Electric Vehicles Market in India 2019 By Avani Mishra - August 20, 2019 Last Updated at: Jul 14, 2020 2871 Electric Vehicles Market in India 2019 Electric vehicles sales, excluding e-rickshaws, grew by 20 percent in India in 2019-20, industry body Society of Manufacturers of Electric Vehicles said on Monday. As many as 1.56 lakh EVs were sold in the country in 2019-20 as against 1.3 lakh units in the previous fiscal, SMEV said in a statement. After the initial success of its electric vehicle Nexon EV, Tata Motors is launching 2 more variants in 2020. Named Altroz EV and Hornbill EV, these vehicles will be available in India in the starting range of 7-10 lakhs. The government of India in its latest budget rolled out several new announcements to boost the slowing automobile economy, including a bunch of reforms for transforming the electronic vehicles market. In this post, we highlight the nuances of the booming electric vehicle industry and also forecast prospects of investing in this upcoming segment. Why is India the right market for Electric Vehicle development? Various independent and government surveys have shown that besides a glorious future for electric vehicles, it is the two and three-wheeler electric vehicles which are slated to show the greatest growth. We currently have 1.5 million electrically powered three-wheelers on the road. India is also the third-largest automobile market in the world, making it the Electric Vehicles segment a strong consumer-driven business. With the world attention shifting to the adoption of cleaner technologies with minimal environmental impact, the future of the electric vehicles industry seems bright, albeit with several challenges. Government Schemes for Electric Vehicles FAME – Faster Adoption and Manufacturing of Hybrid and Electric Vehicles This scheme, with an outlay of 10,000 crores has primarily been made for investment in charging stations with participation from both private businesses and the public sector. Projects for improving infrastructure envisage a faster-charging dock for small vehicles and larger charging docks for buses and heavy vehicles. Original equipment manufacturers will be given incentives such as subsidies under the scheme for innovation, setting up charging networks, simplifying the process of operation and installation electric vehicles. Buses priced up to 2 crores, hybrid vehicles under Rs 15 lacs, three-wheelers under Rs 5 lacs and two-wheelers under Rs 1.5 lacs can avail incentives under the scheme. Tax rebates to buyers of electric vehicles Besides offering subsidies to manufacturers, the budget released by finance minister Nirmala Sitaraman earlier this month made the government’s intention of promoting the consumer side of the electric vehicles industry very clear. While car loans for traditional vehicles are easily accessible and offer plenty of easy financing options, the electric vehicles have been priced higher. Register Your Startup Business To ease the burden on the buyer and facilitate financing, an income tax rebate of up to 1.5 lacs on the interest component of loans taken by customers to buy electric vehicles is available, with a total of 2.5 lacs over the entire loan period. Moreover, customs duty exemption on lithium-ion cells has been announced to reduce the cost of importing this essential component of electric vehicles, and several new exemptions under direct and indirect taxes are two-wheelers for manufacturing inputs for the electric vehicles industry. Training courses on Electric Vehicles Ministry of Skill Development and Entrepreneurship has also announced new ITI courses on Electric Vehicles to maintain a steady and trained workforce ready to take on the increase in demand. Comparing the Indian Automobile Industry with Developed Markets like China The International Energy Association data reports that China is the fastest growing industry when it comes to electric vehicles. China has imposed strict restrictions on investments in new petrol or diesel plants and plans to sell 4.6 million electric vehicles by 2030. Similarly, Japan has also offered support to its domestic manufactures for export of electric vehicles and has framed an ambitious target of reducing emissions from vehicular sources by 80%. Thus, if India does not capitalise on its expansive automobile industry, upgrade its existing infrastructure and train consumers and workforce to adopt this technology, several countries would stand to gain. The NITI Ayog is also considering a proposal to ban all traditional combustion engine vehicles by 2025. Challenges While an increase in petrol and diesel excise duty, parking cess, congestion taxes etc are necessary for shifting demand towards the use of electric vehicles, they are at the end of the day forced and artificial means. A systemic problem regarding the use of electric vehicles is the lack of infrastructure that India needs to power its slowing automobile industry, and a change in the general perception regarding pollution, congestion and air quality impacts of vehicles that use traditional fuels. Since the FAME Scheme, Phase 2 shifts its focus on charging – Lithium battery assumes greater significance. One of the major problems in the Electric Vehicles industry is the lack of availability of Lithium and other components that make up the composition of a rechargeable battery. Manufacturers who invest in developing electric vehicles and its components like the lithium-ion battery etc are promised incentives by the central government. It is also believed that a proper recycling mechanism for electronic waste such as old computers, cellphone batteries etc can be used to extract lithium that can be used in the electric vehicles’ battery making process.