Things are getting exciting if you’re a part of the auto industry. There is a massive revolution that’s taking place and with the way the gears are shifting, it will never be the same again. The biggest disruptive change is the phasing out of the internal combustion engine vehicles, to be replaced with the more environmentally-friendly electric vehicles. Of course, the change won’t be sudden. However, it’s interesting to note that India aims to be one of the biggest global hubs for EVs in the next decade, if not earlier. And with several major electric vehicle companies in India focussing extensively on this segment, this goal is within grasp.
Where does India stand today? As the fifth-largest automobile manufacturer, if it continues at the same pace of growth, it has the potential to become the third-largest by 2030. However, there are still numerous challenges to overcome before India can become a serious global player. But before that, let’s look at the EV industry in India.
Understanding the EV industry in India
Why is there a sudden interest in EVs in India? One of the primary reasons for the growth of EVs in India and the corresponding increase in demand is the continually rising price of fuel. Consumers want products that will not break their bank accounts. Of course, sustainability is also a buzzword and another factor to keep in mind. Did you know that India imports close to 80% of its crude oil requirements? Many consumers are realising that they cannot depend on or continue to consume conventional energy sources at the same rate.
Auto leaders in the market say that the Indian electric vehicle market is still at its nascent stage and predict it to grow by 47.09% in the next five years. These numbers rely on the increasing demand for electric vehicles in the country. If you add to that government initiatives, such as the National Electric Mobility Policy 2025, and you see that everyone has a fair share of interest in giving a considerable boost to the industry.
Additionally, there’s an increased push to set up new manufacturing hubs and one can see newer players also entering the market, offering a healthy competition to existing auto players who are diversifying into EV. The government has also taken it upon itself to promote and support this industry. By offering subsidies and policies that favour Indian-made electric two-wheelers and boost localised ACC battery storage production it is providing significant growth drivers for the Indian EV industry.
Among other stakeholders are e-commerce companies, indigenous Indian carmakers, such as Rewa Electric Car Company (RECC), and app-based transport companies, such as Ola, that are also spearheading the adoption of electric cars in India.
Yes, the target India has set for itself is an ambitious and challenging one. Where it scores an advantage is its relative abundance of renewable energy resources and greater availability of skilled manpower, both in the technology and manufacturing sectors. And let’s not forget the untapped potential of the world’s largest two-wheeler segment market.
Challenges for EV in India
However, it’s not hunky-dory for the Indian EV industry. One of the biggest challenges the Indian electric vehicle market has to overcome is the lack of adequate infrastructure. Besides that, the high cost of the vehicle, the lack of electricity generated from renewable energy and the absence of a robust nation-wide charging infrastructure are some other challenges that the industry faces.
Currently, only a few major cities and towns have charging stations. As the demand for EV in India increases, this will need to change. Once other companies see the business opportunity in this sector, we are bound to see an increase in the number of charging stations. While China had more than two lakh charging points by the end of 2016, India has a long way to go still to reach comparative numbers.
Secondly, a valid concern many customers have is whether their vehicle has the capability to reach their destination before running out of charge. This, coupled with the weak charging infrastructure in rural or sparsely populated areas, puts quite a roadblock in their decision to migrate to an EV.
Let’s not rule out the price factor. A major deterrent for consumers is the price of an EV in India. EVs are heavier on the wallet as compared to traditional gasoline-powered vehicles. This will take some time to change, and as technology improves and more companies enter this market, we are likely to see a drop in prices.
Another concern is that of EV maintenance. Since this is a relatively new technology, the repair and maintenance network is much smaller as compared to that of ICE vehicles, and the lack of skilled people is a challenge.
On the manufacturing side, electric vehicle companies in India still rely heavily upon Chinese and Korean manufacturers for battery technology since the country lacks the minerals cobalt and lithium. We must wait and watch for local battery manufacturers to find an answer for that.
Despite these challenges, however, the future of EVs in India is optimistic.
The future of EV in India
The EV industry in India is on an upswing, with a large number of start-ups emerging to manufacture two-wheelers to four-wheelers, hybrids and electric vehicles, along with supplying parts. Also, India’s lucrative market and discerning customer has attracted large global players, including Tesla, Nissan, Renault-Nissan Alliance and Daimler AG to explore and set up base here.
The rising EV demand in India has also opened up numerous business opportunities in the EV sector for small-scale industries and businesses in three key segments – mobility, infrastructure and energy. Some of the areas include:
-Establishing EV fleet
-Public charging stations
-Battery recycling business
-Grid energy storage modules
-EV service and maintenance
-Battery pack and cell manufacturing
-Solar-integrated EV charging
-EV training services
The Indian EV Industry is slowly picking up speed, and with the right support from the government and with people looking for alternatives to expensive fuel, it has the potential to zoom ahead. At IEC Air Tools, we have the right range of fastening tools that are required by the EV industry. We understand that assembly operations feature heavily in the EV industry, and our pneumatic range of tools can cater to the heavy-duty assembly lines perfectly. Our tools, like impact wrenches, oil pulse wrenches and impact screwdrivers can seamlessly meet the fine balance of productivity and accuracy, while also reducing TCO.
Reach out to us today to know more.