Business vehicles: The new updates

By Nitya Pandit

Energy Efficiency Services Ltd (EESL), a joint venture company, has invited global bids for 10,000 electric vehicles (EV), that can run up to 150km on a single charge, for use by government departments. This situation will provide support to the government’s target of having only electric vehicles on the roads by 2030, be it for commercial or personal purposes. There has been an increase in the global electric vehicle’s market due to the tightening environmental measures, improvements in technology and reduced costs related to energy storage.

The current situation

EESL plans to purchase the cars in two phases, starting with 1,000 vehicles that will be used by the government in Delhi and the National Capital Region. Since the charging infrastructure is extremely essential, 400 chargers will be provided in the first phase. EESL floated tenders for 3,000 alternating current and 1,000 direct current charging points. For the past 20 years, electric vehicles like Mahindra & Mahindra’s Reva have been on sale. However, it hasn’t captured a large section of the audience yet. This is primarily because of the restricted number of such vehicles available in the market at the same price point, the lack of enough charging points and time spent charging. EESL’s vehicles will be in the same price range as Mahindra’s Verito which is priced at Rs 12-13 lakh.

The worth of investment in research and development

Since India does not have lithium deposits like other countries, this might be an obstacle while setting up a manufacturing plant for the EV’s battery. Hence, an option is to invest in R&D labs where research on battery and self-driving technology, and materials used to make cars can be done. Hence, India can position itself among the new breed of automobiles. Once electricity is used in the engines, India’s high costs of importing petroleum fuel will be reduced. Even though electricity will be generated by coal, the country will still save foreign exchange as well as use less energy. Furthermore, the government has already decided to provide for 60% of the R&D cost that will be used for developing a low-cost electric technology.

Impact of EESL’s move

According to NITI Aayog’s recent report, with successful adoption of e-vehicles, India will not only save $60 billion in diesel and petrol but will also cut down 1 gigatonne of carbon emissions by 2030. Electricity-run vehicles, causing a shift towards renewable energy, produce 37% lower emissions and help improve health nationwide. Further, more than half of India’s installed power generation capacity will be used, given the increase in demand for electricity. While this move sounds great on paper, it will experience challenges in reality. Since there are only 206 community charging stations in the country currently, there is a high risk of an EV owner being stranded, given the lack of stations. This increases uncertainty and limits EV owners to travelling within cities only.

Automobile manufacturers have begun lobbying with the government as they speculate the impact of e-vehicles on their business—the companies want the government to adopt green vehicles instead of e-vehicles. This transition in the Indian automobile industry would result in societal and business dislocation and a complete modification of the industry. India does have a larger domestic market and the passenger car ownership is speculated to repeatedly grow over 15 years. But the country doesn’t yet have the fiscal ability of China or the superior technical skills of Japan. Thus, to seize this opportunity, India needs to make the right efforts in achieving its ambition.

Featured Image Source: Flickr