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EV Next’s Strategy Recommendation for India’s EV Growth – Summary & Analysis


by Narasimhan Santhanam



This posevnext-logo-v-smallt is a part of EV Next’s EV Perspectives.

EV Nexta division of EAI, is a leading market intelligence & strategic consulting firm for the Indian e-mobility sector.


This post is part of a series titled “EVolution or rEVolution? Strategizing for EV Growth in India” from EV Next Perspectives. See all posts for this series from here. See the previous post Strategizing for India’s EV Growth

Strategy Recommendation for Accelerating EV Adoption in India – EV Next

 

Summary & Analysis

This post reviews the key dimensions of e-mobility and provides recommendations on strategies to be adopted on each dimension to fast forward electric vehicle growth and adoption in India.

Summary

Strategy Dimension Recommended Strategy Highlights
Product
  • Scooters
  • 3 Wheelers (including small commercial trucks)
  • Local buses – public and corporate fleet
Geography
  • Focus on increasing EV sales and support in top 10 cities
Technology
  • Focus on developing indigenous base for making charging infra, EV motors and BMS
  • Adopt a Wait-and-watch approach for core battery technology investments
Infrastructure
  • Focus on charging infrastructure for the top 10 cities
  • Focus on a combination of charging stations and battery swapping stations for these cities

How effective will the above strategy be to overcome the key challenges?

Challenge Effectiveness
Cost Challenge By focusing on the products with the least “delta” (cost difference between electric and conventional), the cost challenge is brought down considerably. Using tools such as subsidies for these segments could further mitigate this challenge.
Range Challenge By focusing on urban geographies in the first phase, we will be able to mitigate the Range Challenge with a reasonably concentrated electric vehicle charging infrastructure.
Charging Time Challenge By focusing on vehicles that could be charged at night at home or at organized places such as bus stations, and by also focusing on putting together an effective battery swapping network in the top 10 cities, we will be able to significantly overcome the charging time challenge for the target groups focused on in the first phase.

How can the above strategy leverage the current and emerging trends in the transport and energy ecosystem?

We had provided a brief overview of trends in two related ecosystems for EVs – the Transport and Energy Ecosystems. 

Growth of EVs should not be seen in isolation. The recommended growth strategy will be even more effective if it is able to build upon these trends. Let’s review how the strategy we have suggested can do that.

Transport Ecosystem Component How can the Recommended EV Strategy build on this?
MRTS Explore avenues to increase the use of EVs (especially two wheelers) for last mile connectivity with MRTS. In this context, it is encouraging to see proposals by some Indian cities (Chennai, Bengaluru) to set up charging stations near metro stations
Public buses As mentioned earlier, intra-city public buses (and also corporate bus fleets) present a strong business case for electrification; thus, a significant portion of the new buses bought by this segment could be electric buses!
BS VI BS VI compliance will be easier for cars if they are hybrid. At current prices, the international hybrid electric cars in the market today will only attract the super-premium car buyers. It might be useful for the Indian car companies to explore production of hybrid electric cars for the mid-range market – they are thus able to satisfy the aspirations of the end users without compromising performance, and they are able to also meet the BS VI norms! However, given in the investments required and the uncertainties, the Indian car makers are recommended to do a detailed cost-benefit study for hybrid cars in India before making an investment decision.
Use of natural gas Interestingly, in India, natural gas is already used significantly in two of the three focus segments recommended by our strategy – in buses in some cities and in three wheelers in many cities. In this phase, we see increased adoption of both natural gas and electric vehicles for the 3 wheeler and bus segments One way these two can complement each other for a low carbon transportation is where smaller towns and cities adopt natural gas 3-wheelers on a larger scale during this phase while the 3-wheelers in large cities go electric.
Use of biofuels The use of biofuels in themselves is impacting only a small percentage of overall transportation (only about 2% total oil used as of 2018). EVs might not be able to leverage this trend in any specific way.

Suggestions on how the recommended strategy can build on the other transport and energy ecosystem trends

  • Tie-ups with E-commerce Firms – Tie-ups with e-commerce firms having their own hyperlocal logistics network (eg: Swiggy) can be attempted, as most of such logistics is carried out using two wheelers. This being an organized sector, suitable private charging stations could also be constructed to build a complete ecosystem.
  • Tie-ups with Cab Hailing Services – Tie-ups can be attempted to have electric vehicles in their fleet. While there’s potential in this model, the challenges with using electric cars in India during this phase apply to this segment as well – in fact, this was attempted by Mahindra Electric with Ola Cabs recently, but did not do well. However, during this phase, rather than trying to go “All Electric”, Ola or Uber could offer a premium “green cabs” service as part of their solution, which caters to a small niche in their user-base. While this is likely to remain a small niche over the next few years, this could be a good start.
  • Rooftop Solar + EV Charging Stations – From among the Energy Ecosystem trends, leveraging distributed solar power is perhaps the most effective model that can be tried in the short term. While rooftop spaces at city-based charging stations might not be enough to provide all the energy required, these will be a good start during this phase. The learning from these can be utilized while trying to integrate larger rooftop/on-premises solar power plants with charging stations outside city limits in the next phase.

How effective will the recommended strategy for achieving the sustainable transportation goals?

 How well does the recommended EV growth strategy contribute towards these goals during the 2018-2025 phase?

Goal Contribution to goal during 2018-2025 Notes
CO2 mitigation Low-Moderate For electrification to effect large scale reduction of CO2 emissions, cars and larger road vehicles need to be electrified, which is unlikely during the first phase.
Air pollution control Moderate A significant focus of the strategy is on vehicle electrification for the top 10 Indian cities, which are the worst affected by transport pollution
Lesser dependence on oil imports Moderate Electrification of 2 and 3 wheelers, and select buses will have reasonable impact on lowering oil demand.
More efficient urban transport Low A more efficient transport for India requires fewer cars on roads, higher use of public transport, and intelligent traffic management. The EV growth in India during 2018-2025 will affect none of these directly.

 

The recommended strategy, it can be seen, makes only a limited contribution to achieving the overall goals in sustainable transportation during the 2018-2025 phase. At the same time, a good start would have been made, and this can be used as a springboard for much higher contribution from EVs towards sustainable transportation post 2025.

This post is part of a series titled “EVolution or rEVolution? Strategizing for EV Growth in Indiafrom EV Next Perspectives. See all posts for this series from here. See next post India’s EV Growth – EVolution or rEVolution? – the conclusion

The complete list of bogs in the series-

  1. Highlights of the Indian EV Industry, an EAI Perspective
  2. Understanding The PUSH & PULL for the Indian EV Industry
  3. The Needs & Drivers of the Indian EV Market
  4. Constraints, Challenges and Avenues for EV Adoption in India
  5. Strategizing for India’s EV Growth
  6. EV Next’s Strategy Recommendation for India’s EV Growth – Summary & Analysis
  7. India’s EV Growth – EVolution or rEVolution? – the conclusion

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Know more on how EV Next can assist your business in your strategy for the e-mobility and electric vehicles sectors, Here

Wish to know everything about India’s EV market from one place? Check out the India EV Expert Guide, an 800-page comprehensive guide to the Indian EV marketHere



Categories: Electric Vehicles

Author - Narasimhan Santhanam


Thank you for reading this post – hope it was helpful. You can connect with me at narsi@eai.in. My detailed profile here and my LinkedIn profile here

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