3 Factors that must be addressed for electric cars to succeed in India

The popularity of electric vehicles is witnessing an uptick with more manufacturers throwing their hat in the ring. The Tata Nexon EV has become quite successful and looks set to end the year with sales of 2,500 cars. Similarly more than 1000 units of the MG ZS EV have been sold in India, and mind you these are expensive vehicles costing upward of 14 lakhs.

Maruti Futuro EV Concept

Car companies are working on locally manufactured electric vehicles, and as per the site ElectricVehicleWeb.in, there are 14 upcoming electric cars in India to expect by end of 2022. Going by few others, there are more than 20. In the meantime here are three factors that have to improve for these vehicles to succeed:

1 Charging Infrastructure

Depending on the source of data, India has between 1000-1500 electric vehicle charging stations. Compare this to China, the world's largest market for vehicles, which has over 500,000. Due to the lack of private parking spaces in India (about 5/10 car owners in India don't have their own parking space) public charging stations and charging parks have to be developed in a wide scale as a localized solution.

Government company Energy Efficiency Services Limited (EESL) has said that it is working on putting up 10,000 charging stations by end of 2023 and also plans 10 electric vehicle charging plazas by next year. It believes that these efforts would encourage more adoption of EVs and also work as an incentive for manufacturers to introduce electric vehicles in areas where charging infrastructure supports daily usage. Work is on to install charging poles with EESL signing an MoU with BSNL this year for the installation of 1,000 public electric vehicle charging stations.

On the other hand, companies like Tata Power are doing their bit to help the EV revolution along. Tata Power has announced that it would install 700 charging stations this fiscal year. These fast-charging stations would help EV buyers plan long distance journeys without hassles. Manufacturers like MG Motor and Ather Energy are also building their own network of charging stations through dealerships and partnering with coffee shops and restaurants to help customers beat range anxiety.

Tata Sierra EV concept

2 High Price Of Electric Vehicles

The average cost of electric cars in India (considering only the long-range & high voltage platform vehicles) is over Rs 14 lakh, much higher than the average INR 5-6 lakh that one pays for an economy model in the petrol car segment. Unless the cost of electric vehicles comes down substantially, they would struggle to break out of the single digit market share figure. The single biggest contributor to the price of the electric car is the Lithium Ion battery that is imported from China or South Korea today by all players.

How are car manufacturers tackling this? For starters they are choosing vehicles that are already manufactured with local parts for the glider. For instance, M&M has chosen the KUV100 to launch its electric vehicle that will cost Rs 8.25 lakh, while Maruti is developing an electric car on the aggregates of the Wagon R. These sub-10 lakh rupee electric cars do have limitations as their real world range would not be more than 150 km, powered by low voltage electrical architectures, but they make them affordable.

Looking ahead, companies have started localization programs for electric vehicle components. Tata Motors is tapping into the resources of the group companies to get a lead on competitors. Tata Chemicals, for instance, is now working on producing Li-Ion cells at its plant in Gujarat. Tata Components (TaCo) is working now to localize the motor to bring down the cost. The company which ultimately solves the problem of localization would be the first to have a lineup that is affordable, appealing and profitable.

Renault Kwid EV

3 Range Anxiety

Range anxiety is when a consumer suffers from realizing that his or her electric car might not have enough battery charge to reach the destination. Due to the high cost of batteries, manufacturers have to choose sub-20 kWh configurations to keep the price of the car affordable, And a smaller battery means more frequent need to charge it which causes range anxiety.

With rapid advancements in battery technology and the falling price of Li-Ion batteries (from around USD 1000/kWh in 2010 to around USD 125/kWh in 2019), range anxiety is a temporary problem for car companies developing EVs. Battery costs during the first half of the decade are likely to make electric cars on par with petrol engined variants for acquisition cost (without subsidy) and second generation electric cars launching in every segment are likely to have 350+ km of driving range in the ARAI tests.

What are the factors today that stop you from buying an electric car?

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