Higher usage of electric vehicles could be the panacea to India’s rapid urbanisation, rising emission levels and fuel usage

The year 2013 started on a green note with Prime Minister Manmohan Singh launching the National Electric Mobility Mission Plan 2020 (NEMMP), under which the government plans to spend at least Rs. 13,000 crore to Rs. 14,000 crore in the next eight years to promote electric and hybrid vehicle on Indian roads.

The NEMMP document claims that the subsidies would reduce carbon dioxide emission up to 1.5 per cent, eliminate the need for up to 2.5 million tons of fuel, and add six to seven million electric vehicles to the roads by 2020.

Again, auto-major Mahindra announced the launch of its new model electric vehicle e20. That was a good enough beginning for India’s nascent electric vehicle (EV) market.

Frost & Sullivan forecasts the market for electric passenger vehicles in India to reach 20,400 units by 2014-15 from 810 units a year in 2009-10. Similarly, the two-wheeler EV market will grow from 0.14 million units in 2009-10 to 0.45 million units in 2015-16.

In India, the major players in the electric bike segment include Hero Electric, Yo bikes, Lohia Auto Industries and TI Cycles' BSA Motors. Mahindra Reva is the only domestic electric car brand currently.

However, almost all the companies are finding it difficult to sell EVs to the Indian consumers who show reluctance to pay a premium to go electric.

A recent TERI report says that the growth in EV market needs to be fuelled with organic consumer demand rather than being incentivised by the government to buy electric vehicle, which is currently the case.

“The Indian consumer is price, fuel economy and style conscious and will therefore appreciate the long term savings of EV versus Internal Combustion Engine (ICE). In which case, growth of the EV value chain must be fuelled by organic consumer demand, and not pushed by unsustainable government subsidies for consumers, to drive purchases,” says the report.

The running cost of an electric two-wheeler is one-tenth of a conventional petrol-driven scooter at Re. 1 per 100 km, which is just the cost of charging the battery. An electric vehicle needs eight hours to fully recharge. Nevertheless, it always carries the fear of battery running out. 

The TERI report points to the need to invest in public charging point for the electric vehicle that would besides providing much relief against low battery life of these vehicles, will also give visibility to electric vehicles and comfort potential buyers.

Rising price of crude in the international market, rapid urbanisation, impending public transport infrastructure breakdown and rising number of vehicles on road — all point to the need for green mobility options and EVs can fill that vacuum.