Mr Anil Srivastava – Principal Advisor, NITI Aayog spoke to an audience comprising of business leaders, investors, government representatives and industry experts at the World EV Show in Delhi on 14th November 2019.
Presenting some takeaways from his talk.
1. Mr Srivastava stressed on the point that the EV industry is at the centre stage of economic activity for policymaking. Contrary to forecasts made by research agencies (Shantanu Jaiswal from BloombergNEF had spoken right before Mr Srivastava, see the charts below for reference), he expects to see a steep surge in clean energy adoption in the country including solar and electric vehicles if necessary awareness is generated.
2. The reason for disagreeing with the agency forecast lies in the fact that India’s dynamics are different from the rest of the world. 60% of the movement in India is supported by the non-motorized, informal transport system. India’s low personal car ownership (20 per 1000 individuals), average trip size of < 5 km, and average speed of motorized vehicles < 25 km/h make a strong case for priority EV push in 2W, 3W and public transport segments. Mr Srivastava reiterated the government’s intention to push EV penetration in these categories. Bloomberg Forecast takes into account private 4Ws as well, that make the largest chunk of EVs sold in the evolved markets of Europe and the US.
3. Highlighted the major policy decisions that have been made to boost the electric vehicles ecosystem, such as – Free permits for commercial operations of EVs, classifying the setting up of charging stations as a de-licenced activity, making it mandatory for all new housing complexes to provide provisions for charging and green number plates for identification and promotion of EVs. We feel that the distinct number plates will also make it easier to deliver certain incentives like reserved parking spots or waive-off / discount on tolls if implemented.
4. Acknowledged that high battery prices remain a barrier. Raw materials (Lithium, Nickel, Cobalt) are unavailable in India and make for 19% of the Li-ion battery cost. Mr Srivastava told the gathering that supplier countries of raw materials – Bolivia, Chile and Australia are coming forward to supply these necessary materials to India. At present, we are importing the Li-ion cells, mainly from China. The government will make an announcement to incentivise cell manufacturing within the country, providing direct incentives per kWh.
5. Speaking about the need to innovate and research in the country, Mr Srivastava urged the Industry to leverage the scale of the Indian automotive market to manufacture in India and supply to the world, instead of circumventing the localisation norms set by the government. “Let’s not miss out on the opportunities offered by the EV manufacturing, as we did with solar and cell phone manufacturing“, he added.
Mr Srivastava also added that the wishlist of the NITI Aayog and the government is to reduce the crude oil import bill, generate sufficient renewable energy and have the infrastructure in place to enable charging of electric vehicles from renewable energy, reduce India’s logistics costs from current 14% of the GDP to 9%, build adequate solar energy generation and battery storage capability (not necessarily Li-ion) to meet the electricity demands of rural India.