Indian EV companies benefit from foreign cooperation

Avanthika Satheesh of India Energy Storage Alliance. Credit: IESA

As India’s EV growth continues to stabilize, industry groups say working with global peers will help local businesses. India’s Energy Storage Alliance (IESA) recently reported that India’s EV market is expected to grow by 49% between 2021 and 2030, with annual sales expected to exceed 17 million by 2030. said it is possible.

Recently, in an interview with DIGITIMES Asia, Avanthika Satheesh, Industry Research Manager – Emerging Tech, Customized Energy Solutions, India Energy Storage Alliance, said that many companies working in this space already have international players and strengths. I pointed out that it fits.

“The government has allocated Rs 180 billion (US$2.3 billion) to support local lithium-ion battery manufacturing under the 50 GWH Advanced Chemical Battery Production Linked Incentive (PLI) scheme,” said Satheesh. explained. “These 10 companies participated, 4 of which were selected to receive the subsidy. We are starting production.

However, the localization process is also progressing well. For his EV parts such as motors, controllers and magnets, Satheesh pointed out that several companies have already started local production in the two- and three-wheeler segments. This is expected to happen slowly on electric buses as well. The company that acquired the magnet technology is also largely unknown, though no official announcement has been made yet.

Factors driving demand

An IESA report suggests that EVs will grow exponentially over the next decade. Rising fuel costs and government efforts aimed at making EVs more attractive are key factors driving this growth, Satheesh said.

“The main factors driving demand for EVs are higher gasoline and diesel prices, FAME subsidy incentives, lower lithium battery prices, attractive total cost of ownership for commercial vehicles, subsidy support, and charging infrastructure. It’s the state’s EV policy for development,” Satish said.

Interestingly, an IESA report states that lead-acid batteries are most popular in India as they are used in battery-powered three-wheelers, but as companies launch more vehicles using lithium-ion. This may change over time. Lithium Iron Phosphate (LFP) is the preferred choice for electric 3- and 4-wheelers, while Nickel Manganese Cobalt (NMC) is primarily used for electric 2-wheelers and e-buses.

Steps to lower costs

The Indian government has proposed a number of plans to bring down the cost of electric vehicles. In addition to the central government, local authorities are also pitching various offers that could improve the market.

“Costs are expected to come down due to increased local production of EV parts, underpinned by a phased manufacturing program and the auto parts Auto PLI scheme,” said Satheesh. “ACC PLI battery support will lower the cost of EV batteries. EV OEMs are supported by the government’s Auto PLI subsidy scheme. Increased manufacturing and production scale will further reduce costs.”

However, there are some concerns that ongoing global economic headwinds may curtail the support currently provided by governments. Even if this happens, the market could recover by the time the current scheme ends, Satheesh said.

“If the allocated Rs 10,000 is not utilized by 2024, the scheme may be extended,” Sasheesh said. It is quite possible that it will be withdrawn.”

Segments with growth

Three-wheelers account for 50% share of annual EV sales and belong to the commercial vehicle category. For two-wheelers, food and parcel delivery applications are driving demand for EVs. Major e-commerce companies such as Amazon and Flipkart have announced moves toward electrification within the next three to four years, which is also expected to boost growth.

“In the commercial four-wheeler segment, Lithium Cab, Ola electric, Blu Smart and several others have announced targets to convert a percentage of their vehicles to electricity,” added Satheesh. “Total cost of ownership is becoming more attractive by the day as gas and diesel prices rise.”

persistent challenges

As the industry moves forward, there are some challenges that must be overcome. The most obvious of them is high capital expenditure. Currently, subsidies are available, but it is difficult to get financing due to high interest rates.

“FAME subsidies are levied on vehicles to reduce upfront investment costs,” Satheesh pointed out. “Even though EV financing rate is currently higher than ICE, interest on EV loans is tax-free. A subsidy of up to INR1000 crore has been announced by the Ministry of Heavy Industry to encourage the installation of public charging stations. CESL, a government agency, is aggregating demand for charging stations from PSUs to pay subsidies and expedite the installation of charging stations.”

The industry also needs to address ongoing supply chain and semiconductor shortage concerns. There are signs that these issues are beginning to abate, but their impact is still wreaking havoc across the industry.

“It’s severely impacted,” said Satheesh. “Currently, the waiting time to acquire an EV such as the Tata Nexon is six months. There is a possibility that Indian EV companies benefit from foreign cooperation

Back to top button