Electric Vehicles This Week: Honda To Set up EV Battery Plant In India And More

As 2017 draws to an end, the buzz around electric vehicles has reached fever pitch globally. While Honda has announced a partnership with Nissan to develop solid-state battery technology, Tesla is gearing up to build an electric pickup truck after production of Model Y commences. On the other hand, German automaker BMW expects to reach 500K EV sales by 2019.

Coming to some of the developments that took place over the last seven days, Maruti Suzuki is gearing up to conduct a market survey in January, over a period of five to six weeks, in an attempt to understand customers’ expectations when it comes to electric vehicles. Japanese automotive giant Honda is looking to set up a battery manufacturing plant in India.

The Ministry of Heavy Industries has given its approval to the introduction of EV-based public transportation systems in 11 cities across the country. These include Delhi, Mumbai, Ahmedabad, Bengaluru, Jaipur, Lucknow, Hyderabad, Indore, Kolkata, Jammu and Guwahati.

The Karnataka government’s Transport Department is gearing up to launch electric auto rickshaws in Bengaluru. On the other hand, the Government of Andhra Pradesh is looking to attract investments to the tune of $4.6 Bn (INR 30,000 Cr), in a bid to bolster its electric vehicles industry.

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

Going All EV By 2030 Not Viable: Mercedes Benz India MD Roland Folger

Mercedes-Benz India MD and CEO Roland Folger has urged the government “not to rush with the all-EV push” and thus “foreclose better technological options” for future generations as the rest of the world is racing to run on hydrogen and not electricity.

Folger’s response was directed at Minister of State for Power and Renewable Energy Piyush Goyal’s recent statement, “We are going to introduce electric vehicles in a very big way. We are going to make electric vehicles self- sufficient like UJALA. The idea is that by 2030, not a single petrol or diesel car should be sold in the country.”

According to Rolan, the Indian government might have missed two major points, while aiming to go all EV by 2030. Firstly, the plan to go all EV by 2030 is not a viable solution as most of the automobile companies haven’t yet started their EV production in India. Secondly, Roland said that it would foreclose the other options and better technologies that automobile companies are currently looking into.

Maruti Suzuki To Conduct Survey On Electric Vehicles Next Month

Japanese automaker Suzuki’s Indian arm, Maruti Suzuki, is gearing up to conduct a market survey in January, over a period of five to six weeks, in an attempt to understand customers’ expectations when it comes to electric vehicles. As stated by Maruti Suzuki Chairman R. C. Bhargava, the move is in line with the company’s efforts to better understand the expectations of Indian car buyers regarding electric vehicles and charging stations.

He said during a media interaction, “If electric vehicles have to succeed, then it has to be in line with customer expectations. So far, nobody has any idea about what the customers think of electric vehicles. Before making a product, we have to know what the customers are looking for in the segment. When we first launched the Maruti 800 as well, a customer survey was conducted based on which the product was developed.”

Maruti Suzuki is currently working to introduce EVs in India by 2020, in partnership with its parent company Suzuki and Tokyo-headquartered Toyota.

Honda To Likely Set Up EV Battery Plant In India

Another Japanese carmaker Honda has recently announced plans to set up a lithium-ion battery manufacturing facility in India. Honda Cars India, the Indian arm of the Minato-headquartered automotive giant, is currently trying to identify the type of electric vehicles that would be best suited for Indian roads.

As per an earlier announcement by Honda, electric vehicles will account for up to 65% of the company’s overall sales by 2030, with 15% being pure electric and the remaining being hybrid, plug-in hybrid and fuel-cell powered cars.

Honda Cars India Senior Vice President Jnaneswar Sen said, “Recently, on the global front, Honda has tied up with Hitachi for electric motors and we will derive benefits from all those developments. Our India strategy has to align with Honda’s global strategy. We have been working on the electric vehicle strategy for quite some time now.”

Last month, it was reported that Honda was in the process of adopting an EV strategy in line with PM Narendra Modi-led government’s mission to switch to all-electric cars by 2030. In a related news, Honda and Nissan have joined hands to build all solid-state batteries for electric vehicles.

The development comes just a week after BMW inked a JV pact with US-based solid-state rechargeable battery manufacturer Solid Power to develop the next generation of EV batteries.

Govt. Approves Introduction Of Electric Public Transport In 11 Cities

As a major step forward in the government’s mission to switch to all-electric cars by 2030, the Ministry of Heavy Industries has given its approval to the introduction of EV-based public transportation systems in 11 cities across the country. These include Delhi, Mumbai, Ahmedabad, Bengaluru, Jaipur, Lucknow, Hyderabad, Indore, Kolkata, Jammu and Guwahati.

A total of 47 proposals from 44 cities were received by the ministry, requesting nearly 3,144 electric buses, 2,430 electric four-wheeler taxis and as many as 21,545 electric three-wheelers. This translates to around $632.2 Mn (INR 4,054.6 Cr) of financial support from the centre.Given the limited funds under the FAME scheme, however, only 11 cities have been shortlisted at the moment.

The selection was made based on a number of parameters such as population, vehicle density, vehicular pollution, Swachhata Abhiyan ranking, coverage under the government’s Smart City programme as well as the available financial outlay under Phase 1 of the FAME scheme.

The Phase 1 of the FAME scheme was launched in 2015 and is set to expire on March 31, 2018. Under this scheme, the government is looking to introduce a variety of electrically-powered modes of transportation including buses, taxis and auto-rickshaws.

During the press conference, Geete added, “We will accord priority to public transport in FAME II. Our primary objective will be that the country’s public transport should be 100% electric. If the public transport is 100%, then we can reduce pollution to a great extent.”

Electric Autos To Hit Bengaluru Roads Soon

In a bid to lower pollution levels in the city, the Karnataka government’s Transport Department is gearing up to launch electric auto rickshaws in Bengaluru. The move is in line with the Karnataka Electric Vehicle and Energy Storage Policy 2017.

As part of the initiative, the department is looking to develop its own version of electric autos, rather than relying on battery-powered rickshaws that are currently not permitted to operate within the city.

Commenting on the development, Karnataka’s Transport Commissioner B. Dayananda said: “A month ago, we had proposed retrofitted electric auto rickshaws to the government. The government too showed interest in promoting use of electric vehicles. Drivers who wish to opt for retrofitting would be supported by the department and the state. Once we get the required approvals, we’ll kickstart a drive to promote conversion of auto rickshaws into electric mode.”

Andhra Pradesh Looking To Attract $4.6 Bn Investments In Electric Vehicles

The Government of Andhra Pradesh is looking to attract investments to the tune of $4.6 Bn (INR 30,000 Cr), in a bid to bolster its electric vehicles industry. As per reports, the state is planning to offer an array of incentives both to consumers and companies, in the form of capital subsidies to automakers and charging equipment manufacturers.

Speaking about the initiative, the state’s Secretary for Industries and Commerce Solomon Arokiaraj said, “Fast government approvals make it (Andhra Pradesh) ideal for manufacturing. Andhra (Pradesh) aims to emerge as a hub for the electric mobility ecosystem in the country.”

Apart from incentives and subsidies, the state government has also proposed to offer concessions on land and power, in addition to complete state GST reimbursements. According to Solomon, battery manufacturers operating in the state will be able to avail special incentives as well.

Recently, it was reported that German EV startup Magnum Pirex was eyeing to establish a manufacturing base in Andhra Pradesh at an investment of around $15.5 Mn (INR 100 Cr). As per sources, the startup has proposed to supply battery-powered sports cars, family cars and small trucks below the $15,590 (INR 10 Lakh) price range.

In a related development, the Delhi government is likely to incentivise the production and purchase of electric vehicles, as part of its efforts to reduce pollution in the capital city. The announcement was made recently by Delhi Transport Minister Kailash Gahlot.

SMEV Calls For Reduction Of GST On Batteries

The Society of Manufacturers of Electric Vehicles (SMEV) has urged the Indian government to lower GST on lithium-ion batteries, which are currently used to power electric vehicles. At present, batteries carry a 28% goods and services tax, compared to 12% on electric vehicles.

According to SMEV Director of Corporate Affairs Sohinder Gill, the high tax on batteries is one of the main reasons impeding the faster adoption of EVs in the country. He said, “To support the government’s ambitious vision of selling only e-vehicles in the country by 2030, and to help the industry grow at a faster pace, SMEV expects the government to take immediate remedies and proactive measures.”

In other news, the Society of Indian Automobile Manufacturers (SIAM) has put forward the suggestion of reducing GST on electric vehicles to 5%. As part of its recommendations, SIAM has asked the government to offer one-time income tax deduction of 30% on EVs for non-financed buyers, in a bid to expedite the adoption of electric vehicles.

Developments From Around The World

BMW Sets Target Of 500 EV Sales By 2019

German automaker BMW reportedly expects sales of its hybrid and electric cars to more than double within the next two years. As claimed by CEO Harald Krueger, the company’s EV sales will likely touch the 500K mark by the end of 2019.

A couple of weeks back, BMW R&D Chief Klaus Froehlich stated that the company’s EV sales would quite possibly exceed this year’s record of 100K vehicles by a medium double-digit percentage.

So far in 2017, BMW has sold a total of 78,100 plug-in hybrids and electric cars. With the aim of launching 12 different EV models by 2025, the automobile company is currently working to mass produce electric cars within the next three years.

Tesla To Build Electric Pickup Truck After Model Y

After production of Tesla’s crossover all-electric car Model Y commences in 2019, the US-headquartered company will start working on an electric pickup truck, CEO Elon Musk said recently.

He tweeted, “I promise that we will make a pickup truck right after Model Y. Have had the core design/engineering elements in my mind for almost five years. Am dying to build it.”

Last week, United Parcel Services announced that it will be procuring 125 units of Tesla’s all-electric semi-trailer trucks, making it the biggest order made so far. These big rigs are expected to be priced at around $200K each, for a total order of about $25 Mn. A week prior to that, New York-headquartered food, snack and beverage company PepsiCo made headlines for reserving 100 Tesla Semis.

Chinese Government Extends Tax Rebate For Electric, Hybrid Cars

As an added push for the country’s electric vehicles market, the Chinese government has announced that it will extend tax rebates on purchases of new energy vehicles (NEV), including electric and hybrid cars, till 2020.

The Finance Ministry’s tax exemption policy on electric vehicles was set to expire this year. However, as part of the newly-announced extension, prospective buyers of electric vehicles will now be able to avail tax benefits on purchases between January 1, 2018 and December 31, 2020.

As per reports, the Chinese government will offer exemption of up to 10% purchase tax on electric and other renewable energy-powered cars till 2020. Commenting on the development,  Yunshi Wang, Director of the China Center for Energy and Transportation at UC Davis had said earlier, “China wants the number of NEVs to grow, and I’m sure they’ll take many additional steps if they’re not meeting their targets.”

Manufacturing electric vehicles domestically, for instance, comes with the hurdle of high costs. Similarly, the production of batteries is largely an expensive affair. To be able to mitigate these challenges, the Indian government will have to focus its efforts on facilitating technological disruption through incentives and tax exemptions. If successful, the shift to shared, electric and connected mobility could potentially help India save up to $300 Bn (INR 20 Lakh Cr) in oil imports and nearly 1 gigatonne of carbon dioxide emissions by 2030, as per a recent report by FICCI and Rocky Mountain Institute.

Until then, stay tuned for the next edition of our weekly series of Electric Vehicles Roundup!

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