Make in India in the Automobile Sector

The Indian economy is at a cusp of a revolution. With a growing sense of self-reliance and national pride, India has the potential to bring about a positive change in the economy, particularly in sectors that have always relied on imports. The question that needs to be asked then, is how can advanced solutions like electric vehicles and retrofitting boost India’s economy as well as efficiency in transportation. 

Need for Localization in EV Supply Chain
The Indian government has set a lofty target for electric vehicles (EVs), with aims to dramatically reduce carbon emissions from diesel and gasoline engines by 2030. As a result, the country is taking measures to convert to electric vehicles. However, this transformation cannot take place at a rapid pace. The nation must concentrate on reducing its carbon footprint in order to achieve its goal by converting the existing ICE vehicles into 100% electric ones. Retrofitting extends a vehicle’s life by 5-7 years and exempts it from the current scrappage scheme.

It is projected that by 2030, there will be about 3 million buses on Indian roads. The amount of other public transportation would increase at a similar pace. Our city roads will become congested if we simply add more electric public cars to the existing fleet in the name of reducing carbon emissions. Thus, adding a small number of electric vehicles when retrofitting existing vehicles to electric models is a feasible option. Not only will it keep the vehicle count under control, but it will also reduce automotive emissions.

To compete in the global automotive market, India’s industry must step-up and produce high-quality, cost-effective goods. Only by developing the EV ecosystem locally– R&D and design, battery manufacturing, traction motors and their components, power electronics, software, and so on – can India, truly, become “Atmanirbhar” and competitive in the EV space. This will allow us to be self-sufficient, as well as resolve the Indian consumer’s price sensitivity. Given the vast differences in infrastructure alongside weather and conditions, some products or components designed for European or American roads will not necessarily function in India. Keeping these factors in mind, they should be localised and indigenized.

In order to build a localised solution for electric buses and freight vehicles, we need a pool of dedicated capital and resources in India. To meet the technological and commercial needs of Indian consumers, an amalgamation of best technology and Indian localization must be developed. Third-party logistics firms, fleet operators, major corporations, state transportation agencies, etc should also electrify their bus and truck fleets.

Government policy/ frameworks for retrofitting
To minimise the annual carbon emissions, India is proactively moving forward with the implementation of the National E-Mobility Program that aims to have 30 per cent of vehicles on the road, to be electric vehicles by 2030. To this end, India’s Ministry of Petroleum and Natural Gas has ordered major oil companies to install electric vehicle charging infrastructure in nearly 1,000 fuel stations across the country.

Alongside focusing on EV/hybrid sales for new vehicles, existing on-road vehicles must be retrofitted immediately to mitigate the negative effects of ICE. The installation of hybrid retrofit kits is a convenient method of retrofitting. Hybrid retrofits are quickly becoming economically viable. With simple installation mechanisms that provide significant savings to consumers, they lower the overall cost of ownership.

The capital costs of these devices are usually recovered in a few years due to significant improvements in mileage. Economic benefits are combined with a nearly 20% reduction in CO2 emissions and a significant reduction in overall tailpipe emissions. Retrofitted vehicles emit less particulate matter (PM), nitrogen oxides (NOx) and carbon dioxide (CO2) than conventional vehicles as they use less gasoline per mile. Thanks to the cleaner nature of retrofitted vehicles, hybrid retrofits are an ideal transitional technology when transitioning to a fully electric vehicle regime.
 

Regulatory perspectives
The importance of retrofitting commercial vehicles over passenger vehicles is greater since there is a much greater reduction in carbon emissions. In the end, the customer benefits from significant operating cost savings. CV conversions, in the 15-50 GVW range, can provide 60 percent or more operating cost savings per km, as well as significant maintenance cost savings because the number of moving parts is reduced by one-tenth.

Multiple companies, of varying scales, are developing auto components in India for the EV market. However, many of these businesses don’t have access to financing. Furthermore, the government provides no subsidy or incentive for EV retrofitting. The FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme, in its current form, is better suited to established OEMs (Original Equipment Manufacturers) and does not provide much assistance to small businesses. Finally, policies governing vehicle scrapping and retrofitting should be more specific at the state and federal levels.

In India, electrification of EVs is still in its infancy, with charging infrastructure (or the lack thereof) posing a significant barrier to EV adoption. As a result, retrofitted EVs can be among the first to enter the market by creating demand for charging, localised components and batteries, service infrastructure and usage pattern analysis, among other things.

Future of e-Mobility in India
According to Niti Aayog chief executive, Amitabh Kant, at least 22 people, out of a thousand, own a car in India. Alternatively, in the United States and the United Kingdom, about 980 and 850 people out of 1,000 own a car, respectively. As the automotive market matures, this huge gap represents a tremendous opportunity for Indian companies to grow.

India, however, faces its own, unique, e-mobility problems, which will take its due time to solve. The lack of charging infrastructure, repair and maintenance know-how, alongside consumer technophobia and a large price difference, when compared to ICE vehicles, are all major roadblocks that India still has to resolve. Customers in India would be “followers” of what western countries have already begun to embrace a few years ago. The new scrappage strategy would almost certainly improve PV and CV sales in India, whether IC or EV.

Finally, the policy would aid in the relentless churn of cars, ensuring that we have cleaner and less polluting vehicles on the road. If all of these puzzle pieces fall into place, India has a good chance of becoming a global pioneer in e-mobility in the next ten years.
 

- Karan Shah, Executive Director, Precision Camshafts Ltd & EMOSS Mobile Systems BV