INDIAN AUTO SECTOR – AT THE CUSP OF A MAJOR SHIFT

about 2 years ago
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By Ruma Dubey

“We should move towards alternative fuel... And I am not going to ask you; I will bulldoze them (vehicles running on conventional fuel). For pollution and imports, my thoughts are crystal clear.”  This is what Union Road Transport and Highway Minister Nitin Gadkari said.  This sounds so right but somehow, based on our past records, one cannot help but wonder if this is too ambitious a thought. While the automobile market worldwide is witnessing a shift towards greener vehicles, like Hybrid and electric cars, India is yet to move into the green lane.

Electric vehicles are where the entire world is moving to and all eyes are on Tesla CEO, Elon Musk who is working on an affordable, $35,000 starting price for this path breaking Model 3.  In India, electric cars are yet to take off - Mahindra & Mahindra is the only who mass makes and sells electric cars in India; this was after it took over the only electric car maker, Reva.

Other car makers like Tata Motors, Maruti, Toyota, Audi and Hyundai have started making investments into developing electric vehicles or have started work on plans to build EVs for the future. In fact Tata Motors and Hyundai plan to launch their version of electric vehicles by 2019.

An electric car uses electric energy stored in its batteries.  Obviously, the cumbersome task of finding plug-in points to recharge the batteries has deterred many people from switching to the electric option. The fact that you need an electric car recharge system at home or in the neighborhood, makes it next to impossible for you to switch to the ‘greener’ option.

Just to give a perspective of how Govt’s are encouraging usage of EVs - the French government pays around 8000 Euros i.e. AED 36000 when a person wants to buy an electric car. There are also free parking spaces given to the drivers of electric cars. People need such incentives to purchase electric cars.

In India too, fortunately, the Govt seems to know the shortcomings and surely has ambitious plans ahead. It has said it loud and clear that all vehicles sold in India will be fully electric by 2032 for which several plans have also been put into motion. These include outright purchase of electric vehicles (EV) by government offices and departments for official use and also by state transport undertakings for public transport.

The Govt is not ignorant about the affordability angle.  It has stated that by 2025, the price of EVs will be on par with an internal combustion car (petrol or diesel). India has set itself the ambition of the Indian car market to achieve zero tail pipe emission by 2040.

The biggest drawback is the charging station. Even for Tesla, even in a developed country like USA, half the people refrain from buying the EV is because of lack of charging stations. For India, while we announce such ambitious plans for making the entire transport system electric, ample investment has to come into charging stations too. Currently, India has only 206 community charging stations across the country. 

Maybe we are all at the cusp of a major shift in the Indian car industry. Change in the auto sector cannot happen overnight and what we are seeing today are the steps which would be taken over the next few years to go electric. Is this how the shift would have happened from bullock carts to cars?  

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