The world is witnessing a new Revolution — The Mobility Revolution. Access to reliable, affordable, and cleaner transportation can go a long way in promoting the economic and environmental prosperity of a country. As for India, our economy is expected to grow rapidly in the coming decades, and transportation demand is set to grow proportionately. The automobile industry is going to change more in the next 5–10 years than it has in the last 50.
Green Future is just getting started!
Image Credits: Prem Nath Pandey, 2019
With each country declaring their net-zero targets and timelines to achieve them, it is crucial to not ignore that Electric Mobility will play a significant role in achieving these targets. Electric mobility is a promising technology that can transform the global transportation sector to provide more environmentally friendly and sustainable mobility options that can help in reducing air pollution, greenhouse gas emissions, and health risks.
Will the air quality improve overnight by buying an E-Scooter or replacing the existing ones with electric ones? No!
But will these battery-operated electric vehicles (EVs) eliminate exhaust (or tailpipe) emissions? Yes! Therefore, EV adoption will be critical in combating poor air quality. And here in this blog, we are trying to highlight the case of Electric Two-wheelers in the country.
Image Source: Alamy, 2021
The transition to electric vehicles from the conventional ones has already started. Now one important question here is to ask why.
Why do we need electric vehicles?
On a global scale with everything that is going around, from the world witnessing the negative impacts of climate change, the world didn’t even get the chance to recover from the coronavirus pandemic. The war between Russia and Ukraine is exacerbating the global energy supply and threatening global economic growth. Fuel prices are skyrocketing as the worldwide energy crisis worsens. In the fiscal year 2020–21, India imported about 84% of its petroleum products. These non-renewable energy sources are putting a burden on the financial resources of the country. Apart from this, vehicular emissions are deteriorating the air quality and adversely affecting the climate. In this context, the case for electric vehicles in India looks promising. In cities such as Delhi NCR, where pollution levels are way above the standard limits, EV integration is crucial to decarbonize the transportation sector which currently contributes 40% to the pollution of the city.
The Transportation sector in the country is transforming with the rise of electric vehicles. As per the data from the Federation of Automobile Associations, the sale of EVs in the Indian market has increased more than threefold as compared to the last year. This suggests that EVs have started making sense in the mind of our country’s population. As far as the Indian market is considered, the electric two-wheelers are leading the charge in the mobility sector. The widespread popularity, affordability, adaptability, and suitability for electrification make the two-wheelers most convenient for electrifying India’s transport sector. According to a study from the National Environment Engineering Research Institute (NEERI), 49% of the PM10 and 49.5% of PM2.5 emissions are from heavy-duty vehicles. So, whether the electrification of only 2-wheelers is going to help in the decarbonization of the transport sector needed more research. So we reached out to sectoral experts who helped us understand that though heavy-duty vehicles are the major contributors to air pollution, at the same time, it is difficult to introduce a heavy-duty electric vehicle as a market entry product. It would be much easier to start with two-wheelers which will lead to faster adoption in the market.
Good News for Potential EV Customers!
Image Source: The Times of India, 2020
Now if you are looking forward to buying an e-scooter or an e-bike there is some good news. The Central Government has also been offering various incentives under the national FAME-II scheme (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles — Phase II) to boost the growth of the EV sector. As per the FAME II scheme, 10 lakh registered electric two-wheelers would be getting an incentive of ₹ 20,000 each. The promotional policies for electric vehicles by state governments have also been very supportive in their bid to accelerate the adoption of less polluting vehicles in India. The FAME policies designed by the Government are quite supportive and are coming at the right time as the public is also looking for affordable substitutes.
Good Opportunity for EV Innovators too!
Image Source: Creatara Mobility (Via Facebook), 2022
The Indian 2-wheeler market is growing at a tremendous pace. Last year, It has reached a volume of 15.1 million units & is expected to reach 42.2 million units by 2027. The share of EVs in the 2-wheeler segment is growing every passing day & as per India Energy Storage Alliance (IESA), it is expected to expand with a CAGR of 36%. India being the hub for mobility start-ups has gained a lot of traction for investment in the sector. The electric 2-wheelers have penetrated the Indian market and their increasing adoption rate has also helped the start-ups in the EV segment to attract investors. For instance, Ola electric completed its $200 Mn round at a valuation of $5 Bn. Ather Energy, a Bengaluru-based electric two-wheeler has raised $128 million in its latest funding round, Gurugram-based Okinawa which was the second largest manufacturer in the EV segment last year, after Hero Electric and has a market share of more than 20%, is now planning to invest between ₹800 to ₹1000 crore to double its manufacturing capacity to 2 million units per annum. Even we at AIC-Sangam are getting many incubation requests from start-ups working particularly for the development of the EV Ecosystem and we fully support their dream and innovation!
But there are some challenges!
Image Source: Hindustan times, 2022
EV 2-wheeler segment has shown tremendous growth and the future of EV also looks promising but this has recently found certain roadblocks. In the last few quarters, the rising incidents of 2- wheelers bursting into flames is a matter of great concern. There have been instances of electric 2-wheelers from Ola, Okinawa, Pure EV, etc. catching fire. The experts & industry executives have suggested that these incidents will surely hamper the growth rate and supply of EVs.
Well, imagine, as a customer you are looking forward to buying yourself an e-scooter and the next thing you notice is reports of e-scooter catching fire everywhere! Well, YES, this may be scary and may raise certain doubts but this is a roadblock that we can overcome with proper regulations and innovative solutions!
The government has taken such instances quite seriously and ordered a probe by the Centre for Fire Explosive & Environment Safety (CFEES) to determine the circumstances leading to the incident and suggest remedial measures. The preliminary reports from the probe suggested that the faulty battery cells and modules can be the leading cause of electric scooters catching fire. The government will also be issuing quality-centric guidelines for electric vehicles to avoid any such accidents in the future. As most of the OEMs have decided to go for corrective measures, the growth can be slower in the first half but it is certain of the industry to hit one million units in FY23. Also, the Ministry of Heavy Industries recently signed a contract with three companies namely Ola Electric, Reliance New Energy & Rakesh Exports under the production-linked incentives scheme for indigenous cell manufacturing rather than importing it from other countries. These schemes will be favorable for the EV ecosystem & provide a big boost to battery manufacturing in the country. The Indian market needs encouragement for indigenous technologies that are suited for India from both a strategic and economic standpoint. So, if you have a solution, we can help to get you started with your EV innovation!
We have started this EV Blog series in the hopes of getting the word out to the masses! More blogs in this series are on the way. Till then stay connected and keep innovating!
You can contact us at info@aic-sangam.org and check our website https://www.aic-sangam.org/.
Blog Credits: Anish Tuteja, Shikhita Gupta
References:
Barman, S. R. (2019, December 23). To cut vehicular pollution by 2024, the Delhi govt shifts focus to e-vehicles. The Indian Express. https://indianexpress.com/article/cities/delhi/to-cut-vehicular-pollution-by-2024-govt-shifts-focus-to-e-vehicles-6181835/
Fame-India Scheme — Putting E-Mobility on Road. (2015). Auto Tech Review, 4(5), 22–27. https://doi.org/10.1365/s40112-015-0912-y
India Two-Wheeler Market: Size, Trend, Share, Report 2021. (2022, June 14). Market Research Reporting & Analysis Agency in India. https://univdatos.com/report/india-two-wheeler-market/
Kashyap, H. (2022, August 2). RIL, Ola Electric Sign EV Battery Making Pacts. Inc42 Media. https://inc42.com/buzz/ril-ola-electric-rajesh-exports-pli-scheme-pacts-ev-battery-manufacturing/
Nandi, J. (2020, October 22). India’s PM2.5 levels worst in the world in 2019. Hindustan Times. https://www.hindustantimes.com/india-news/india-s-pm2-5-levels-worst-in-world-in-19/story-jBvcqHfgftYQHiqbeEgUEI.html
Shyam, A. A. T. K. R. (2022, June 7). PEs to recharge two-wheeler EVs with $2 billion funding. The Economic Times. https://economictimes.indiatimes.com/industry/renewables/pes-to-recharge-two-wheeler-evs-with-2-billion-funding/articleshow/91997721.cms
Weinert, J., Ogden, J., Sperling, D., & Burke, A. (2008). The future of electric two-wheelers and electric vehicles in China. Energy Policy, 36(7), 2544–2555. https://doi.org/10.1016/j.enpol.2008.03.008