A variety of stakeholders must contribute to realising India's EV goal

15 April 2019 Consultancy.in 4 min. read
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As a number of different stakeholders work towards meeting India’s Electric Vehicles (EV) goals for the next decade, global professional services firm Deloitte recommends that the development of detailed business models is the best way to generate coherence among all the activities in this regard.

The integration of EVs into the transportation sector has become a priority for a number of countries across the globe. Major economies in Europe including the UK and France have gone as far as to announce that the internal combustion engine will be abolished by 2040, while India’s goals are even more ambitious.

In 2017, the Power Minister of India declared that the Indian government intends to reach zero production of petrol or diesel engines by as early as 2030. The announcement prompted stakeholders in the sector to begin concerted efforts towards achieving this goal, while experts have tried to analyse its feasibility.

Components of EV ecosystem

Shortly after the announcement, global management consultancy McKinsey & Company conducted a comprehensive analysis of the EV sector. As per the firm, the current levels of production and regulatory enablement in the country might carry India to 40% electrification by 2030

The number is staggering, despite being short of the government objectives. According to the firm, the high levels of electrification will be the result of the current targeted government initiatives that are looking to lubricate the integration process, in addition to efforts from the private sector.

Automoblie manufacturers are currently investing in hybrid technology, which is expected to act as a stepping stone to complete electrification. The government, meanwhile, introduced tax concessions on the import of unassembled EVs just earlier this year, which not only boosted the import of parts but also gave impetus to the Make in India campaign.

EV Ecosystem

Big Four accounting and advisory firm Deloitte has now conducted its own assessment of India’s EV scenario. According to the firm, the rapid rate of urbanisation in the country has made the integration of EVs more crucial than ever before, given that the air quality in urban centres is rapidly deteriorating.

Nevertheless, the integration of EVs extends beyond an increase in their production and sales. According to Deloitte, a comprehensive ecosystem must be developed to enable the functioning of EVs in the transportation sector. Such an ecosystem would span the policy, production and consumption domains.

On the demand side, the firm recommends the introduction of incentives – fiscal and otherwise – for the purchase of EVs. On the supply side, the firm recommends incentivising original equipment manufacturers that are emerging in the domestic market, in addition to other boosts for the manufacturing sector.

Interaction among various stakeholders

The third component of this ecosystem is the enablers of the entire EV environment, which includes the charging infrastructure for the vehicles themselves, and the technology for the development of sustainable batteries and other components of the vehicles. The policy framework is another enabling factor.

“The interplay of these stakeholders is essential for streamlining EVs in transport systems and in creating a favorable EV ecosystem,” says the report. “Since every component is likely to have varying degree of stakeholder involvement, integrated efforts become more important for development of sustainable and smart electric mobility solutions. This interplay among stakeholders may be enhanced by government through designing rationalised and sustainable business models to foster the transition to EVs,” it adds.