India Faces Shortage Of EV Buyers Despite Among Top 3 Automobile Markets

India is currently one of the world's top three auto markets. A remarkable achievement, but one made possible by internal combustion engine vehicles despite pressure from the rest of the world to switch to cleaner electric vehicles.

India outsold Japan in four-wheel vehicle sales last year with over 4 million units sold, trailing only China and the US. That represents a startling turnaround from almost eight months ago, when sales sank to a decade-low and large portions of production capacity were idle. Now that the economy is expanding quickly, vehicle purchasers are returning and ready to spend. Aspirational Indians are pushing towards the passenger category, despite the fact that the bigger market is dominated by motorbikes, whose ownership costs are lower than in the case of larger automobiles.Now a larger percentage of the mix also includes larger sport utility vehicles.

This month at India Auto Expo, the nation's largest auto show, automakers unveiled a lineup of glamorous EVs to urge the country's budget-conscious buyers and to keep up with the green boom. Domestic and foreign producers like China's BYD Co. and Kia Corp. also made hopeful announcements. The issue is that while purchasing one of these recently announced four-wheeler EVs is an exciting proposition for purchasers heading to showrooms, the economics are a little more challenging once they get there. India's two-wheeler, or 2W, the market has seen the majority of the country's electric success. Additionally, it won't be simple to reproduce for bigger vehicles.

This is due to the favourable economics of 2W electrics in the nation: A growing trend toward battery swapping has eliminated range concerns, the power packs are smaller and consequently less expensive, and charging is more widely available. In the meantime, buying an electric motorcycle has become a viable option due to the fact that gas prices are no longer a factor in the cost of living. The money saved is quite useful. Furthermore, further government incentives are beneficial.

The emergence of 2W electric vehicles is comparable to that of CNG vehicles in India. Drivers were encouraged to use these vehicles by regulations and cost savings. People are willing to wait in line to fill up because the economy is good; huge queues of cars waiting to fill up are usual. If the delays benefit their budgets, people won't moan about them.

However, it is precisely because of the economics that four-wheeled EVs are expected to experience a rough ride in India. Electric cars are too costly for what they give drivers despite a wide range of options for buyers, especially right now. Even if corporations are encouraged to build infrastructure and we have adequate charging stations, power grids cannot sustain charging networks. Many areas of the nation have inconsistent electrical supplies, and larger batteries need to be charged at higher voltages and capacities. Given the size of India and its notoriously awful traffic, the existential EV problems of range and the fear surrounding running out of power linger. Few people can afford the luxury of driving an electric vehicle when you compare that to the cost of purchasing one.

The notion that broad adoption will happen soon is wishful thinking until it is more economically feasible for the typical Indian. Most manufacturers' costs are rising at the same time. The battery supply is now intermittent and difficult to come by. According to reports, the quality of power packs entering India is likewise poor.

That presents a challenge for the government of Prime Minister Narendra Modi, which has aggressively promoted its greening goal, along with all the major corporations that joined the journey.

Ashok Leyland and Tata Motors, among others, had a variety of alternative fuel cars on show at the Auto Expo, including hydrogen, ethanol, flex fuels (which operate on ethanol mixes), electric, compressed natural gas, and more.

There is a more practical answer: Try hybrid. Remembering that we need a means to an end is important before writing it off as a passing fad. They can contribute to reducing emissions, allowing Delhi and other Indian cities to emerge from the haze that is endangering the health of millions of people. Customers have the choice to test out the electric side, reducing their carbon footprint and without having to worry about charging throughout the day.

Hybrids, on the other hand, only require a fifth to a fourth of the batteries required for EVs, making them less vulnerable to the escalating cost of power packs (which make up over 50 per cent of the cost of electrics). In the end, the car is more affordable and productive. Increased subsidies could make them an alluring value proposition for Indians. The purchase of these vehicles is already indirectly encouraged by policies in the US and China.

That being the case, it is understandable why shrewd BYD, one of China's top automakers, declared its plans to seize 40 per cent of India's EV market by the end of this decade. However, it has not yet committed to establishing sizable production facilities, preferring to first determine demand. The company continues to import batteries that it makes in China and assembles cars from imported semi-knocked-down kits. Toyota Motor Corp., the biggest manufacturer in the world and a fervent supporter of hybrids debuted a cleaner version of the already well-liked Innova as its second model in India late last year.

Yes, the use of hybrids by drivers is frequently problematic. According to studies, they are ultimately driven more by fuel and less by electricity. True, but they offer a superior alternative to petrol guzzlers when energy costs and emissions come to the fore.

Providing additional incentives to companies like BYD to introduce their hybrid models first could help India get started on the path toward fewer emissions. Manufacturers may also wish to start implementing practical solutions that support the energy transition rather than merely the distant future. When the price is correct, electricity will occur for Indians. This innovation moves us closer to that goal.