Indian Oil Issues Empanelment Tender for Solar Power Projects

Southern Railway Seeks Bids for 1.2 MW Rooftop Solar Projects in Chennai

Husk Secures $4 Million from Electrifi to Scale up Mini Grids in Rural India

Doubling Transmission Capacity of Existing Grid Through Reconductoring: Report

Daily News Wrap-Up: BJP, Congress Bet Big on Renewables in Election Manifestos

As ISTS Waiver Nears End, Developers Need Extension Amid Lack of Substations

Mahindra Susten to Develop 150 MW Open Access Renewable Power Project

BJP, Congress Bet Big on Renewables in 2024 Election Manifestos

Daily News Wrap-Up: REIL Invites Bids for 200,000 Mono PERC Solar Cells

Solar, Storage, Wind Drive 95% of US Interconnection Queues as Backlog Rises

<p>The electric vehicle (EV) market in India is slowly beginning to gain momentum after three years of relative inaction. However, India still lags far behind other nations when it comes to EVs.</p>
<p>“After a few years of growth, the solar and wind sectors are going through some challenges and everyone wants to know where the next big opportunity is in India’s clean energy market.  The obvious answer is battery storage, but EVs have the potential to be massive,” said Raj Prabhu, chief executive officer and co-founder of Mercom Capital Group.</p>
<p>The National Electric Mobility Mission Plan (NEMMP) was launched in 2013 with an estimated investment of approximately ~$3 billion (~₹192.8 billion) to promote hybrid and EVs in India. But, due to a lack of action, not a lot has been achieved. In India, the EV category includes e-cars, e-buses, e‑scooters, e-rickshaws, and other two-wheelers that can run on electricity.</p>
<p>&#8220;The government will be ready with its electric vehicle policy by December of this year,&#8221; Road Transport, Highways and Shipping Minister Nitin Gadkari said in May of this year.</p>
<blockquote><p>“The National Solar Mission provides a good roadmap of what to do and what not to when formulating policies. The government needs to commit to investing in R&amp;D, facilitating the setup of the supply chain, and creating initial demand with buy in from states. More importantly, the government needs to set yearly vehicle sales goals for 5-10 years and meet those goals &#8211; no matter what &#8211; every year. Without long-term market visibility, investments will not come,” added Prabhu.</p></blockquote>
<p>To start with, the government can create a market by procuring EVs to replace its entire fleet of conventional vehicles. The total number of vehicles used by the government and its agencies is estimated at 500,000, which represents a significant market.</p>
<p>The Government of India is currently <a href="https://mercomindia.com/india-plans-deploy-seven-million-electric-vehicles-2020/" target="_blank" rel="noopener">targeting</a> sales of 6-7 million new hybrid and electric vehicles by 2020 under the NEMMP. But for this to become a reality, various state governments and the Ministry of New and Renewable Energy (MNRE) need to provide necessary incentives for the EV segment.</p>
<p>The MNRE provided demand incentives totaling ₹950 million (~$14.64 million) to EVs between 2010 and 2012. The subsidy provided benefited up to 20 percent of the ex-factory price, with a maximum benefit of ₹100,000 (~$1,540.71) on electric cars, ₹4,000 (~$61.63) on two-wheelers, ₹5,000 (~$77.04) on high-speed two-wheelers, ₹400,000 (~$6162.86) for electric mini-buses, and ₹60,000 (~$924.43) for three-wheelers.</p>
<p>Around 42,000 electric vehicles were sold in 2012-13 and nearly 20,000 hybrid and electric vehicles were sold in 2013-14. At that time, the Delhi government provided a subsidy on the base price of EVs as well as an exemption from VAT.</p>
<p>Despite those incentives, there was a lack of continuity in incentivization which led to a slowdown in the sector. Now, the launch of the Faster Adoption and Manufacturing of (Hybrid &amp;) Electric Vehicles (FAME) program with an initial outlay of ₹750 million (~$11.56 million) is providing a major push for early adoption and creation of a market for both hybrid and electric vehicles in the country.</p>
<p><strong>FAME Program</strong></p>
<p>Under the FAME program, 163,286 EVs have been sold to date and the government has provided a cumulative subsidy of ₹1.98 billion (~$30.54 million).  Since its inception, the FAME program has helped to expand the acceptability and usage of EVs in India.</p>
<p>FAME covers all vehicles, two-wheelers, three-wheelers, four wheelers and buses; the incentives are applied depending on type and make of the vehicle. For two wheelers, the incentive can vary from ₹7,500 (~$116)/unit to ₹22,000 (~$339)/unit, for three wheelers it is ₹25,000 (~$385)/unit. For four wheelers, it ranges between ₹13,000 (~$200)/unit to ₹6.1 million (~$93,984)/unit. For buses, the incentives can vary between 60 percent of purchase cost or ₹8.5 million (~$130,960.69)/unit and 60 percent of the purchase cost or ₹10 million (~$154,071)/unit.</p>
<p>Businesses are now waking up to the possibilities of the EV sector in India and there has been a flurry activity recently. In August 2017, India’s first-ever EV tender was launched by Energy Efficiency Services Limited (<a href="https://mercomindia.com/eesl-issues-indias-first-ever-tender-procure-10000-electric-vehicles/" target="_blank" rel="noopener">EESL</a>). EESL announced a procurement tender for 10,000 EVs to be used by government departments and agencies.</p>
<p><em>In June of this year, the Indian government announced a goal of selling only electric cars by 2030 and ending the sale of all diesel and petrol fueled cars.</em></p>
<p><strong>Who is Playing in India</strong><strong>’s EV Sector</strong></p>
<p>The National Thermal Power Corporation (NTPC) has emerged as a player in the sector with the construction of two EV charging stations at its offices in Noida and Delhi. The company plans to develop <a href="https://mercomindia.com/ntpc-develop-20-electric-vehicle-charging-stations/" target="_blank" rel="noopener">20</a> more EV charging stations in the national capital region, and that’s just the beginning.</p>
<p><a href="https://www.acme.in" target="_blank" rel="noopener">ACME Group</a> launched India’s first Battery Swapping &amp; Charging Station for Electric Vehicles in Nagpur.</p>
<p><a href="https://mercomindia.com/tata-power-installs-first-ev-charging-station-mumbai/" target="_blank" rel="noopener">Tata Power</a> announced its presence in the sector by installing its first-ever EV charging station at the Tata Power receiving station in Vikhroli, Mumbai. Tata Power’s sister company, Tata Motors, is a big player in the global automobile industry.</p>
<p><a href="http://www.boschindia.com/en/in/sustainability_innovation_5/electromobility_3/electromobility.html" target="_blank" rel="noopener">Bosch</a>, a German firm, has also announced plans to start a manufacturing unit that would manufacture components and parts for EV vehicles in India by 2018.</p>
<p>All of these announcements point toward a rush of new activity in the sector and a huge potential for new investments. According to Mercom India Research, Tata is planning to modify two of its most popular cars – the Indica and the Nano – into EVs, and states like Kerala and Karnataka are planning to draft policies for EV charging infrastructure.</p>
<p>The development of smart cities across India is also poised to offer another avenue for EVs as cities plan the use of e-buses for mass transit.</p>
<p>Power conglomerate, <a href="http://new.abb.com/indian-subcontinent" target="_blank" rel="noopener">ABB India</a>, recently submitted a bid to provide 4,500 charging stations in response to a government tender.</p>
<p><a href="http://www.herofutureenergies.com" target="_blank" rel="noopener">Hero Future Energies</a> is preparing to make an entry into the battery storage business and set up charging stations to take advantage of the growing electric vehicle (EV) market in India.</p>
<p>Apart from these, the country is also planning last mile connectivity through e‑rickshaws.</p>
<p>“The large-scale introduction of electric vehicles necessitates building an EV ecosystem encompassing the demand, supply, and infrastructure aspects. The battery costs constitute a substantial 40-50 percent of the cost of an electric vehicle. The ambitious plans for road transport electrification in India are expected to translate into a much higher demand for batteries. The battery demand in India in 2030 would be five times the global battery demand today,” said Dr. Arunabha Ghosh, chief executive officer of the Council on Energy, Environment, and Water (CEEW).</p>
<p>“Advances in technology and economies of scale will certainly bring down battery costs but not enough to make EVs cost competitive with conventional internal combustion engine (ICE)-based vehicles. To reduce manufacturing costs further, the auto industry (original equipment manufacturers (OEMs), component suppliers etc.) needs to make massive investments in production platforms for critical components in the EV value chain,” added Dr. Ghosh.</p>
<p>“India is completely dependent on imports for nearly all of the critical minerals that go into manufacturing batteries. Thus, strategic sourcing of critical minerals holds the key for enabling manufacturing competitiveness in EVs,” further commented Dr. Ghosh.</p>
<p>Recently, in the first-ever government <a href="https://mercomindia.com/eesl-issues-indias-first-ever-tender-procure-10000-electric-vehicles/" target="_blank" rel="noopener">EV tender</a>, Tata Motors <a href="https://mercomindia.com/tata-motors-bid-electric-vehicles-eesl/" target="_blank" rel="noopener">won a bid</a> to supply 10,000 EVs to Energy Efficiency Services Limited (EESL).</p>
<p>Government subsidies on the consumer side are needed to boost the market and attract mass acceptance of EVs in a price sensitive market. This is currently happening in the form of incentives provided under the FAME program, but there is a need for more, as even with the current incentives these EVs are not close to being on par with petrol and diesel cars.</p>
<p>“As we have seen in rooftop solar, subsidies look good on paper, but if the government doesn’t pay them on time or doesn’t pay them all, it will completely kill the industry’s momentum,” said Raj Prabhu. “Government programs are good at setting big goals and laying out policy outlines but the challenge is setting aside a budget and having the will to match those ambitious goals with investment. Two years of subsidies is not enough for the sector to take off on its own – there has to be a longer-term commitment until critical mass is reached, and the private sector can take it from there.”</p>
<p>Image credit: NTPC</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/saumy/" class="vcard author" rel="author"><span class="fn">Saumy Prateek</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/saumy-edited-1.png" width="50" /></p>
<p><strong style="text-decoration: underline">Saumy Prateek</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/saumy/" target="_blank" rel="noopener">More articles from Saumy Prateek</a></p>
</div>
<div class="authorboxn"><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/saumy-edited-1.png" width="79" height="102" /><a href="https://mercomindia.com/author/saumy/" rel="noopener"><strong>Saumy Prateek, </strong> </a>is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism &amp; Mass Communication from the Manipal Institute of Communication at Manipal University.<a href="https://mercomindia.com/author/saumy/">More articles from Saumy Prateek.</a></div>
</div></div><div class="clearfix"></div></div></div>

Electric Vehicles – The Next Big Cleantech Opportunity in India

hybrid-vehicle

Get the most relevant India solar and clean energy news.

RECENT POSTS