Why India need Electric vehicles? It’s not just Emissions!
H. Karan Kumar
Updated on Sept 19, 2023 | 6 min read
Although E-vehicles are marketed as the ultimate saviour of our environment, the concept of electrification in India goes beyond just addressing emissions. A primary agenda is to reduce reliance on fossil fuels, mitigate trade imbalances, and promote domestic manufacturing capabilities. This article will explore the multifaceted aspects of electrification in India and its challenges and objectives.
The Need for EV Revolution:
With a staggering $162 billion spent on oil imports in 2023, India heavily relies on imported oil. The majority of which was spent in the transport sector (diesel and petrol. This heavy reliance on fossil fuels strains the country’s economy and poses significant environmental and geopolitical risks.
Oil Import Dependency:
Approximately 70% of India’s oil imports are diesel, while 99.6% is petrol. This over-reliance on imported oils makes India vulnerable and geopolitically dependent on other oil-rich countries.
A solution to this is the transition to E-Vehicles, and with that, India aims to reduce its oil import bill and increase energy independence.
Environmental Impact:
The guzzling ICE engines hold a significant % of the air pollution and greenhouse gas emissions in India. The adoption of electric vehicles can significantly reduce emissions and improve air quality. EVs produce zero tailpipe emissions, which helps combat air pollution and minimize the carbon footprint.
Trade Imbalances
Electric vehicles have issues, too! The electronics and lithium-ion cells used in EVs come from China, which increases our dependence on countries like China, Taiwan, etc.
This trade imbalance compromises India’s strategic autonomy and raises concerns about supply chain disruptions. To address this issue, the Indian government has launched initiatives and schemes to promote domestic manufacturing and reduce dependence on imports.
Geo-Political Challenges of Electrification:
Electrification in India involves addressing a range of challenges and achieving various objectives. Let’s explore some of the key challenges and goals associated with electrification.
Electronics Imports:
Its heavy reliance on China has hindered India’s efforts to reduce electronics imports. China is a significant player in the global electronics market, controlling a substantial portion of the supply chain from raw material processing to cell manufacturing.
This dependence raises concerns about supply disruptions and price fluctuations. To promote indigenous manufacturing, the Indian government has introduced:
- Production Linked Incentive (PLI) scheme
- National Policy on Electronics (NPE).
Lithium-ion Cell Localization
Lithium-ion cells are a crucial component of electric vehicles, but India heavily depends on imports, primarily from China. India has initiated measures such as financial incentives, research and development collaborations, and strategic partnerships with domestic and international players to reduce this dependency and promote self-reliance. These efforts aim to establish a robust ecosystem for lithium-ion battery manufacturing within the country.
Sustainability and Circular Economy
The adoption of electric vehicles reduces emissions and paves the way for a more sustainable and circular economy. Lithium-ion cells are more recyclable than oil, offering resource recovery opportunities and minimizing waste. India can contribute to a more sustainable future by developing domestic capabilities in lithium-ion battery production.
How the Indian Govt. Promoting EVs
The Indian government has introduced several initiatives and policies to promote electrification and support the growth of the electric vehicle industry. Let’s explore some of the key government initiatives:
Production Linked Incentive (PLI) Scheme
The PLI scheme promotes domestic manufacturing in various sectors, including electronics and electric vehicles. Under this scheme, eligible companies receive financial incentives based on incremental sales over a specified period. The PLI scheme encourages investment, job creation, and technology transfer in the electric vehicle industry.
National Policy on Electronics (NPE)
The NPE focuses on creating an enabling environment for electronics manufacturing in India. It aims to attract investments, promote innovation, and foster a conducive ecosystem for electronics production. The policy emphasises localising electronics manufacturing, including components such as lithium-ion cells.
FAME India Scheme
The Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) scheme provides financial incentives to promote the adoption of electric vehicles in the country. The scheme offers subsidies for electric vehicles, charging infrastructure, and research and development activities. FAME India aims to accelerate the growth of the electric vehicle market and reduce dependence on fossil fuels.
Future Prospects
The future of electrification in India looks promising, with significant potential for growth and innovation. The electric vehicle industry is expected to flourish as the government continues to focus on reducing emissions, promoting domestic manufacturing, and enhancing infrastructure. Key areas of focus for the future include:
Infrastructure Development
The availability of charging infrastructure plays a crucial role in adopting electric vehicles. The government is investing in developing charging stations nationwide, including fast-charging networks on significant highways. This infrastructure expansion will help alleviate range anxiety and encourage more people to switch to electric vehicles.
Research and Development
Investments in research and development are vital for technological advancements and the localization of critical components. Collaborations between academia, research institutions, and industry players can drive innovation in battery technology, charging systems, and vehicle design. These advancements will contribute to the growth and competitiveness of the Indian electric vehicle industry.
Policy Support and Incentives
Continued policy support and incentives are crucial to sustain the growth of the electric vehicle industry. The government can further incentivize the adoption of electric vehicles through tax benefits, subsidies, and favorable regulations. Such measures will make electric vehicles more affordable and accessible to a broader population.
Conclusion
Electrification in India is not just about reducing emissions; it is a comprehensive strategy to address challenges related to oil import dependency, trade imbalances, and sustainability. By promoting domestic manufacturing, reducing reliance on imports, and investing in infrastructure and research, India can pave the way for a more sustainable and self-reliant future. The shift towards electric vehicles presents immense opportunities for economic growth, job creation, and environmental conservation. As India continues its journey towards electrification, it is poised to become a global leader in the electric vehicle industry.
