India’s Electric Vehicle Strategy

What is India’s strategy?

What are its plans for a future that’s driven by electric vehicles and fueled by lithium?

The global electric vehicle market is dominated by major players such as Tesla (US), BYD (China), BMW and Volkswagen (Germany), and Nissan (Japan).

India wants to make that transition too, one because that is the future and two because we need cleaner air. In India government is Incentivizing EV purchase with subsidies, tax break and various other monetary incentives., it has created policies regarding Co2 emission limits and encouraging car manufacturers to produce more fuel-efficient vehicles. But there’s also a problem, there’s no lithium in India.

The 19th century cars used an “Internal Combustion Engine” or ICT that required petrol or diesel. But there was an alternate technology which used “electricity” powered by a battery. EV car’s trend came into limelight when Tesla introduced its car “Roadster” in 2008. Since then, everyone is in a race to capture the Electric vehicle market to rule the 21st century automobile industry.

The element is not usually found in this part of the world so while India manufactures most of the components of an EV car at home, it relies on others countries like China, Taiwan and Japan for lithium-ion batteries and this import adds to the cost of an EV .

India’s goal is to become a global hub for making EVs ,currently China holds that spot , but countries are now distancing themselves from China .For India it’s an opportunity both to expand its manufacturing sector and become self-reliant. Upcoming challenges for India in this sector would be, First of all to access lithium outside China. Second, to process lithium make lithium-ion batteries at home. Third, to find alternatives to this technology because lithium reserves are limited and fourth to become the world’s top manufacturer of EVs.

Major Challenges and Key Initiatives:

• High prices: At the end of the day, cost would be a key parameter for EV adoption in India. In order to address this challenge, the central government’s (Faster Adoption and Manufacturing of Hybrid and EV) FAME policy is offering monetary incentives to customers which would reduce the purchase price of EVs and bridge the price differential between EVs and ICE vehicles Apart from this, there are various other incentives like road tax and registration fee exemption.
• Underdeveloped ecosystem of battery production and charging station: For a large scale EV adoption, it is very critical to build an ecosystem of battery industries and charging infrastructure. Currently, lithium ion battery cell production hubs are primarily located in China, US (North America), Europe (Western), Japan and South Korea. Indian government wants to promote manufacturing of EVs in India, with plans to build Tesla-style giga factories and develop a homegrown battery manufacturing ecosystem as well as a network of charging stations. The Indian Space Research Organization (ISRO) has transferred its in-house lithium ion technology at a nominal fee of INR1 Cr to 10 Indian industries for commercial production. This move is expected to lead to the establishment of lithium-ion cell production facilities for indigenous EVs. The first lithium refinery of India will soon be set up in Gujarat to boost the nation’s efforts towards electrification of transport. The refinery will process Lithium ore to produce battery-grade material. The lithium ore will be imported from Australia and processed in the refinery. Manikaran Power Limited, which is one of the largest power trading and renewable energy companies in India will be investing heavily in the refinery. Also traditional battery maker Amara Raja is looking to build a lithium-ion assembly plant.

India is plugging into the future with a strategy to become the world’s top EV manufacturer.

Future Growth Prospects:

Policymakers in India have been actively pushing EV adoption. Government has specified that Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAMEII) and other policies supporting electric mobility are expected to push EV sales.