Moneycontrol Be a Pro
Get App
Last Updated : Oct 21, 2019 08:57 PM IST | Source: Moneycontrol.com

Plug and play | Automakers' EV dream passes through the 'hybrid' route

Any large electric vehicle investment in future is mainly linked to regulatory push or related infrastructure development

Representative image
Representative image

Aryaman Tandon

The stated target of the NITI Aayog to have 30 per cent electric vehicles in India by 2030 and all three-wheelers running on batteries has prompted the government to offer heavy incentives for companies to comply.

In light of this, both local and global automobile manufacturers are carving their way into this exciting opportunity towards a greener future for India.

Close

Automaker Honda’s prediction is electric vehicles (EVs) will account for 65 per cent of the company’s overall sales by 2030.

India is on a unique path for the next decade to create a greener and sustainable future. Therefore, a major boost for the EV segment is no surprise as a necessary step. The government is also focussed on creating necessary infrastructure. With manufacturers supporting the transition, the dream seems achievable.

The government plans to install one EV charging station every 4 kilometres in cities and 25 km on both sides of highways connecting these cities, according to the charging guidelines approved by the government on October 4.

After the announcement, automakers who focussed on taking the hybrid electric vehicle (HEV) route to benefit from their existing portfolios are making swift changes towards manufacturing a full battery electric vehicle (BEV) suited for Indian needs.

The alternatives

Mahindra & Mahindra recently announced that it would currently focus on developing an EV, partnering with Ford in India, and not go down the hybrid path.

On tracing the transformation of the global automobile market, a transition from conventional fuel to HEV and then to the full battery EV is not very hard to predict. For example, in the US, the share of hybrid EV has grown from nil in 2000 to 2.75 per cent of new car sales by 2018-end. And battery EVs, which were introduced in only 2010, reached 2.1 percent of new car sales last year itself.

Demand of hybrids

Hybrids are still a dominant format worldwide as both companies and countries are still grappling with issues of affordability and mileage, along with the still-developing or underdeveloped EV charging infrastructure.

India is also expected to follow a similar course like its global peers, dealing with infrastructure, mileage, and affordability issues before EVs become a mass-market alternative. Even the government’s plan of incentivising the hybrids through tax cuts is an indication or realisation that the route to the target of 100 per cent EV goes through hybrid models in future.

Work in progress

According to a report titled India's Electric Mobility Transformation: Progress to Date and Future Opportunities by the NITI Aayog and the Rocky Mountain Institute, the dispersion of EVs could come to 80 per cent in the case of two-wheelers and 30 per cent for private cars.

To push ahead on EVs, the Union government has publicised the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme. Under FAME II, it had proposed to invest Rs 10,000 crore for EV adoption in the coming three years.

Future of cars in India

Many global automobile manufacturers have an available hybrid solution on their portfolio, and they can bring the same to India like their conventional offerings. Nevertheless, companies are expected to wait until the technology for BEV catches up to suit the Indian market’s needs, besides the establishment of relevant charging infrastructure.

Some players are already trying to leverage their wagers based on the available competence in the EV technology and have kept their options open in terms of shifting to a hybrid platform in case the regulations move in the direction for a complete electric prototype.

As a result, it is understandable that major four-wheeler manufacturers are trying to tap the EV opportunity in India based on their current portfolio, which is chiefly hybrid. And any large investment in future would be based on the regulatory push or EV infrastructure development.

(Aryaman Tandon is Director, Praxis Global Alliance, and an automobile industry veteran. Views are personal.)

Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
First Published on Oct 21, 2019 02:52 pm
Loading...
Sections
Follow us on
Available On