Electric Vehicles This Week: Govt. To Extend $1.3 Bn Fund Support To EVs Under FAME II

This week, a special task force constituted by government-run think tank NITI Aayog has proposed the removal of all permit requirements for electric vehicles. Created to offer suggestions on clean transportation, the task force has argued that electric vehicles are largely environment-friendly and should, therefore, be promoted more actively by the government.

As a further step to promoting the adoption of electric vehicles in the country, the Indian government is reportedly planning to extend financial support of up to $1.3 Bn (INR 8,730 Cr) under the second phase of FAME India.

In a similar move, the central government is gearing up to offer incentives to local battery makers, with the aim of facilitating the establishment of more manufacturing units in the country.

As a testament to the growing interest in the Indian EV market, a number of global companies – including Kia Motors and China’s BYD – have expressed interest in participating in the government’s tender for electric vehicles.

Coming to international news, Google parent Alphabet-owned autonomous car company Waymo has joined hands with Jaguar Land Rover (JLR) to develop a luxury, self-driving electric car. The vehicle will be utilised for a ride-hailing service operated by Waymo, reports have claimed.

Given that so much has been happening in the country’s electric vehicle sector, we bring to you the 18th edition of the weekly EV roundups.

NITI Aayog Urges Govt. To Remove All Permit Requirements On EVs

A special task force constituted by government-run think tank NITI Aayog has proposed the removal of all permit requirements for electric vehicles. Created to offer suggestions on clean transportation, the task force has argued that electric vehicles are largely environment-friendly and should, therefore, be promoted more actively by the government.

Furthermore, renewing permits on a yearly basis is not only costly but also time-consuming, stated the task force in a report jointly created by NITI Aayog and the Confederation of Indian Industry (CII). “It would require a change in existing permit regime, at national and state level. Safety issues will need deliberation such that they do not impede the success of such intervention,” it added.

In the report, the newly-constituted task force also advocated a long-term vision for intra-city electric buses. The country’s growing two-wheeler and three-wheeler market represents a huge opportunity for the adoption of EV technologies, according to the special committee. In this segment, the Indian government should encourage a large-scale integration of such solutions.

Nissan May Set Up A Digital Hub In Kerala

Japanese automotive major Nissan might set up a digital hub in Kerala. A Nissan delegation led by Corporate Vice-President and Chief Information Officer Tony Thomas recently met state officials to explore further possibilities around the deal. If realised, the facility will be set up in Kerala’s IT park, TechnoPark.

As per reports, the digital hub will basically work as an R&D centre for the Renault-Nissan-Mitsubishi alliance, as part of the Franco-Japanese strategic partnership. The facility will be a host to a team of engineers and scientists working to create innovations in automated and electronic vehicles space.

The digital hub is further expected to create 300 to 500 high-end jobs in the first phase. Apart from Kerala, Nissan is also considering other cities such as Mumbai, Bengaluru, Chennai, Pune, Bhubaneswar and Warangal to start its facility.

In a related news, the automobile manufacturer has announced that it aims to sell 1 Mn electric vehicles annually, starting from 2022. The focus, as per Nissan’s spokesperson, will be on low-emissions all-battery and gasoline-hybrid cars, instead of more expensive EV technologies such as plug-in hybrids.

China-Based BYD Might Bid On Indian Govt’s Second EV Tender

Chinese EV maker BYD might bid on the Indian government’s second tender for 10,000 electric cars, against homegrown giants like Mahindra and Mahindra and Tata Motors, sources have revealed.

The development comes less than a month after state-run Energy Efficiency Services Ltd (EESL) floated the second tender for the procurement of 10,000 electric sedans by the government.

Among those that participated in the pre-bid meeting were Tata Motors, Mahindra and Mahindra, Hyundai, Nissan and solar power developer ACME. BYD is yet to make the final decision, as per reports. Commenting on the development, a person in the know said, “BYD has also been looking at the EV tender, but they were missing from the pre-bid meet.”

On the matter, Saurabh Kumar, MD of EESL stated, “Carmakers like Hyundai and Kia Motors have been showcasing their electric vehicles at different occasions recently. I would assume they would take part in our second tender. We hope to get responses from more players this time.”

Hero MotoCorp Aggressively Pursuing EV Wave

Two-wheeler major Hero MotoCorp is preparing to make a strong foray into the country’s burgeoning EV market. The move is backed by an in-house R&D facility in Jaipur as well as a $31.4 Mn (INR 205 Cr) investment in Ather Energy.

According to sources close to the development, the company is looking to launch both electric scooters and motorcycles. Speaking on Hero MotoCorp’s plans, CMD Pawan Munjal said, “ We are definitely getting into electric mobility. We have invested in Ather Energy (30% stake) which will launch its brand and products in a matter of months. Hero Motocorp will also be developing electric motorcycles and scooters on its own which will be launched under our own brand and that R&D work is currently underway.”

“Hero Electric is a completely different part of the erstwhile larger Hero group and after the settlement, it is now an independent entity. Any company has the right to get into whatever business they think will work for them. So it is not an issue,” he added.

Mahindra And Ford Sign MoU To Build Small Electric Car

The country’s first electric vehicle manufacturer Mahindra and Mahindra has forged a partnership with American automotive giant Ford to jointly develop midsize and compact SUVs as well as a small electric vehicle.

To that end, the two companies have signed five MoUs, as a part of the strategic alliance forged in September 2017 to co-innovate. “Built on the Mahindra platform, the new SUV will drive engineering and commercial efficiencies and will be sold independently by both companies as separate brands,” the companies said in a statement.

On the development, Jim Farley, Ford Executive Vice President and President of Global Markets added, “Ford is committed to offering the best vehicles, technologies and services that fit the lifestyles and preferences of Indian consumers. Listening to our customers and incorporating their future needs is the core premise of this collaboration. With utility vehicles and electrification as key focus areas, we are glad to see the progress our two companies have made.”

Govt. To Extend Financial Support Worth $1.3 Bn Under FAME II

As a further step to promoting the adoption of electric vehicles in the country, the Indian government is reportedly planning to extend financial support of up to $1.3 Bn (INR 8,730 Cr) under the second phase of FAME India.

Spread over the course of five years, subsidies and incentives under FAME II will be limited to new energy vehicles for public transport, commercial purposes and high-speed two-wheelers. According to the Ministry of Heavy Industries, the central government has decided to adopt a “technology-agnostic” approach and will favour advanced chemistry batteries under Phase II of FAME.

Scheduled to be implemented from April 1, of the total $1.3 Bn financial support under FAME II, around $851.8 Mn (INR 5,550 Cr) will be kept as demand-side incentives over the next five years. Apart from that, it will earmark $383.6 Mn (INR 2,500 Cr) for electric buses and $153.4 Mn (INR 1,000 Cr) for four-wheelers.

Another $92 Mn (INR 600 Cr) will be used to offer incentives on high-speed two-wheelers, while high-speed three-wheeler manufacturers and owners will get $115.1 Mn (INR 750 Cr).

On the government’s decision to remove subsidies for lead-acid battery-powered two-wheelers, Hemalatha Annamalai, South Chapter Chief of SMEV said, “There has to be some financing options from the banks for the lead battery EV two-wheelers. Banks need to handhold the lower and middle-income class and act as an enabler.”

“Whilst subsidy may not be required for long-term, it may be required until the industry gets volume drivers, ending the subsidy under FAME will completely make it unaffordable as it will be very difficult to buy EV two-wheeler at their own, so financing through banks must be mandated quickly,” Annamalai added.

Govt. To Offer Incentives To Local Battery Manufacturers

In line with FAME II, the Indian government is gearing up to offer incentives to local battery makers, with the aim of facilitating the establishment of more manufacturing units in the country.

As per reports, Renewable Energy Minister R. K. Singh recently held talks with battery manufacturers, inviting them to set up manufacturing facilities in India. According to sources close to the development, the government is also looking to forge alliances with other countries for an adequate supply of raw materials needed for lithium-ion batteries.

“(Singh) exhorted the industry to set up battery manufacturing units in India as future demand was going to be very high with the government promoting e-vehicles in a big way,” the ministry stated.

Will Wait Until EV Infrastructure Is In Place In India: Mercedes-Benz

An adequate charging infrastructure is essential before German automotive giant Mercedes-Benz decides to enter the Indian EV space. As per reports, the company is currently evaluating the needs of Indian customers and is reportedly looking at multiple options, including different drivetrains or different body styles.

Commenting on the development, Daimler AG Member of Board of Management Britta Seeger said, “We are aware that India is strongly pushing into e-mobility by 2030. This is now something we have to take into consideration in order to see what could be the right product that fits the Indian market.”

Mercedes-Benz is part of the Daimler Group. “We need to observe to what extent the infrastructure is getting ready especially for E-mobility. And we see in other markets, that’s a key prerequisite in order to enter e-mobility,” Seeger added.

Kia Motors Might Participate In Indian Govt’s EV Tender

South Korea-based Kia Motors, a wholly-owned subsidiary of Hyundai Motor Corp, is planning to participate in the Indian government’s tender for electric vehicles, once its manufacturing unit becomes operational in the Anantapur district of Andhra Pradesh.

As part of its foray into the Indian market with a compact utility vehicle, called SP Concept, the company is aiming to launch an electric powertrain in India by 2021.

Commenting on the development, a company spokesperson said, “Kia Motors has the intent of introducing EVs in India and participate in the bids to supply these vehicles to the Union government as soon as the plant starts production. It will also depend on the kind of direction the government gives regarding specifications of the vehicles and the infrastructure available. Kia has technologies required for electrified vehicles like hybrids, plug-in hybrids and electric vehicles.”

Developments From Around The World

Waymo Teams Up With Jaguar Land Rover

Google parent Alphabet-owned autonomous car company Waymo has joined hands with Jaguar Land Rover (JLR) to develop a luxury, self-driving electric car. The vehicle will be utilised for a ride-hailing service operated by Waymo, reports have claimed.

According to sources close to the development, the duo will be working on a “premium self-driving electric vehicle” based on a new I-PACE model. Equipped with Waymo’s autonomous technology, the car will undergo testing, starting from late 2018.

If things go according to plan, around 20,000 I-PACE units will be manufactured within the first two years. Confirming the development, the Waymo team said, “This is just the beginning. The ultimate goal: with Waymo as the driver, products tailored for every purpose and every trip.”

Electric Vehicles To Get Cheaper Than Fossil Fuel Counterparts By 2025: Report

Electric vehicles might become cheaper than fossil fuel-based cars by 2025, provided the cost of lithium-ion batteries continues to fall, predicts a new report by Bloomberg New Energy Finance.

As per the report, some electric models may cost the same as combustion engine counterparts by 2024, and will likely become cheaper the following year. According to the study, for that to happen, battery pack prices will have to fall.

Over the next few years, the expected increase in the mass production of lithium-ion batteries could bring down the prices to around $70 a kilowatt hour by 2030, the report claims. Elaborating further, Colin McKerracher, Transport Analyst at BNEF said, “Electric vehicle sales will continue to ramp up in the coming years but battery prices still need to decline further for real mass market adoption. If battery material costs keep rising sharply this could push back the crossover point.”

BMW To Wait Until 2020 Before Mass Producing Electric Vehicles

German automotive giant BMW has announced that it will refrain from mass producing electric cars until 2020. The reason behind the move, as per the company’s CEO Harald Krueger, is that the technology is not profitable enough to scale up the production volume.

“We wanted to wait for the fifth generation to be much more cost competitive. We do not want to scale up with the fourth generation. If you want to win the race, you must be the most cost competitive in the segment, otherwise you cannot scale up the volume,” Harald explained.

The electric vehicles (EV) market is expected to record double-digit growth rates with rise in sales volume annually in India till 2020, according to ASSOCHAM-EY joint study.

The study titled ‘Electric mobility in India: Leveraging collaboration and nascency’, further said that despite electric vehicles not being mainstream, stricter emission norms, reducing battery prices and increasing consumer awareness are driving EV adoption in India.

As per the study, at present, electric vehicle industry is at a nascent stage comprising 1% of the total vehicle sales and is dominated by two-wheelers (95%). The study also suggests that EVs will be a stepping stone in designing an intelligent transport infrastructure in India.

In the light of the government’s decision to extend financial support on electric vehicles under FAME II, the industry could receive a major boost and could, in turn, facilitate India’s transition into an all-electric car nation.

Stay tuned for the next edition of our weekly series of Electric Vehicles Roundup!