The story first appeared in MW’s Car & Bike Special Issue in June 2017

Imagine a future that is driven by clean energy, with zero-emission automobiles ruling the roost; this would considerably lower the fuel import bill and running costs of automotives as well. At least that’s what the government envisions, because the Ministry of Heavy Industries’ most influential think-tank, NITI Ayog, unveiled a policy in May aimed at electrifying all vehicles by the end of 2032. 

According to the 90-page report, the government needs to start working on opening a battery plant by the end of next year, and invest the money coming in from petrol and diesel tax revenues, to set up charging stations for electric vehicles across the country. It also recommends lower taxes and loan interest rates on electric vehicles, while capping the sales of fuel-run cars. But is that all that it would take to fully electrify the country’s automobile market?  

What’s been going on?

As things stand currently, Mahindra & Mahindra remains the only full-fledged player in the country’s EV market, and more concerted efforts are needed to realise the dream of going all electric by the end of the next decade, believes automotive road tester Abhay Verma from ZigWheels.

“Founded by a private outfit in Bengaluru, Reva was the flag bearer of India’s initial tryst with EVs. The latest electric product from the stables of Mahindra (which acquired the company), the e2o Plus, can also be considered a manifestation of the same design,” he said.

He added, “Having test driven the e2o Plus, it can be called a viable option if one has to cover short distances, say between work and home. But it feels really stretched on the highway, and you’re required to have another fueloperated car in your garage for more intense applications.

A little more groundwork needs to be carried out, and inspiration can be sought from the likes of Tesla, which also seems to be testing the waters in India at the moment.”

Tesla is expected to make its entry into India in the near future

Following the NITI Ayog’s latest report, Mahindra lined up a mega expansion in its electric vehicle portfolio, which will certainly go beyond the e2o Plus. Mahesh Babu, CEO at Mahindra Reva Electric Vehicles Ltd, praised the government’s endeavours towards electrification, and gave a sneak peek into the company’s future product portfolio.

“The line-up of the company includes the e2o mini car, an e-Verito sedan and an e-Supro mini passenger and load carrier, and we are already targeting fleet operators and aggregators like Ola. We’re now looking at completely electric products across segments, with 2-3 such SUVs also to follow,” he said.

It’s little surprise that the latest developments are also interesting Chinese EV makers. China’s biggest automaker, SAIC, recently set up a local unit and, according to Reuters, is eyeing this ‘big opportunity’ ‘to establish a modern, innovative brand image.’ The Warren Buffettbacked BYD already builds electric buses in India, while rival Chongqing Changan may enter the country by 2020.

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What’s lacking?

A big talking point from the report was the change in India’s focus from incentivising both electric cars and hybrid vehicles (cars that combine fossil fuel and electric power) to just electric cars. It reminds one of the aggressive campaign that neighbours China have adopted, to discourage fossilfuel cars in big cities and introduce research funding to make electric cars better.

In doubling down on electric power, India would be shifting away from its previous FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) policy, announced in 2015, that supported hybrid and electric technology.

Aimed at encouraging people to sign up for clean fuel technology cars through incentives, the policy couldn’t attract substantial attention to EVs/hybrids. It is now its final months, as a future strategy is being finalised.

This radical shift in policy, and the cloud of ambiguity hovering above it, have deterred the prospects of OEMs investing immediately in the country’s EV landscape. Honda Cars India president and CEO, Yoichiro Ueno, had recently remarked, “Honda is developing electric cars. However, we believe it is too early for India to talk about EVs. One thing is infrastructure and secondly the car price will be more than double.”

The proposed policy overlooks conventional hybrid models already sold in India, such as Honda’s Accord sedan and the ‘mild hybrids’ built by Maruti Suzuki. And according to industry sources, Toyota and Nissan Motor will also seek more clarity before finalising future products for India, while Hyundai may delay new launches as well.

Autocar India editor Hormazd Sorabjee expresses reservations about the idea of skipping the steps on the ladder to complete electrification. “You need to first have an ecosystem of hybrid and plug-in hybrid vehicles in the country, to set the platform for going all-electric. Making a straight jump is difficult,” he said, adding “These ideas are more feasible in smaller countries, and we’re way behind in terms of technology. But once the prices go down and the range of the cars is increased, customers will embrace EVs.”

What’s next? 

As a silver lining beyond the issues of weak infrastructure, consumer distrust, lack of innovation and price sensitivity, the country’s rather anonymous electric car market received a major boost on the third anniversary of the Narendra Modi government recently. Union road transport and highways minister Nitin Gadkari launched a public transport project in his home town of Nagpur, which became the country’s first city with an electric fleet of 200 electric vehicles.

The fleet comprises 100 of the Mahindra e2o Plus, alongside vehicles sourced from manufacturers including Tata Motors, Kinetic, BYD and TVS. Even cab aggregator Ola has invested north of Rs 50 crore towards EVs and charging infrastructure, starting with 50-plus charging points across four strategic locations in Nagpur. A similar service also operates in Bengaluru, where the lack of charging stations has caused it to cater to only corporate clients, as per reports.

The latest model from Mahindra Electric, the e2o Plus

That said, the move to introduce electric technology on public transport seems a logical next step, to realise Mission 2032. Even Mahesh Babu of Mahindra Electric agreed. “As we had said earlier, the focus is on mass mobility and electrifying last mile connectivity. For the same, we will be launching an electric 32-seater bus within the next 12 months, with other products to follow soon.”

Mahindra’s recently launched fleet of electric taxis in Nagpur

Furthermore, Maruti’s parent company Suzuki, along with Toshiba and Denso, plans to invest Rs 1,100 crore to set up a lithium ion battery plant in India, which would support Maruti’s plan to build more hybrids, and ultimately EVs. And if the idea of going all-electric in the next 15 years receives the kind of government support that Maruti Suzuki did at the time of its inception in the country, there’s little reason why there can’t be a shift in consumer mindsets once again.