Electric Vehicles This Week: IKEA Set To Add EVs To Indian Customer Delivery Fleet And More

Globally, more than 873K plug-in and electric vehicles were sold in 2016. Of this, China saw the highest number of sales of EVs with approximately 351K units, followed by Europe and USA at 221K units and 157K units respectively. Between January and August of 2017, over 649K units of EVs were sold worldwide.

While the numbers have since increased, for India, the transition to electric vehicles has largely been a slow journey beset with challenges. From lack of sufficient charging infrastructure to high costs of raw materials, local car makers have had to contend with numerous problems, which is why the production of EVs in the country has been growing at a snail’s pace.

One of the biggest challenges, however, has been the lack of clarity on EV policies. Recently, Union Transport Minister Nitin Gadkari made waves when he said, “There is no need for any policy now.” While it managed to grab media headlines, NITI Aayog has now come forward, stating that India needs an EV policy.

In other news, Swedish furniture giant IKEA has announced that around 20% of its customer delivery fleet in its first year of operations in India will be electric vehicles. The company is set to open its first store in Hyderabad in mid 2018.

MG Motor India, a subsidiary of Chinese automaker SAIC Motors, has committed $768 Mn (INR 5,000 Cr) to the Indian market for the coming six years. Part of this investment will also go into developing electric vehicles.

Coming to international developments, German automotive giant BMW is planning to invest more in electric and autonomous cars as it prepares to further increase its profits.

Given that so much has been happening in the country’s electric vehicle sector, we bring to you the 17th edition of the weekly EV roundups.

20% Of IKEA’s Customer Delivery Fleet In India To Be EVs

Swedish furniture, appliances and home accessories company IKEA has announced that around 20% of its customer delivery fleet in its first year of operations in India will be electric vehicles. The company is set to open its first store in Hyderabad in mid-2018.

According to sources close to the development, the percentage is expected to increase to 40% in the second year and 60% in the third year of its presence in the country. To support this move, IKEA aims to create a electric vehicle charging infrastructure at its Hyderabad store as well.

IKEA also plans to hire at least 50% women for its Indian workforce by 2025. Speaking on the matter, Derya Völlings, Sustainability Matrix Manager for the Asia Pacific Retail Region said, “Globally, 54% of our workforce are women, and 43% of that are female managers. So it’s quite exciting because it’s not just on a co-worker level but also on a manager level we’ve achieved quite an equal workforce.”

SAIC’s MG Motor India To Invest Lump Sum On EVs

MG Motor India, a subsidiary of Chinese automaker SAIC Motors, has committed $768 Mn (INR 5,000 Cr) to the Indian market for the coming six years. So far, it has already invested up to $307.1 Mn (INR 2,000 Cr).-While the company is preparing to launch its first product by mid-2019, it also aims to foray into the electric vehicle market in India, reports state.

Speaking on MG Motor’s EV plans, Executive Director P Balendran said, “The company is waiting for a strong electric vehicle policy and needs a proper charging infrastructure.”

Commenting on the development, the company said in a press release, “Led by strong R&D efforts of its parent company SAIC, MG Motor India is also actively considering offering new energy vehicles and is keenly looking to work with all stakeholders involved to implement the technology commercially.”

India Not Fully Prepared For Electric Vehicles: Volkswagen

With India’s electric vehicle policy in jeopardy, German automobile manufacturer Volkswagen has said that India is not fully prepared to switch to 10)% EVs. Despite the government’s continued efforts, the adoption of electric vehicles in the country has been quite low, in comparison to nations like China, the US and Norway, among others.

Speaking to the media, Volkswagen India President and MD Andreas Lauermann said, “I believe it was a good step from the government to put it (EVs) on the agenda. It is absolutely necessary for India. But we all know that India is a not really prepared for a such a step at the moment. Also in terms of technology, India should be clear what kind of technology it wants.”

Last week, the company announced that about 16 locations across the globe will act as production sites of the company’s battery-powered vehicles by 2022. This was in line with the company’s aim to massively increase its production capacity in the EV segment.

However, with regards to its EV plans for India, Lauermann added, “When we look at our EVs at the moment with the technology, it is a little bit too early there (in India). There is no plan visible for the future development in term of technologies.”

India Needs An EV Policy: NITI Aayog Vice Chairman

After Union Transport Minister Nitin Gadkari made waves last month when he said, “there is no need for any policy now”, government-run think tank NITI Aayog seems to have taken a U-turn, stating that there needs to be a policy to promote the adoption of electric vehicles in India.

Speaking on the matter, NITI Aayog Vice Chairman Rajiv Kumar said that India cannot depend entirely on the market or the ministries to deliver a transportation model for the future. He added, “We need a policy to put in all together (charging infrastructure, battery swapping) and we can’t just have people running around on their own and ministries working in silos.”

“I think Niti Aayog will be well-placed to develop this policy, and I hope that will be the task we will fulfil going forward. There has been a lot of work in the government, cabinet note has been prepared.  We are close to identifying principal driver of this policy. The government can be a big aggregator of electric vehicle demand. I think municipality and state governments should also encourage electric vehicles,” he went on to state.

EV Adoption In India Possible Only With Practical Strategy

In a related development, a report by research organisation A T Kearney Energy Transition Institute has suggested that the Indian government and the indigenous industry must have a practical strategy in place to ensure that the growth of the country’s EV sector is maintained.

While there has been a lot of talks about the potential of EVs in India, local car makers are facing major challenges in securing raw materials for battery production, the report further stated.

“Governments, mining companies, battery producers and carmakers need strategies for an industrial and technological energy transition to reduce CO2 emissions, based on solutions that are practical, safe and economically viable,” said Richard Forrest, Chairman of A T Kearney Energy Transition Institute.

Speaking about the problems specific to India, Abhishek Poddar, Partner, Energy and Process Industries at A T Kearney India said, “It is critical that India takes into account the practical aspects related to EV rollout, as it defines its long-term strategy for the sector. The problem is further complicated by the fact that we have limited availability of the natural resources required for LIB battery manufacturing.”

“Government of India is cognizant of these issues. In the latest automotive policy, it has focused on overall pollution reduction through multiple technologies and regulations by implementing stiff targets, and by not demanding 100 % switch to EV by 2030,” Vinod Kumar, Partner, Automotive Transport and Infrastructure with A T Kearney India further averred.

Developments From Around The World

BMW To Invest More In Electric, Autonomous Cars

German automotive giant BMW is planning to invest more in electric and autonomous cars as it prepares to further increase its profits. During an annual media interaction, the company’s CFO Nicolas Peter said that the group’s profit before taxes is expected to be “at least in line” with 2017’s $13.1 Bn.

Additionally, Peter stated that BMW will be allocating “an increasing amount” to R&D activities as it moves towards more futuristic mobility solutions like electric vehicles and self-driving cars.

The company had earlier inked a partnership deal with US-based solid state rechargeable battery manufacturer, Solid Power. The collaboration, sources revealed at the time, is geared towards building the next generation of EV batteries.

The electric vehicles (EV) market is expected to record double-digit growth rates with the 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 NITI Aayog’s push for a concrete policy on electric vehicles, the industry could receive a major boost, especially if the government decides to offer the right infrastructural and financial support needed to make India an all-electric car nation.

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