ELECTRIC VEHICLES-

Prospects for India

Operations Management
Prof. Promod Shetty

Presented by:
AnimeshBohidar (7)
Anshul Kanodia(17)
Keyur Dhagia(27)
Sufiyan Momin(37)
Hussain Rokadia(47)
SunipaDas(57)

Electric Vehicles - Prospects for India Page 1

Contents
Sr. Topic Page No.
No
.
1 Introduction 3
2 What are EVs? 3
3 Introduction of EVs 4
4 Global Scenario and Forecasts 10
5 SWOT and PESTEL analysis of EV market in India 11
6 Policy of EV in INDIA 13
7 Advantages and Disadvantages for EV in Indian market 16
8 Case Study: Anther Energy 18
9 Case Study: Mahindra Reva 21
10 Case Study: Tesla 23
11 References 25

Electric Vehicles - Prospects for India Page 2

Introduction
With the ever-increasing threat of climate change and environmental consciousness, the Government
of India is supporting the initiatives for sustainable development and eco-friendly mobility
competencies like Electric Vehicles. To balance out the disadvantages of EVs regarding weight and
charging times, it is important for policy-makers and other stake holders to understand the major
social and economic policy drivers for EV adoption. With firms like General Motors, Tesla, etc.
pioneering the EV technology, it is vital for India to study and understand the niche market
requirements to move to a more sustainable and green commute option. With the growing
population and development of standard of living, it is most significant for India to develop its market
and drive the change towards green agendas. This will initially require an incentive to the market
players to perform research and develop customized solutions and then incentivize the consumer for
vehicle adoption. Although, BS VI has been a mandate by 2020 for all automobile players, EVs will
require a much intricate and incentivized implementation plan.

In the year 2008, petroleum prices spiked over 140 USD per barrel which gave a major push to the EV
industry with Nissan General Motors announcing their intentions to mass produce their EVs, namely
‘Leaf’ and ‘Volt’. Between 2010 and 2014, total EV purchase orders crossed 5,00,000 units worldwide,
with less than a fraction percentage of orders from the Indian subcontinent.

What are Electric Vehicles?

Also known as ‘Plug-in vehicles’, the first EV was driven in the late 1880s, however it lost the race to
gasoline powered vehicles very quickly. With the drawbacks of weight and charging time, there was
little incentive for automobile players to further the technology. The price rise and shortage of
petroleum has advanced the technology in the 21 st century. And with ever-growing environmental
consciousness, EVs are the most sought after technology.

Electric Vehicles, either partially or completely, run of electricity. ‘Plug-in hybrids’ offer a dual option
of petrol/diesel vehicle with an electric engine that runs on a battery that can be recharged. Other EVs
omit the petroleum based fuels completely and run on a battery powered by rechargeable batteries
or fuel cells. Another niche EV runs by converting hydrogen gas into electricity to charge the battery.

For completed electric EVs, depending upon the source of recharge, the green-house gas emissions
differ. When charged through a clean grid line, the emissions from EVs can be compared to that of a
conventional vehicle running over 55 KM per litre of petrol/diesel. When charged through a
renewable source like solar or wind energy, the vehicle is completely emissions free.

To incentivize the vehicle adoption, there is a need for governmental and operational incentives to
offset the price difference being comparatively much higher to that of its conventional counterparts.
The vehicle adoption will also require public information and training, for instance, recharging an EV
can cost a fraction of the cost of petrol/diesel and reduce the overall cost of ownership for users and
at the same time save an exponential amount of outlay on part of the consumers.

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 Introduction Of EVs in India
Electric Vehicles (EVs) as an element of transportation policy is being considered by most of the
countries in the world. However, these countries’ transformation of communication facilities from
petrol cars to EVs are affected by their stage of economic development, availability of energy
resources, technological capabilities and political policy structure.

The rapid growth in India’s urbanization, population and wealth over the last few decades has
completely turned the mobility service scenario. India’s transport demand has grown by almost 8
times since 1980 – more than any other Asian economy(World Bank data, cited by NITI Aayog). Along
with this widespread development of the auto industry in the country, it lead to the requirement of
addressing climate issues on a priority basis as development have revealed the extent of irreversible
damage created on the environment.

Need for EVs in India

▪ Demand for improved communication or travel infrastructure have risen gradually due to fast paced
urbanization.

▪ India’s responsibility to put a control on the burning issue of climate change (Intended Nationally

Determined Contribution goal to achieve reduction in emission by 35% within 2030 as compared to
2005 level and to achieve about 40% cumulative electric power installed capacity from non-fossil
fuel based energy resources by 2030) has made the introduction of alternative fuels and
implementation of a plan bringing more EVs working on road for environmental sustainability.

▪ Advances in battery technology have led to higher energy densities, faster charging and reduced
battery degradation from charging. Combined with the development of motors with higher rating
and reliability, these improvements in battery chemistry have reduced costs and improved the
performance and efficiency of electric vehicles.

▪ The changing geopolitical conditions in the international scenario require India to secure its energy
resources by moving towards alternative energy sources and not by spending high on importing oil.

▪ In India, transport system includes vehicles like autorickshaw and feeder buses for small distance
connectivity which gravely suffer from capacity constraint. Since these vehicles ply on the road in
large numbers, so these should be efficiently managed and transformed into e-vehicles.

Thus the demand for implementation of EVs on the roads of INDIA has emerged from the intention of
addressing the burning demand for ways of efficient communication also controlling the
environmental pollution at the same time. The penetration of the EV industry services into the market
is has not yet reached the expectation although the Government’s is willing to bring a transformation
in the country’s communication services. The reasons behind this lower market penetration of the EV
industry are varied in a diverse country like India.

Challenges faced in Indian Market

Factors thwarting the growth of EV industry in Indian markets:

1. EV production faces unstable policy structure: The capital cost remaining high, uncertainty in
achieving calculated profits and the lack of stability in policies related to EV production hugely
discourages investment in the industry.

For eg, the launch of FAME(Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles)
framework has been postponed and extended repeatedly.

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2. Charging infrastructure and lack of support: The charging infrastructure for EVs in INDIA has not
developed completely as per the requirement. Initiatives to set up community charging stations came
up. There have been plans to set up solar powered charging station in pre-existing fuel stations for
easier access and increasing the acceptance. Setting up of level 2(public level) charging infrastructure
would face heavy challenges. Lack of support would lead to construction of 90% of the charging
station having slow charging infrastructure which take 6 to 8 hrs to charge, while the other 10% would
be consisting of fast DC charging. Thus, the policy uncertainty and unavailability of firm support is
affecting the development of associated infrastructural support for the industry.

3. Cost of EVs: The cost for acquiring a CV stands high or out of reach for a large section of the middle-
class society who owns a disel car. This EVs buying cost soars high due to the high-priced Li-ion cells.
The imported battery cost around $275/KWh in India. Most EVs are priced between 6-8 lakhs does
not provide any competitive advantage over the other cars available within that range.

4. Domestic factors: The production and implementation of considerable amount of EVs plying on roads
of India will be highly affected by domestic factor like availability of basic raw materials within the
state. India not having reserve of lithium and cobalt, is dependent on countries like Japan and China
for the import of lithium-ion batteries. Such imports will be affected by conditions of global
economical frame.

5. Lack of skilled service providers: EVs require higher levels of skills for servicing so leads to higher
service costs and charges. This will require deploying highly trained personnel in EV service centers.
India also lacks the dedicated training courses for development of related skill.

Move towards EVs

First Automotive Mission Plan 2006-2016

“Automotive Mission Plan 2006-2016” (AMP 2006-2016) was launched by Government in January
2007. The Vision of the Mission Plan was to make India “emerge as the destination of choice in the
world for design and manufacture of automobiles and auto components with output reaching a level
of US$ 145 billion accounting for more than 10% of the GDP and providing additional employment to
25 million people by 2016”.

At the beginning, seven major targets were set which included total
turnover, employment generation, contribution in GDP, PV, production CV production, three-wheeler
production and two-wheeler production.

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Total Turnover
In 2006, the turnover of Indian automobile industry’s turnover was around the $28 billion, which
roughly translated to Rs 1.23 lakh crore. The AMP 2006-2016 had targeted to reach a turnover of Rs.
5,61,200 crore to Rs. 7,31,400 crore.
After the 10 years, it breached the base target and clocking Rs 6,01,000 crore in FY2016.

Employment
AMP 2006-2016 had set a target of employment 35 million people in the automotive industry,
including direct and indirect jobs, by 2016. However, the industry could reach only 32 million jobs.

Percent Share of GDP

Contribution of the automotive industry to the overall Indian GDP had only crossed 7.2 percent, as
opposed to 10 percent targeted in AMP 2016

The overall performance can be seen in the following table:

Total combined production in the ten years from 2006 to 2016 was 142 million, as against the set
target of 192 million.

The Automotive Mission Plan 2006-16 was a huge push towards making India the global hub for
quality auto components and small cars.

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MNRE Incentive
The Ministry of New and Renewable Energy (MNRE) introduced a Rs 95 crore subsidy scheme to
provide incentives to electric vehicle buyers which was later withdrawn in March 2012 to be
introduced as NEMMP 2012 but no incentives were given until FAME was introduced.

National Electric Mobility Mission Plan (NEMMP) 2020

National Electric Mobility Plan (NEMMP) 2020 was launched in 2012 with a target to deploy 5 to
7million electric vehicles by 2020 in the country.

NEMMP also targets 400,000 passenger battery electric cars (BEVs) and thereby avoiding 120 million
oil barrels and 4million tons of CO2. Rs. 20,000 – 23,000Crores (approx. 3 billion USD)will be required
as total investment.

The Government would use the followingpolicies/mechanisms to increase the electric vehicles usage
in India under this mission -

• Permissive legislations: Legislations to allow usage of electric vehicles in various areas, if not already
allowed

• Operational regulations: Use of legislation framework and regulations aimed at setting safety
regulations, emission regulations, vehicle performance standards, charging infrastructure standards,
etc.

• Fiscal policy measures: Trade related policies for shaping the market,imports and exports

• Manufacturing policies aimed at encouraging investments

• Specific policies aimed at incentivizing manufacturing and early adoptionof electric vehicles through
demand creation initiatives

• Schemes and pilot projects for facilitating infrastructure creation

• Policy for facilitating research & development

Apart from launching this plan and conducting few pilot projects, nothing muchwas done on ground in
terms of implementation of this policy till 2015 whenthe new government launched the FAME
program

FAME
Faster Adoption and Manufacturing of Hybrid and Electric vehicles was launched in April 2015 to fast
track the goals of NEMMP 2020 plan

• In order to promote the sale of electric vehicles in the Indian market, the government launched
FAME scheme (Faster Adoption and Manufacturing of Hybrid and Electric vehicles)in India, as a part of
the National Electric Mobility Mission Plan 2020, under which, thegovernment would provide certain
incentives to lower the purchasing cost of electricvehicles

• The scheme has 4 focus areas i.e. Technology Development, Demand Creation, PilotProjects and
Charging Infrastructure.

• Overall, the government is expected to spend around Rs. 14,000 Crores for this scheme,which
includes incentives to the customers for purchasing electric vehicles, incentives to themanufacturers
for research and development besides developing the charginginfrastructure

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• During the financial Year 2015-16, an amount of Rs. 75 Crores was allocated for this scheme, which
was almost fully utilised. In the last financial year (2016-17), Rs. 91 Crores(approx.) has been utilised
out of the budget allocation of Rs. 122.90 Crores

• Under phase 1 of this scheme, support was extended to buyers during the fiscal years2015-16 (Rs.
260 Crores) and 2016-17 (Rs. Rs 535 Crores). Further incentives would be provided depending upon
the success of phase 1

• Incentives of about Rs. 33 to 66 Lakhs are planned for each electric bus which typically costs around
Rs. 1-2 Crores (imported buses) and around Rs. 50-80 Lakhs (domestically manufactured)

• Under the JNNURM (Jawaharlal Nehru National Urban Renewal Mission), NEMMP (NationalElectric
Mobility Mission Plan) and Smart city plans launched by the government, variousstate and local
transport bodies are expected to purchase electric buses over the next 5years

In 2017, the Government of India through extensive ministerial discussions came out with a major
policy document in terms of “Transformative Mobility For All”

• The NEMMP 2020 was extensively handled by Department of Heavy Industries till 2016. An inter-
ministerial discussion on this took place including the Prime Minister's Office, NitiAyog (Planning
Body), Department of Heavy Industries, Power Ministry, Ministry of Surface Transport & Roads, Urban
Development Ministry, Petroleum and the Finance Ministry. From this emerged, a need to look at
transforming the mobility in the country and reduce the dependence on fossil fuels and reduce
imports obligations. One of the key pillars of this transformative mobility is the emergence of EVs and
the EV infrastructure that is likely to be needed. Post this discussion, the NitiAyog has come out with a
report on the plans for the Government on Transformative Mobility Solutions for All.

• Under the GST regime, EVs were kept at the 12% tax levels until recently , while hybrids fell at the
43%levels (luxury products) - this has led to inconvenience in the auto industry where major players
have been focusing on hybrids. There are now representations to give more weightage to Hybrids as
well and decrease GST on Hybrids.

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NiTiAYAOG
• Systems integration: To enable wide-scale adoption of mobility solutions through ubiquitous
availability and sharing of interoperable transport data (ITD).

• Scaled manufacturing: To facilitate market creation through policies and mechanisms that enable
manufacturing of electric vehicles (EVs) and necessary components in successive segments based on
their readiness in the market.

• Shared infrastructure development: Better urban design, where a major fraction of mobility demand
is fulfilled by non-motorized transit and public transit, and better access to vehicle-charging
infrastructure enables higher penetration of EVs.

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Global Scenario and Forecasts
Every country has focus on making policy driven decisions for development of electric vehicle. This
includes the entire supply chain of infrastructure, energy use, reduction in carbon dioxide, capital
investment cast and raw materials for battery.

Highlights
 Electric mobility is expanding rapidly with doubling number of electric vehicle sales from
2017 to 2018 with number exceeding 5.1 million. The People’s Republic of China remains the
world’s largest electric car market, followed by Europe and the United States. Norway is the
global leader in terms of electric car market share.
 Policies that has focused on electric vehicles by giving incentives on low-no emission vehicles
have played a critical role in bridging the cost gap between electric and conventional
vehicles.
 Substantial cost cuts have been achieved by technological advances. Main factors are
research in battery technology, redesigning electric vehicle manufacturing platforms and
application of required infrastructures.
 Private sector response to public policy signals confirms the escalating momentum for
electrification of transport. Recent announcements by vehicle manufacturers are ambitious
regarding intentions to electrify the car and bus markets. Battery manufacturing is also
undergoing important transitions, including major investments to expand production.
Utilities, charging point operators, charging hardware manufacturers and other power sector
stakeholders are also boosting investment in charging infrastructure.

Global Electric Vehicle Outlook 2019

Electric mobility:
 The New Policies Scenario aims at EV30@30, which pledges of the Electric Vehicle
Initiative’s EV30@30 Campaign to reach a 30% market share for EVs in all modes except
two-wheelers by 2030.
 In the New Policy by 2030, the target for EV sales is estimated to reach 23 million and
the stock to exceed 130 million vehicles (excluding two/three-wheelers). In the
EV30@30 Scenario, the sales and stock of Electric Vehicle is expected to double by 2030:
sales reach 43 million and the stock numbering more than 250 million.
 China maintains is leading 57% share of the Electric Vehicle market in 2030 (28%
excluding two/three-wheelers), followed by Europe (26%) and Japan (21%).
 In the EV30@30 Scenario, EVs account for 70% of all vehicle sales in 2030 (42% excluding
two/three-wheelers) in China. Almost half of all vehicles sold in 2030 in Europe will be
Electric Vehicles mainly on the account of highest tax rates for fossil fuels.
 The projection of market share of Electric Vehicles in 2030 in Japan is 37%, over 30% in
Canada and the United States, 29% in India, and 22% in aggregate of all other countries.
 With such high projections in the sale of Electric Vehicles the expansion of battery
manufacturing capacity will be mainly driven by the electrification in the car market
along with technology innovation in automotive battery packs.

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SWOT Analysis on EVs in India
STRENGTHS WEAKNESSES
1.Low running cost(maintenance, recharging) 1.High initial cost of buying (approx.
2.Environment friendly. 30% more than other cars.
3.No emission of carcinogenic substances, 2. Limited designs and range.
carbon output. 3.Significantly high recharging time in
4.Charging is done at night generally when in comparison to refuelling.
electricity generation expense is least. 4.Low revenue and profits due to low sales
5.Using manufacturing facilities of due to low communication of advantages.
existing conventional cars. 5.One full tank gives approx. 900kms while
full-charged battery gives 150 kms in EVs.

THREATS OPPORTUNITIES
1.Lack of charging station in good numbers. 1.Increasing gasoline prices.

2.Few manufacturing facilities, lack of infras- 2.Opportunities for large scale

Tructure, high import costs. employment.

3.Low competition hence low variety. 3.Improvise Govt. schemes and policies to

4.Constant electric supply in India. strengthen infrastructure and new launches.

5.Unavailability of skilled labour. 4.Opportunity for research and

development.

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Policy on Electric Vehicles in India
Being on the verge of transition from a developing country to a developed country, India is targeting
GDP growth rate of around 7.2% in the upcoming five years. This will therefore result in increased
consumption of oil products. One of the biggest consumers of oil and oil products is the transport
sector, and with increase in consumption and import dependency will lead to increase in GHG
emission and will also have a substantial impact on the energy security scenario in the country.

These factors therefore make it necessary for the transformation of transport sector from oil-based
system to a more environment friendly electricity based system. With this in consideration, National
Electric Mobility Mission Plan (NEMMP) 2020 was launched by Government of India with a vision of
introducing around 6-7 million hybrid/electric vehicles in India by the year 2020. Within NEMMP, a
scheme called Faster Adoption and Manufacturing of Electric Vehicles (FAME) India was introduced in
2015 with an objective to enhance and support market development and manufacturing eco-system.
FAME was extended in the form of FAME-II in 2019 with a total outlay of 100 Billion rupees.

The current Government in India is firmly disposed towards bringing in a low / reduced carbon
footprint in India’s mobility scenario by 2030 – and EVs seem to be pivotal to these plans. As of now,
there is no formal Policy announcement / notification on EVs but the NitiAyog is mandated to come
out with an EV policy now and it will be implemented by multiple Ministries.

Political structure overview for EV Policy planning

After Prime Minister's Office introduced NITI Ayog which mandated to set out the Transformative
Mobility Mission for India. Under this various departments were involved - Ministry of Heavy
Industries& Public Enterprises(Department for Heavy Industries), Ministry of Power &Renewable
Energy, Ministry of Urban Development, Ministry of Finance, Ministry of Roads &National Highways,
Department of Science &Technology.

Department forHeavy Industries (DHI)was earlier the sole ministry dealing with the Auto Industry and
its policies. DHI had set out the earlier FAME policy for EVs in India.

Ministry of Power &Renewable Energy has now been bought into the mainstream by NITI Ayog for
EVs and is one of the key drivers for the EV push in India via their various PSUs like NTPC, POSOCO and
EESL.

Ministry of Urban Development has been involved by NITI Ayog to develop programs on City level to
include EVs and EV infrastructures in the Smart Cities program.

Ministry of Finance is the key ministry being involved for funding various initiatives by NITI Ayog in the
Transformative Mobility Mission for India.

Ministry of Roads &National Highways has been involved by NITI Ayog to frame policies and
incentives for EVs pertaining to lane access, parking infrastructure, etc.

Department of Science &Technology has been involved by NITI Ayog to set out specifications for
various aspects pertaining to EVs and their charging.

In India, the focus will be on getting the public transport fleet onto the electrification journey before
focusing on private vehicles. Priority will be given in the order of electric buses, 3 wheelers, fleet cars,
2 wheelers and then private cars.

To push this philosophy into action, the Central Government has started some key initiatives such as:

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  DHI has come out with a scheme to assist all 1Mn+ populated cities to buy Electric Buses
with an subsidy support of INR 1.05 billion per city and INR 150 million for Charging
infrastructure)
 EESL, a Power Ministry PSU, having expertise in large aggregated procurements, has come
out with a tender of 10,000 electric cars and about 4000 chargers and is on the verge of
getting the first 500 e-cars delivered – these cars will be used by Government PSU’s &
ministries to meet their fleet cabs requirement
 FAME scheme for 2W’s is a huge boost for the industry. Around 15-16 Indian firms operate in
the 2W electric scooters and bikes segment– this is estimated to grow quickly

Comparison of Electric Vehicle Policies in Various States in India

Eight Indian states namely, Andhra Pradesh, Delhi, Karnataka, Kerala, Maharashtra, Telangana,
Uttarakhand and Uttar Pradesh have issued their individual draft/final electric vehicle policies till
June2019 focusing mainly on manufacturing and deployment of electric vehicles in their respective
states. Twelve State Electricity Regulatory Commissions (SERCs) have also issued tariffs for EV
charging. These are Andhra Pradesh, Chhattisgarh, Delhi, Gujarat, Haryana, Jharkhand, Karnataka,
Madhya Pradesh, Maharashtra, Punjab, Telangana and Uttar Pradesh. The Joint Electricity Regulatory
Commission for Union Territories also issued electricity tariff for EVs in Chandigarh.

For the comparison between the EV policies, four main parameters can be considered: Objectives,
Incentives, Targets and Other Significant Features envisaged in the policies of each of these eight
states.

State EV Policies
Although a national mission on e-mobility has been launched, India has yet to issue a national level EV
policy. But eight states such as Andhra Pradesh, Delhi, Karnataka, Kerala, Maharashtra, Telangana,
Uttarakhand and Uttar Pradesh have designed individual state level EV policies to cater to their
respective requirements based on available resources. The state of Karnataka was the first in India to
release an EV policy titled “Karnataka Electric Vehicle and Energy Storage Policy” in September, 2017.

Government of Kerala, was the last in this list that issued their final version of the EV policy in
June,2019.Karnataka, Telangana, Uttar Pradesh, Andhra Pradesh, Kerala and Delhi have set clear
targets in terms of number of EVs and charging stations/battery swapping stations deployment during
the policy period. Karnataka has committed to 100% e-mobility for most vehicle segments in the city
of Bangalore by 2030. Telangana has set the ambitious goal of 100% EV migration by 2030. Uttar
Pradesh has decided to adopt hybrid EVs (HEV) during the transition phase up to 2022. Andhra
Pradesh has included hydrogen powered vehicles with fuel cells and other alternate fuels as part of its
e-mobility plan. Kerala has included electric ferries to be deployed as part of its e-mobility goals.
Similarly, Delhi has focused on making 25% of all new vehicle registrations by 2023 to be EVs. Primary
focus in most states is on public transport, followed by government vehicles and private transport and
then goods transport vehicles. In terms of charging station and battery swapping station deployment,
most of the states have promised to encourage charging infrastructure along highways, government
offices, shopping complexes, malls, parking spaces etc. Karnataka and Uttar Pradesh have proposed to
build5000 MWh and 2000 MWh battery manufacturing/assembling capacity during the policy
period.Hydrogen powered fuel cells and solar powered cells manufacturing are included in Uttar
Pradesh’starget. Maharashtra has stated its intent to invest INR 250 billion in EV and its
componentsmanufacturing/assembling.The states have also listed a range of supply-side and
demand-side incentives such as capital subsidies,incentive subsidies, registration charge exemptions,
interest-free loans, free parking, toll exemptions,electricity duty exemptions, etc. to EV buyers, EV
and component manufactures/assemblers and EVcharging station owners. Telangana will provide
government land in Hyderabad on long-term lease atsubsidised interest and two years moratorium
period for setting up charging/battery swapping stations. Telangana will also allow private companies

Electric Vehicles - Prospects for India Page 14

to utilise corporate social responsibility (CSR)funds for company buses for employee commute.
Maharashtra has allowed petrol pumps to install charging infrastructure, subject to safety regulations.
Uttarakhand has however added a caveat to their policy – 70% of staff in the EV enterprise must be
from Uttarakhand for the enterprise to avail policy incentives. Many states have placed importance
for “Ease of Doing Business” in their state policies e.g. Karnataka Udyog Mitra for expediting clearance
processes. Telangana, Uttar Pradesh, Andhra Pradesh and Maharashtra have put forward the idea of
creating EV manufacturing hubs, clusters or EV automotive parks. Incentives for research and
development and training have also been incorporated in the EV policies in some states to ensure
improvement in indigenous EV technology and capacity building. Telangana has also added an exit
strategy mechanism to its policy that would be developed by the state government and the central
government to facilitate EV enterprises within the state to extricate themselves if the situation arises.
Telangana has also put forward the idea of listing the EV industry as a ‘public utility’ within the state,
which would help to prevent flash strikes. Delhi and Andhra Pradesh have also mentioned measures
for battery recycling, battery reusing and end-of-life battery usage.

Electricity Tariffs for Electric Vehicle Charging in Various States in India

In 2017, Delhi was the first state to introduce a separate electricity tariff category for EVs in India. The
EV tariff issued was Rs. 6-7/kWh, which was at par with the higher domestic slab category. Andhra
Pradesh was the next state to follow, proposing a power tariff of INR 6.95/kWh for EVs as part of their
Annual Revenue Requirement for the FY 2018-19. As of July, 2019, twelve states and one union
territory have issued electricity tariffs for EV charging in India.

While Delhi, Punjab, Andhra Pradesh, Uttar Pradesh, Telangana, Chhattisgarh and Madhya Pradesh
have refrained from adding fixed charges component to their EV tariffs, Maharashtra, Jharkhand,
Haryana, Karnataka, Gujarat and Chandigarh have kept fixed capacity charges. Delhi, Maharashtra,
Uttarand, Telangana have applied “Time-of-Day” (ToD) rebate/surcharge as part of their EV tariffs as a
means to influence EV charging behaviour.

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Advantages and Disadvantages of
EVs
ADVANTAGES
1. No Oil required: Electric cars are entirely charged by the electricity and do not require oil for their
functioning. With increasing fuel prices engine based cars can be expensive to drive as compared to
electricity driven cars.

2. Savings: Charging of EVs can be done for very cheap prices, and many new cars will offer great
incentives from the government for going green. 

3. No Emissions: EVs are 100 percent eco-friendly as they run on electrically powered engines. They
do not emit toxic gases or smoke in the environment and run on clean energy source.

4. Safe to Drive: Electric cars undergo same fitness and testing procedures test as other fuel powered
cars. In case an accident occurs, airbags will be opened up and electricity supply will be cut from
battery. This can prevent the passengers in the car from serious injuries.

6. Cost Effective: Earlier, owning an EV would cost a lot. But with more technological advancements,
both maintenance and cost have depreciated. The mass production of batteries and tax
incentives available have further decreased the cost, thus, making EVs much more cost effective.

7. Low Maintenance: EVs run on electrically powered engines and hence there is no need to lubricate
the engines. Therefore, the maintenance cost of these cars has decreased obviating the need to send
it to service stations often as compared to a normal oil powered car.

8. Reduced Noise Pollution: Electric cars can reduce noise pollution substantially as they generate

lower noise. Electric motors are capable of providing smooth drive over longer distances with higher
acceleration.

DISADVANTAGES
1. Recharge Points: Stations for refuelling or recharging EVs are still in the development stages.
Electric fuelling stations are available in scarcity, and will not be available in less popular places.

2. Electricity cost: Electric cars can also impact consumer's energy bill if options are not considered
carefully . Sometimes electric cars require a huge charge in order to function properly – which may
reflect poorly on electricity bill each month.

3. Short Driving Range and Speed: EVs are limited by their speed and range. Most of these cars have
range around 50 to 100 miles and need to be recharged again. They cannot used for long journeys as
of now, although improvement is expected in future.

4. Longer Recharge Time: While it takes couple of minutes to fuel a standard oil powered car, an EV
takes about 4 to 6 hours to be charged completely. Therefore, dedicated power stations are required
as the time taken to recharge them is comparatively long.

5. Silence as Disadvantage: Silence can be disadvantageous and can lead to accidents in some cases
when the vehicle may go unnoticed based on the low noise they make.

6. Battery Replacement: Depending on the usage and type of battery, batteries of almost all EVs are
required to be changed every 3 to 10 years.

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8. Not Suitable for Cities Facing Shortage of Power: As EVs need power for running, cities already
facing immense power shortages are not suitable for EVs. The consumption of additional power will
hamper their daily power requirements.

9. Some governments do not provide incentives and other money saving initiatives to encourage
consumers to buy EVs.

10. Some base models of EVs are still very expensive due to how new they are and the technology it
required to develop them.

Electric Vehicles - Prospects for India Page 17

Case Study: Ather Energy
Introduction
Ather Energy Pvt. Ltd. designs, manufactures, and markets smart electric scooters and charging
infrastructure. Ather is headquartered in Bengaluru, India. India’s electric scooter market is still in its
infancy. However, as pollution levels in cities rise, Recently India’s government is starting to push the
use of e-scooters. But the biggest problem is that vehicles which run on electricity are not as powerful
as that on petrol.Ather Energy is transforming the industry by spearheading the adoption of e-
scooters in India with its release of the most powerful smart scooter in the Indian market.
Its scooters sport:-
 high-storage battery density
 a dashboard for navigation information
 75 km of mileage
 take less than three hours to fully charge

Reasons for selecting the case study

 Innovative use of technology
 Ease of charging- Ather Grid
 Subscription based model
 Increasing Localisation

Supply chain
Ather vehicle was designed entirely in-house, with the manufacturing process utilising 90 per cent
components that are locally sourced.But the lithium-ion cells that make up the battery pack are
wholly imported.
As the scooter is built from scratch there are no off-the-shelf parts. To counter this they started to
raise funds expectedly $50 million. There also want to set up another platform for a new line of
scooters priced lower than the existing two variants which Ather 350 and Ather 450.For the new plant
they were well funded but still needed extra funding.
Ather has so far received $51 million funding including about $20 million from Hero MotoCorp. Some
of its other investors include Binny Bansal, Sachin Bansal and Tiger Global.

Challenges
As the company was new in its development it faced a lot of problems in its initial phase of developing
the prototype. For example, you’ve chosen a wrong vendor and that thing can’t go into scale
manufacturing.So,the biggest task was choosing the right vendor and also to work with them in
developing new products.
They faced tough time getting feedback from Indian vendors which was essential for them whereas in
China they used to get feedback and quality check within 1/3 rd of time. Ather did not have the staff
numbers or the financial bandwidth to have a team stationed in China to do the design and quality
check.Also none of the vendor knew about electric wire harnessing. The solution? Give the team the
time and the space to grow as part of the team. “Now the team is raring to go. They are like we will
do this in two years.”

Human Resource and Job design

The next task was to build Ather’s development process as it was a new technology, completely new
platform, new architecture and by a company that has no prior history and people and systems.It
became harder to find efficient staff to do this work as it was developing a new product and everyone
were working on existing German or Japanese counterparts. They looked for people from second or
third tier companies where they have dirtied their hands in all processes. People who have “actually

Electric Vehicles - Prospects for India Page 18

done injection moulding, casting, electronics assembly and not managed that process,” says
Srinivasan.

Design of Goods and Services

To ensure a seamless experience across various functions of the scooter, they have a common design
group. “It is called the industrial design team’, that works across :-
 User interface
 Looks
 Feel
 Ergonomics
 Packaging
 Architecture etc for the scooter as well as the charging pod
The 340 and 450 frame is built from mostly from aluminium and some steel components because
aluminium frame was lighter and also helped in achieving the manufacturing tolerances. The other
thing you will notice on the frame are the large heat sinks, of which the battery has the largest, built
into the systems to cool various components including the battery, motor, onboard charging unit, and
dashboard.

Strategy
For the company selling a scooter is not the only plans but it wants to make the ownership experience
also as seamless as well.Running out of charge is the biggest anxiety and to remove it Ather has
launched its in-house charging infrastructure, Ather Grid, about two weeks before the scooters
opened up for bookings. The company has partnered with cafes, restaurants and other such public
places for setting up charging stations.

And to improve the ownership experience of the scooters, Ather has also launched a subscription plan
called Ather One that the company claims will take care of all predictable expenses incurred in
running the scooters.

With a focus on end-to-end customer experience and building smart transportation for the future,
Ather embraces the cloud to accelerate the process of development, production, testing, and launch
of their cloud-based connected scooters. Ather’s business relies on multiple public clouds and cloud
services, to innovate faster and enable every element of their customers’ experience.

With its innovation and operations strategy now Ather wants to implement these things in near
future

Forecasting
 The electric vehicle startup also plans to perforate international markets
 Reportedly, the brand intends to set up 6500 charging stations by 2023.
 Ather wants to launch a new product every year.
 Besides leasing and retail sales, Ather also plans to enter different business avenues.
 They plan to set up a manufacturing plant in 2020,that can have an annual production
capacity of 10 lakh units.
 Expand to 30 cities by 2030

Electric Vehicles - Prospects for India Page 19

Electric Vehicles - Prospects for India Page 20
Case Study: Mahindra Reva

Introduction
Mahindra Reva Electric Vehicles Limited based in Bangalore, India was started in 1994 as a Joint
Venture between the Maini Group India and AEV LLC California, USA to manufacture environment
friendly and cost-effective electric vehicles. Mahindra & Mahindra, a US$16 B conglomerate in India,
took a majority stake in Reva in May 2010. Mahindra Electric (ME), as it is known today, is a global
pioneer in affordable electric vehicle (EV) technology and was the first company to successfully
commercialize electric cars in India. In addition, Mahindra Electric cars have been sold in 26 other
countries across the globe with more than 4000 of its different versions sold worldwide by 2011. ME
aims to mitigate the impact of pollution, climate change and oil dependency through the
development and manufacture of affordable EVs and related EV products and services, providing
consumers with Emission Free, Sustainable Personal Transportation.

In India, Mahindra Reva Electric Vehicles remains the sole manufacturer of 4-wheeler battery EVs
(BEVs).

The Government of India is on a mission to create revolution in renewable energy in the country by
planning a movement involving transformation to Electric Vehicles by 2030. It is expected to cut its oil
purchases by some $60 billion, reducing emissions by 37% and curb demand for road infrastructure
within the next 12 years.

Mahindra has announced an investment of around 60 million rupees to develop its EV division
expecting to launch electric variants of its vehicles. It currently has four electric vehicle variants that
include the flagship ‘e2oPlus’ which is a hatchback and an electric version of ‘Verito’ in the sedan
segment, the ‘eSupro’ which is an electric cargo and passenger van and the ‘e-Alfa’ which is an electric
auto rickshaw. Amongst those on the cards to be launched is the company’s 16-seater vehicle
‘eCosmo’, apart from an electric variant of the ‘KUV 100’ and the third launch planned includes the ‘e-
Treo’, an electric three-wheeler (auto-rickshaw). 

Electric Vehicles - Prospects for India Page 21

MAHINDRA REVA

In 1996, RECC built the first prototype for Reva and received the mandatory certification for the car.
The prototype was also put through the 250,000 km 'shaker test' at Automobile Research Association
of India (ARAI), Pune. It was also tested at ARAI for homologation and was certified road-worthy. The
prototypes were also tested in the US.

They were also tested on the Indian roads in conditions of heat, humidity, and monsoons. However,
Reva was not launched immediately. Chetan explained, "We had no definite plans to launch then. It's
just that we've been making absolutely sure that when the product is in the market, it doesn't have
any problems."

In addition, RECC wanted to ensure that at least 75% of the car's components were available
indigenously in India. The car had 1,100 components out of which 99% were manufactured in India
itself. In terms of value, the components manufactured in India accounted for about 75%. The
company aimed to achieve total indigenisation of 100% by the end of 2002.

Production and Sales of Mahindra e20

To address consumer concerns of high initial acquisition cost, Mahindra Reva introduced an
ownership program, “Goodbye Fuel, Hello Electric” for its Mahindra e20 variant. The program splitthe
acquisition cost into initial cost and e2o care protection plan. Under this program, the company
guarantees the performance of the battery as the ownership of the battery lies with Mahindra Reva.
The company also provides the 24X7 assistance and a courtesy car during battery repair period for
convenience of the customer.

Problems faced by Mahindra Reva in India

 Lack of awareness of the importance of electric vehicles
 Lack of subsidies or insufficient subsidies by the government. Government provides only 10%
subsidies on the sales of each EV which is not interesting enough for the Indian people to buy
a car worth almost 8 lakhs.
 Range anxiety also plays a big role in people not buying EVs. Range anxiety is the worry of a
customer that the battery of the EV will run out before reaching the destination or a suitable
charging point.
 Lack of charging infrastructure in India.

Electric Vehicles - Prospects for India Page 22

Case Study: Tesla
Abstract: Understand the strategy adopted by Tesla to achieve vision to develop compelling Electric
car which will help drive the World’s transition to electric vehicles. The study discusses the strategy
adopted by Tesla to enhance supply chains and innovation to breakeven the cost-investments by
developing the market and production strategy to sustain profitable venture. It also discusses the
prospect for India to enable the possibility to replicate the similar effect in the Indian markets through
policies.

Introduction
Tesla, Inc. earlier Tesla Motors,founded in 2003is an automotive and energy company. The
companydevelops  electric cars and, through its SolarCity Corporation which is a subsidiary of Tesla
solar panel manufacturing. Tesla has its main vehicle manufacturing facility in Fremont. It operates
multiple production and assembly plants.

 Tesla Factory Fremont, California

 Tesla Gigafactory, Reno, Nevada
 Tesla Gigafactory 2 (Proposed plant in China)

Tesla manufactures and sells electric cars Model S, Model X and Model 3 while also accepting
reservations from Model Y, Roadster, and semi Vehicles.

Other products offered by Tesla include Megapack batteries, Powerwall, Powerpack, Solar Panels,
solar roof tiles and other related accessories.

Strategy
Build sports car

Use that money to build an affordable car

Use that money to build an even more affordable car

While doing above, also provide zero emission electric power generation options

Tesla has adopted strategy to target affluent buyers and consequently develop into the markets at
lower price points. The technology of electric drive-train and battery will be partly paid through the
sales of earlier models. Model S and X are targeted for broader luxury markets while Model 3 and Y
are aimed for high volume segment.

According to a Musk blog post, "New technology in any field takes a few versions to optimize before
reaching the mass market, and in this case, it is competing with 150 years and trillions of dollars spent
on gasoline cars”

Production Strategy
Tesla is an industry leader of electric vehicles industry which is at a nascent stage. This means there is
a void in the infrastructure facilities and every requirement needs to be designed and built with
quality assurance for users to trust the subsequent innovation. For these reasons Tesla has adopted
production strategy that include a very high degree of Vertical Integration which help Tesla avoid the
complexities of global shipments and logistics. Tesla, who earlier used to procure materials from
globally distributed suppliers, now has vision to provide best vehicle experience that brings
manufacturing in-house.

Electric Vehicles - Prospects for India Page 23

Advantages:
The in-house manufacturing gives Tesla infinite flexibility to push improvements in the product. This
not only improve the cost of products but also increase the efficiency of production along with
throughput and quality. This methodology gives company agility for iterative development, testing
and deployment.

Disadvantages:
There is a requirement of huge capital investment to set up many verticals in highly competitive
automotive industry. This also demand high expertise across all domains and hence talent acquisition
and retention become expensive. Sometimes, the domain efficiency is compromised due to
distributed focus through the entire vertical chain.

Prospects for India

Tesla is a major dominant player in electric vehicles industry with focus on making a profitable
venture by creating most compelling car by driving world’s transition to electric vehicles. This helps
Tesla to focus highly on innovation and integrate supply chain but at the same time cannot alone
cater to the mass distribution.

Indian Government can play a critical role with different policies to promote and enable mass
production of Electric Vehicles in India. Some of the steps can be as follows:

 Develop guidelines and policy for development of charging infrastructure. There have been
some efforts for installation on small scale from companies such as Tata Power and NTPC.
 Robust supply chain needs to be established as many local manufacturers depend highly on
Chinese imports. This can be achieved by promoting research or inviting companies under
Make in India
 NITI Aayog has come up with Transformative Mobility Solutions (TMS) to encourage mobility
as a service demonstrated by app-based taxi like Uber and Ola which will create a high
traction for increased demand of electric vehicles.
 Government Initiatives should be taken for technology transfer/ patent sharing / research
supports of components like batteries so as to standardize the domain and have maximum
efficiency in mass production by economies of scale.

Electric Vehicles - Prospects for India Page 24

References
https://www.ucsusa.org/clean-vehicles on September 02 2019

http://www.idc.iitb.ac.in/munshi on September 02 2019

from https://www.google.com/ on September 03 2019

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http://www.siamindia.com/cpage.aspx?mpgid=16&pgid1=17&pgidtrail=76

http://www.indiasmartgrid.org/Electric-Vehicles.php

https://www.acma.in/ev-policy.php

https://www.teriin.org/sites/default/files/2018-09/ev-sector-policy-paper.pdf

http://www.forbesindia.com/blog/business-strategy/why-the-economics-of-mahindra-reva-e20-dont-
work/

http://www.icmrindia.org/free%20resources/casestudies/Electric%20Car%20Reva-Case
%20Studies.htm

https://en.wikipedia.org/wiki/Mahindra_e2o#Specifications

http://www.consultavalon.com/insights/electric-vehicles-in-india-prospects-and-challenges/

https://www.iea.org/publications/reports/globalevoutlook2019/

https://cleantechnica.com/2019/03/30/teslas-vertical-integration-unlocks-hidden-flexibility-
innovation/#targetText=Vertical%20integration%20grants%20Tesla%20more,and%20at%20a
%20lower%20cost.&targetText=A%20Tesla%20spokesperson%20told%20CleanTechnica,decreased
%2033%25%20since%20early%202016.

https://www.tesla.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me

Electric Vehicles - Prospects for India Page 25