In a research paper, Consultancy cautions that India should not follow the Solar Panels story by depending on China for batteries and policy makers must make sure that Make in India is seriously followed here
Mumbai August 8, 2017: The government’s focus on transforming mobility through a shift to electric vehicle will increase viability of India’s power sector which is witnessing a flat rise in demand, according to a research paper issued byFeedback Consulting, a leading research-based business consultancy in India.
Electric vehicles segment also has the capability to become an important contributor to ‘Make In India’ provided a possible challenge from China is addressed, the paper entitled “The Dilemma of Choosing Electric Vehicle Vs Hybrids Vs IC based Auto Development in India” states.
Terming ‘fuel security’ and ‘reduction in carbon emission’ as strategic imperatives for India, the paper says, “A new source of power demand in terms of electric vehicles will be highly appreciated by the power sector. It may lead to a more stable power demand and that too from a paying customer segment over the years and increase the viability of the sector”.
The research done by Feedback Consulting pointed out that most power plants have operated at an average capacity of 55% in last 3-4 years. Power demand rose 4.08% in 2016-17 than a year ago whereas the 12th Five Year Plan had factored in a growth of 7% in demand, the paper says, adding, “This combined with an ambitious renewable energy targets and growth will lead to a serious case of oversupply and the viability of a crucial engine of the Indian economy, i.e. power sector, will be in serious question”.
The paper appreciates the government for planning policy initiatives under National Electric Mobility Mission Plan 2020 (NEMMP) and Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME).
It states that India is at the same stage in comparison to China as it was in the solar industry 5 years ago. “Over the last 5 years, we have seen how the Chinese solar imports have dealt a death blow for our panels manufacturing industry and the Make in India story is a non-starter here. We need to make sure that we do not get trapped in a similar situation in the EVs story as there is every possibility that China will be presenting a huge competition to the Indian industry in this business as well,” the paper adds.
“We would need more action on getting Lithium manufacturing in India move towards local manufacturing in a big way and not be a nation of assemblers with core imports from China. This would need serious work in securing the raw materials for battery manufacturing,” the paper points out.
Talking about the purpose of the research paper, 'Mr. A.M. Devendranath, Vice President, BU Head –AC&R and Energy, Feedback Consulting'
says, “The government has a clear intent to promote electric vehicle as a future mode of mobility and various policies have been put in place to ensure that. This transformation of mobility to electric vehicles will result in green shoots but there are hiccups as well. For a holistic growth of auto sector, we have to collectively work toward a solution that is all encompassing and does not leave any loose ends. This research paper is our attempt in highlighting the green shoots and hiccups while appreciating all that the government is doing”.
The paper points out that the move to electric vehicles will need a considerable investment of Rs. 1.8 lakh crore in setting up charging stations and other infrastructure for electric vehicle. This will enable electronics design and manufacturing sector to have a significant play, it adds. “There will be a need to set up a Global Technology Center in motors design and manufacturing space going forward and we should encourage global firms to invest in India in this,” the paper says.
In its research, Feedback Consulting found that the auto industry, which was mostly operating on internal combustion technology, was gradually moving toward hybrids first before shifting to electric helped by FAME policy. Under the circumstances, the paper states, the immediate impact of government’s push toward electric vehicle may be unsettling for the sector. “One positive aspect that remains is that private 4W segment will still require a longer time to move toward EV and this could be pushed toward hybrids with some policy interventions. This will also help the Indian auto sector to utilize the existing investments in this technology,” it points out.