Green Revolution: Is India ready for Electric Vehicles?

The global Auto industry is trying hard to make a U-turn as companies are trying hard to survive in the face of adversity. Today, the whole world is looking for greener options to mobility as car makers accelerate product development initiatives towards low-emission cars. A mix of options are sought, including clean diesels, smaller downsized engines and other alternate powered vehicles such as diesel or gasoline hybrids and full electric vehicles. Electric vehicles especially are dubbed as the next biggest trend in car making, after the internal combustion engine and mass manufacturing. And as we look at the Indian car market, where the current boom in the Auto market is turning heads of all manufacturers, the question is will these smart technology loaded green cars be sold anytime in our showrooms?

The problem facing India is the sheer volume of vehicles plying its narrow roads and the tail pipe emissions of some of the veteran models. India is relatively hedged against the problem of large SUVs that are the bane for US’s emission and the high performance vehicles that are desired by the European drivers. Automakers are making an effort to manufacture low emission cars, evident from some of the recent model launches by leading automakers. The Suzuki A-Star which was designed with the European export market in mind emits 109 g/km of CO2, well within limits of European standards for 2015. Tata’s Nano small car is expected to have less than 100 g/km of CO2 whereas the successful Hyundai i10 small car has an emission of around 119 g/km (although only Euro III compliant currently). In addition Indian manufacturers are bracing themselves to compliance of Bharat IV emission norms, which kicks in to action in 11 major cities from April 2010.

While various emission reduction measures are made on conventional vehicle types, cars that run on non-fossil fuels still seem farfetched. The only exception is cars that have a LPG kit, like the LPG Indica, which has a 10% lesser CO₂ emission as compared to petrol versions. However hybrid cars such as the Toyota Prius or the Honda Insight, which have been runaway hits in developed countries, are too expensive for an average Indian consumer today. More than 50% of cars on Indian roads are still small cars that cost less than 10lac Rupees, whereas a Toyota Prius cost roughly translates to 10-15 lakhs depending on the variant. This price will double if the company plans to import it as completely built units (CBUs) for the Indian market, since there might not be justifiable volumes for local manufacturing. Electric vehicles such as General Motors’ Volt plug-in range extension car or Mitsubishi’s much awaited IMEV (In-wheel motor electric vehicle) are still waiting to be launched in the developed markets, and the price tag of these cars is not expected to be light on the pockets. The closest any Indian OEM came towards hybrid vehicle development is Mahindra & Mahindra which displayed a hybrid Scorpio at the Auto Expo in New Delhi in 2006. But given the 3 to 4 year, product development time in the auto industry, we can rest assured of seeing nothing earlier that 2012 or beyond.

 Home-grown Electric vehicle manufacturing company, Reva has been a newsmaker and manufactures small but practical electric cars. The company sells a re-badged version of its vehicle called as the G-Wiz in the UK, and the company recently introduced an upgraded vehicle using technologically better Lithium-ion batteries, to propel its electric motor. These are the same type of batteries that power our mobile phones and laptops today, and is a well-established and reliable power source that the Auto industry wants to inherit into electric cars. Now, one might wonder why the company is pushing its vehicles in a foreign country when there is a huge customer base in motherland.

 A deeper look would show that the Indian car buyer and roads are not yet ready for the electric vehicle revolution that is about to sweep the western world by force. A typical electric cars designed today, is a bare-bones model, with 70-80% of the vehicle cost going toward the electric motor and the battery. These cars are expected to have longer driving ranges per charge, and be able to better larger electric motors for better performance.  This in turn makes it very difficult for OEMs to make cheap electric cars and it is expected to be a few years before they can be mass-produced and sold alongside conventional cars with the internal combustion engine. In a price-conscious market like India, electric vehicles are still not “A Value for Money” buy. In addition to the challenge of high prices, electric vehicles are more suited for city driving conditions only, which present a great opportunity in many European cities and US states such as California. There are other issues regarding the time required for charging the battery, which could be around 5 to 8 hours, and infrastructure for vehicle charging at parking lots, shopping complexes and work places. There is still a long way to go in establishing the reliability of Electric vehicle and battery technology for mass market manufacturing.

Emission compliance in India, atleast for the next 2 to 3 years will be achieved through lower displacement gasoline engines and clean diesels using low displacement and turbo-charging to achieve better performance without a compromise of emissions and fuel economy. However, automakers should show prudence and not discount the Indian car market’s potential. The story of mobile communication market undergo a major consumer revolution is still afresh in our memories. Who knows, the same could happen with our cars!

Source: Research Analyst, Automobile Industry, London