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Emerging Asia’s EV Jackpot

In India, owning electric scooters and three-wheelers is currently $40 to $112 cheaper per year compared to petrol alternatives, when considering the total cost of ownership…reports Asian Lite News

The mobility sector in the emerging markets of South and Southeast Asia could absorb up to $1.3 trillion in green capital by 2030 and India holds the future, a new report said on Friday.

In India, electric scooters and three-wheelers are currently around $40- $112 cheaper per year to own than petrol alternatives based on the total cost of ownership.

The report, prepared by LeapFrog Investments, Temasek, Mahindra Last Mile Mobility Limited and Battery Smart, mentioned that 70 per cent of electric three-wheeler buyers in India are low-income, first-time buyers.

Mobility emissions represent 10 per cent of total GHG emissions across Asia, but 25 per cent of Europe’s emissions and 30 per cent of the US, making rapid electrification critical to avoid a spike in emissions as incomes in emerging Asia rise, the report said.

“The electric mobility revolution across high growth markets is gathering pace. We have identified a $1.3 trillion opportunity for the private markets and impact investment community to transform our global transportation future,” said Souleymane Ba, Partner and Co-Head of Climate Investment Strategy, LeapFrog Investments.

An increasingly efficient network of battery swapping stations, supported by interoperable battery systems across vehicle manufacturers, has dramatically improved re-fueling infrastructure for EVs.

Improved charging/refueling infrastructure is making EV ownership particularly attractive for commercial users. In India, EVs now account for an estimated 20 per cent of three-wheeler last-mile transportation (passenger and cargo) fleets.

Dr Steve Howard, Vice Chairman, Sustainability, Temasek, said that the technology improvements and business innovation they are seeing in emerging Asia’s EV sector, when coupled with enabling policies and substantial investments, “hold tremendous promise for transformative impact at pace and at scale”.

Suman Mishra, MD and CEO, Mahindra Last Mile Mobility said they remain committed to supporting India’s journey towards reduced carbon emissions by providing sustainable and cost-effective solutions.

India is already the world’s largest electric three-wheeler market and is uniquely positioned to achieve full electrification of the category.

With nearly four million electric vehicles (EVs) sold in India cumulatively by March this year, the market is in the midst of an explosive growth phase and will become a major power consumer, a report said on Thursday.

From merely 1.3 lakh EVs sold in 2020, an estimated 1.6 million EVs were sold in the country in 2023, which is a sizeable compounded annual growth rate of 133 per cent in the last three years.

For the same period, the share of petrol vehicle sales of total vehicle sales reduced from 86 per cent in 2020 to 76 per cent in 2022, with diesel vehicles share remaining relatively flat at 11-12 per cent, according to a report by OmniScience Capital.

India has set an ambitious target of 30 per cent EV penetration by 2030, supported by government subsidisation and EV-Infra schemes such as FAME India (Faster Adoption and Manufacturing of Electric Vehicles) which aims to provide subsidies to EV customers, and PLI (Production Linked Incentive) schemes to boost domestic manufacturing of EVs and EV components.

In addition, with fossil-fuel prices rising and global EV battery prices expected to keep falling till 2030, the total cost of EV ownership – which is already the lowest compared to its petrol, diesel and CNG peers – would fall further.

This increasing cost effectiveness compared to traditional vehicles will be the primary factor that drives EV adoption in India in future.

“With an anticipated total power consumption of approximately 100 TWh by 2030, EVs have the potential to rank among the nation’s single largest power consumers,” said Vikas Gupta, smallcase Manager and CEO at OmniScience Capital.

The power sector in India has witnessed a major turnaround post-Covid, with power consumption growing at an annualized rate of nearly 10 per cent from FY21 to FY24 which is expected to continue till 2030.

The growth in power consumption will be in sync with India’s nominal GDP growth which is expected to cross $7 trillion by 2030, the report mentioned.

The data centres’ market in India is also expected to grow exponentially as data protection and localisation is prioritised.

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Business Economy India News

‘EVs Not Clean Until India Shifts to Renewables’

R.C. Bhargava, the Chairman of Maruti Suzuki Ltd. said that the electric cars will not be clean until India gets at least 50 per cent of its electricity from renewable sources…reports Asian Lite News

The carbon footprint of electric cars in India would be much bigger than that of hybrid cars because in the country, 75 per cent of the electricity is made from coal, according to R.C. Bhargava, the Chairman of Maruti Suzuki Ltd.

He made the remarks while addressing the 50th National Management Convention organised by All India Management Association (AIMA).

Bhargava said that the electric cars will not be clean until India gets at least 50 per cent of its electricity from renewable sources.

Until then, the hybrid cars will be cleaner, he said, adding that even shifting to CNG cars is a better option, as CNG is a cleaner fuel than petrol.

“May be India should move to ethanol, hydrogen and fuel cell options instead of going for electric cars,” he said.

Talking about coming slightly late to the electric car market, Bhargava said that Maruti had built an electric version of the Wagon R but its cost was too high, and now Maruti would come to the market with larger electric models which could be more viable.

However, he said that even with six electric models, the share of electric cars in Maruti’s sales would be only 15 per cent to 20 per cent.

He pointed out that today, the share of electric cars in Indian car market is only 2 per cent.

 On Maruti’s decision to stop diesel car production, Bhargava said that while the government is not preventing anyone from making diesel cars, the compliance with CAFE standards will make their costs exorbitant.

On the subject of the shift of the mass market from small hatchbacks to SUVs, Bhargava said that though the whole market is not shifting, the small car market is not growing anymore. He said that it is because of that the growth of Indian car market is only about 5 per cent a year instead of 8 per cent.

Talking about automotive supply chain issues, Mr Bhargava said that currently there are no production constraints because of semiconductor shortage. However, he regretted that all electronics for Indian cars have to be imported.

“India needs to get more component makers to make in India for India and for global supply chains,” he said while also highlighting the lack of local electronics suppliers as the only weakness in India’s auto components supply chain.

 Bhargava expressed confidence about the growth of India’s car market. H

e said that there is no other market in the world with the same growth potential, as other major markets such as the US, Japan and China have become saturated and rely on replacement sales.

 Talking about competition in Indian car market, Mr Bhargava said that Indian market has been very competitive for the past 15-20 years and now it is set to get even more competitive as global car makers can see an opportunity in the changing car technology and regulations.

He said that Maruti will try to keep a large part of the Indian car market under its control by offering the best of technology, reliability, and after-sale service.

 On the issue of stagnant growth of Indian manufacturing sector despite the increased ease of business and production-linked investment scheme, Bhargava said that the state government bureaucracies are still stuck in the licence and control mindset and even the entrepreneurs are more focused on accumulating personal wealth instead of growing their companies.

“Time is not valued by state bureaucracies… and entrepreneurs cannot lay the blame only on labour laws,” he said. Manufacturing sector growth is only 5 per cent while India needs a 12 per cent annual growth, he said.

 Talking about India’s limited success in benefiting from the China plus one strategy of global companies, Bhargava said that India is not the only option for them, and many of them are moving to Vietnam.

 Regarding the new safety regulations such as Bharat NCAP, Bhargava said that so long as it is easy to get driving licence without tests, it will be difficult to bring down the accidents and deaths on Indian roads.

He said that India has no system of mandatory vehicle fitness certification for cars and scooters. He pointed out that most of the road deaths involve two-wheeler riders and pedestrians.

 Bhargava is confident about the future of Indian car industry though the expensive transition to new technology and regulations are likely to keep its growth at about 5 per cent for the next decade, provided there are no unexpected shocks to the economy.

 The session was also livestreamed on AIMA’s social media channels.

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India turns down Tesla’s call for tax breaks

Tesla CEO Elon Musk. (File photo: IANS)

Prime Minister Narendra Modi’s administration has encouraged Tesla to produce locally, while Musk wants India to lower taxes — as high as 100 per cent on imported EVs — to enable the company to first sell vehicles built elsewhere at competitive prices, reports Asian Lite News

The Indian government has turned down a demand of tech billionaire Elon Musk’s electric vehicle (EV) company Tesla for tax breaks to import electric cars, saying rules already allow bringing in partially-built vehicles and assembling them locally at a lower levy, Bloomberg reported on Friday.

“We looked at whether the duties need to be re-jigged, but some domestic production is happening and some investments have come in with the current tariff structure,” Vivek Johri, Chairman of the Central Board of Indirect Taxes and Customs (CBIC), was quoted as saying in an interview with Bloomberg.

“So, it is clear that this is not a hindrance,” Johri added.

Prime Minister Narendra Modi’s administration has encouraged Tesla to produce locally, while Musk wants India to lower taxes — as high as 100 per cent on imported EVs — to enable the company to first sell vehicles built elsewhere at competitive prices.

However, it levies import duties of between 15 and 30 per cent on parts shipped for assembly in the nation.

Indian Prime Minister Narendra Modi during tour to Tesla Motors with the CEO Elon Musk in San Jose.

Recently, a report said that Musk, who has been trying to launch Tesla in India for the past couple of years, is still haunted by the “key challenges” at the government’s end that have grounded his electric cars from running on domestic roads.

Despite the government luring him with various schemes and promises and repeated “come and manufacture/assemble your cars here” calls from the top ministers, Musk is “still working through a lot of challenges with the government,” the report had said.

According to industry experts, the main challenge for Tesla to enter the Indian market is import duty.

With a $39,990 global price tag, Tesla Model 3 may remain as an affordable model in the US but with import duties, it would become unaffordable in the Indian market with an expected price tag of around Rs 60 lakh, as per the report.

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