Why Electric Vehicles In India Having Sluggish Growth?

The government of India, recently, inaugurated country’s first electric mass mobility system in the city of Nagpur. With this new project, India moved an inch closer towards its aim to electrify all vehicles in the country by 2030.

According to industry body Society of Manufacturers of Electric Vehicles (SMEV), sales of electric vehicles (EVs) in India grew by 37.5 per cent in 2016 to 22,000 units.

The benefits of EVs are expected to provide a net positive economic impact of approximately Rs 200 billion to the power and utility sector in the country by 2022, said Ernst & Young Global 2016 report.

However, the road isn’t rosy for electric vehicles.

1. Infrastructural issues

India lacks charging stations which are necessary for EV industry to grow. "Success of EVs in India will depend on the availability of electricity, charging infrastructure, the cost of charging batteries, and overall vehicle maintenance,” says Frost & Sullivan analysis.

According to Central Electricity Authority, India is still facing a deficit of 1.6 per cent in power production. The problem is even more acute in tier-2 cities and remote parts of the country. This further limits the market for EVs in India.

According to ministry of power, there has been 19.18 percent growth in power generation in the country in fiscal 2016.  

2. Initial cost

Current EVs sell at higher prices compared to the conventional petrol and diesel vehicles. This is in itself a big challenge for the industry, especially in a price-sensitive market like India.

One of the ways this can be tackled is by granting subsidies to lower down the production cost of EVs and boost the sector.

3. Limited options

The variety of electric vehicles is still limited. The options further narrow down when you look for EV options keeping a budget in mind.

4. Limitations of EVs

With top speed of 70 miles per hour, electric vehicles are a poor bet for highway driving. Further, a complete battery recharge takes up to eight hours.

Although EVs are classified as green cars, but disposing of large lithium batteries, fitted inside the cars, can be an environmental hazard.

5. Awareness

The major impediment to the growth of EV industry in India is the lack of awareness towards electric vehicles in India.

Sohinder Gill, Corporate Director, SMEV told BW Businessworld, “The government needs to promote electric vehicles just like it promoted Light Emitting Diodes (LEDs) with full-page newspaper advertisements and hoardings. Public sector banks must start financing electric vehicles, especially two-wheelers. Till now steps have been taken only to make EVs popular in the commercial sphere. There is an urgent need to promote it for private users too.”