as the primary reason for low EV adoption. People did not know where they would charge their vehicles. There were a select few electric charging stations made available to the public and even fewer amenities for at-home charging
3) More expensive in comparison to Internal Combustion Vehicles:
EVs are sold at a 20% and 50% premium over Internal Combustion (IC) vehicles for two-wheelers and four-wheelers, respectively. This high initial cost is unfavorable for value-conscious Indian consumers who would prefer a less expensive IC vehicle.
But these problems are rapidly being addressed. Today, the Indian government offers a variety of subsidies through the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India (FAME) Scheme, incentivizing people to choose EVs over conventional vehicles. “We didn’t have to pay a road tax of Rs.1,00,000 which was great and I also didn’t have to pay a registration fee. So if you buy any other car, you’d have to pay road tax, and skipping that was quite nice,” said Sahar Mansoor, founder of Bare Necessities and a regular user of EVs.
In general, consumers believe that purchasing an electric vehicle will be expensive. While the initial cost of an electric vehicle remains high, it is critical to consider the total cost of ownership. The total cost of ownership (TCO) is the lifetime cost of running a vehicle, which is the sum of the upfront cost of purchasing the vehicle, running costs (fuel/charging costs, and maintenance costs), and resale value. “We decided to pick this up as an experiment. Mahindra seems to have done a decent job at building an EV, and although it was initially more expensive, we calculated the cost over a period of 5 years and it turned out to be much lesser. I now spend less than Rs.800 on charging prices per month. I don’t think I would have gotten that if I had an IC vehicle” said Avijit, the Director of Jhatkaa and a user of EVs since 2011.
Although Avijit’s main reason for buying an EV was not the economic cost but the environmental aspect of it. The greatest benefit of electric vehicles is the contribution they can make to improving city air quality. Because electric vehicles do not have a tailpipe, they emit no carbon dioxide when driving, reducing air pollution dramatically. Simply said, electric vehicles clean the streets, making our cities and towns safer for pedestrians and cyclists.
His mother Sherin, also attested that she enjoys using the vehicle as it makes little to no noise on the road. “The ease of charging the vehicle and using it is why I prefer it over an IC vehicle,” she added.
The awareness about EVs has started. Yukti Bhardwaj who is the CEO and founder of Aimo Tech Mobility added that while there is more awareness about EVs and there are subsidies in place to make EVs more affordable, the government still has some way to go in understanding the actual problems of EVs. “The most visible problem is that the government is yet to set up charging infrastructure or provide parking space.” There is a tremendous opportunity to create tech-first charging platforms or networks that are form-factor and brand agnostic and can support both regular and fast charging. In the short term, charging would be a more interesting play than swapping. Swapping works best in the long run because it provides multiple benefits to the consumer. Through seamless, swapping infrastructure is much more capital-intensive than charging infrastructure, making it an unfavorable short-term play given the current low level of EV adoption. In the future, we may see hybrid models that combine charging and swapping.
But charging infrastructure isn’t the only challenge to scaling up. “Scaling up is when you are looking at new companies to set up new manufacturing units with innovative models. And the second way to scale up is shifting existing technologies to accommodate EV technology. When you talk about existing IC vehicles, they have over 100 parts and different companies make each of these products so when we talk about shifting to EV, we need to talk about how they will make the shift. The conversion needs to be there for existing IC manufacturers and they should be encouraged to shift to EVs and help startups achieve scale.” added Yukti.
Despite these challenges, there are a lot more EVs on the road today than before. Sudhanva Atri, who worked on the marketing side of Ather said, “There’s a lot of buzz around EVs. More so on the 2 wheeler side than the 4 wheeler space. There’s a lot of excitement from people as well, there are a lot of people adopting to it for various reasons – environmental or economical in the long run. I definitely see a huge rise coming up in the years to come.”
The future of electric mobility has arrived, paving the way for a slew of new innovations.
Now is the time for the entire ecosystem to jump on the EV bandwagon in order to accelerate its mass adoption. Product innovation will have a greater impact than the establishment of charging/swapping infrastructure. While four-wheelers have some catching up to do in terms of upfront costs and total cost of ownership, two-wheelers will set the stage for mass adoption.