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Why India can be no.1 consumer market for electric vehicles?

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Why India can be no.1 consumer market for electric vehicles?
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In a report published on 4th October, the Bank of America Merrill Lynch has stated a number of factors that could make India one of the top markets for electric vehicles in the days ahead. It is expected that by 2030 there could be an inflection point as far as costs related to electric vehicles (EVs) and internal combustion engines are concerned. With proper fuel savings by one and all, this could be further brought forward to 2023. In 2050 it is estimated that the EVs will account for almost 90 percent of all the light vehicles sold.

By 2020, customers will get more choice in terms of EVs thanks to the rise in the number of cumulative models. It is expected to go up to 246 in 2020 from 116 in 2016. The battery prices of EVs are also expected to come down from around 10,000 dollars to 4,000 dollars.

The average range of these cars is also supposed to go up to 440 km from 200 km. Both these factors, according to said report, will play a major role in more people using EVs in the days ahead. In 2015, costs of battery cells and packs came down to 288 dollars per kWh (kilowatt hour).

Compared to the prices of 2011 this represented a reduction of 48 percent. It is expected that by 2030 this would further come down to 72 dollars thus representing a decrease of 75 percent. It is also expected that in 2050 the percentage of vehicles that have some or the other form of combustion would come down to 10 compared to 99 in 2017.

What is the government doing?

Recently, Energy Efficiency Services Ltd (EESL), a state-owned body, has awarded Tata Motors Ltd., a contract whereby the latter is supposed to supply 10,000 electric cars.

The contract was awarded during September 2017 and is worth INR 1,120 crore. This indeed shows that the government is willing to walk the talk when it comes to electric mobility in India. The cars are supposed to be delivered in a brace of batches – 500 were supposed to be supplied by November 2017.

A deadline is yet to be decided for the next batch of 9500 cars. Mahindra & Mahindra Ltd has won a part of this order as well and is supposed to provide 150 of the first batch of 500 cars.

On a concluding note

It won the contract by matching the winning bid put in by Tata Motors. These electric cars are supposed to be used instead of the petrol and diesel cars that are used by the government as well as various other agencies operated by it. There are presently around 500,000 such cars and a third of them happen to be leased.

The government has allocated the responsibility of getting EVs to EESL. The coming set of tenders in this regard is supposed to be for vehicles such as e-autos and e-rickshaws. This will be done as per the FAME (faster adoption and manufacturing of electric vehicles in India) program.

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