In pursuit of all-electric vehicles in less than a decade & a half, the state-owned Energy Efficiency Services Limited (EESL) tasked with fast-tracking the electric agenda, floated world’s largest single tender of 10,000 electric cars procurement supposed to be used by the federal government in about four years. Home-grown auto majors Tata Motors, who hasn’t sold even a single electric car so far, and Mahindra & Mahindra (M&M) are the only two companies selected by EESL to supply 500 electric cars in the first phase at a cost of INR 10.16 lakhs exclusive of GST per vehicle. Remaining 9500 cars will be procured after the completion of the first Phase.
M&M who has been the only manufacturer of electric vehicles in the country for past five years stated a potential loss of INR 200,000/vehicle amounting towards a total of INR 30 million against supplying 150 e-Veritos. A very first concrete step towards India’s mission of “All Electric by 2030”, EESL tender has sparked an intense race to bring down the cost, while Tata Motors trying to build their market entry strategy by utilizing the opportunity & M&M indicating losses in their EV business.
India Leaps Ahead – Transformative Mobility Solutions for All, a report released by India’s think tank “NITI AAYOG” earlier this year, laid down India’s roadmap towards 100% electric vehicles by 2030. The report emphasises three key elements viz. Shared, Electric & Connected which will most likely form the basis of green car policy in times to come. Interalia, the report also clearly signifies the importance of “Integrative Approach” towards “Scaled Manufacturing”.
Although it is still in its infancy in India, electric mobility will potentially be more important going forward than any other markets and it demands auto manufactures to be in it to win it. So far xEVs are expensive primarily due to the high cost of batteries which even today contributes as high as 45-50% of total medium battery electric vehicle cost (BEVs). In last few years battery prices have fallen much rapidly than expected with ~73-75% drop since 2010 and so is their contribution expected to reach <20% of the overall BEV cost, much lower from that of today thus making it cheaper than internal combustion engine (ICE) vehicle sooner than expected.
A Megatrend, Never Seen Before
China’s xEV market, the world’s largest market, is poised to replicate the same in the manufacturing of Lithium Ion batteries as well and is expected to capture 62% of global production by 2020. Globally, Tesla Motors gigafactory, later rechristened as “GIGAFACTORY 1” has ignited a megatrend which battery industry has never seen before. It has initiated a global race for shifting the battery price curve much ahead of its time while driving economies of scale with India, however has not even a blip on the global batteries production map in most of the projections.