Last week we reported on the headway electric vehicles are making in the Netherlands, framing the situation as idyllic for EVs. Less picturesque for plug-in sales is India — a nation that has similarly attempted to encourage the proliferation of electric cars, but with unimpressive results. As it turns out, India makes a stellar counterpoint for worldwide electrification.
Based on the success EVs have seen over the last few years, you’d think the government was asking everyone to start eating hamburgers. Despite having a population of 1.34 billion people, with more of them becoming drivers every day, just 8,000 EVs have been sold in the nation over the last six years.
India’s first problem is a populace that lacks the means to buy these vehicles. Examining the summer launch of Hyundai’s Kona Electric, Bloomberg reported that it still costs roughly the same there as it does here. At $35,000, that makes the Kona far too expensive for most Indians who earn an average of just $2,000 a year. The manufacturer only delivered 130 examples through August, with little prospect for better in the months to come.
Most vehicles sold in the region don’t go for more than $9,000, with some of the country’s most popular models retailing for far less. For example, Suzuki’s Alto goes for the U.S. equivalent of $4,050 and happens to be the nation’s best-selling automobile.
“The affordability of electric cars in India is just not there,” said R.C. Bhargava, chairman of Maruti Suzuki India. “I don’t think the government or the car companies expect that in the next two to three years there will be any real buying of electric vehicles.”
From Bloomberg:
The segment still isn’t making meaningful strides more than four years after the government started promoting cleaner vehicles for one of the world’s most-polluted countries. In February, Prime Minister Narendra Modi’s administration committed to spending $1.4 billion on subsidies, infrastructure and publicity.
Maruti [Suzuki] not introducing its first EV until next year. Tata Motors Ltd. and Mahindra & Mahindra Ltd. build some base-level electric cars, yet they have a limited range or are exclusively for government use. The Kona gives Hyundai a first-mover advantage in a market where EVs may comprise 28 [percent] of new vehicle sales by 2040, according to BNEF.
Not only Hyundai sees opportunity in Asia’s third-largest economy. MG Motor, the iconic British carmaker owned by China’s SAIC Motor Corp., and Japan’s Nissan Motor Co. see EVs as a way to expand in the country.
“Somebody has to take the leadership, and it will trickle down,” said Rajeev Chaba, managing director of MG Motor India, which plans to launch an electric SUV by December.
Being first has its advantages, but those rushing into India without a plan are likely to suffer. Despite an overwhelmingly large population, only about 150 million Indian residents can drive. While the potential for growth is inspiring, it’s currently dormant.
Realistically, wages would need to come by a huge margin for people to seriously consider EVs in meaningful volumes. Battery prices would also need to plummet and the country would have to get serious about installing a nationwide charging infrastructure. Bloomberg estimated that India had an estimated 650 charging stations in 2018 vs China’s 456,000 charging points.
The country’s size, roughly 1/3 of the United States, makes deciding where and when to implement charging zones a significant challenge. Locals don’t see a point in installing EV stations when adoption rates are slow and the government is hesitant to spend more money for the same reasons. But without a charging infrastructure, it’s difficult to for consumers to rationalize the purchase of an EV — creating a a feedback loop that might stymie electric adoption indefinitely.
The broader Indian automotive market is also proving to be troublesome. Passenger vehicle registrations plunged as much as 30 percent over the summer, handicapped by tightening emission rules, tax changes, and widespread banking issues. Non-banking finance companies were doing the heavy lifting for vehicle purchases for years, but many now find themselves overburdened. As a result, many lenders have closed up shop or started refusing to entertain automotive or housing loans. This has spooked traditional banks as well, making them similarly hesitant to offer loans deemed high risk.
“There is an imminent crisis in the non-banking financial companies sector,” Injeti Srinivas, India’s corporate affairs secretary, told reporters last May. “There is a credit squeeze, over-leveraging, excessive concentration, and massive mismatch between assets and liabilities, coupled with some misadventures by some very large entities, which is a perfect recipe for disaster.”
This places a lot of pressure on the Indian government to make these vehicles appetizing to consumers and banks — neither of which are terribly interested right now. While there are a bevy of new incentives coming for EVs (tax breaks, import duty exemptions, etc) most of it goes toward supporting two-wheeled transportation. Similarly concerning is the fact that state-run attempts to embrace electrics as government-use vehicles have also ended in failure.
Energy Efficiency Services Ltd. (EESL), a joint venture of state-run companies responsible for replacing governmental vehicles with EVs, was awarded its first tender in September 2017 for 10,000 vehicles. As of July, agencies had accepted only 1,000 of them. EESL plans on selling the rest to taxi companies.
[Image: SNEHIT/Shutterstock]
What they need is scooters, not cars. Most people get around fine in scooters and electric scooters are cheaper and more reliable than gasoline equivalent. They can also push them into residences to avoid thefts and vandals.
The problem with scooters and motorbikes is that Indians will carry their entire family on one two-wheeler, that’s hardly safe. It was a failure in the market, because, after all, even poor folks don’t want to be seen driving the “cheapest car in the world”, but Ranan Tata’s idea to use the Nano to get Indian families to use safer transportation than 6 people on a Royal Enfield wasn’t exactly a terrible idea.
As usual, smart people in the developing world are on it. According to this Bloomberg article, there are more than 1.5 million electric tuk-tuks on the road in India. So the “8,000 EVs” statistic is misleading at best. In terms of real-world, affordable, realistic vehicles for India, the market is real and growing. Compared to this type of vehicle, a midsize Hyundai EV is an expensive curiosity. If the electric tuk-tuk makes sense for businesses, then it can grow into the consumer market over time.
https://www.bloomberg.com/news/features/2018-10-25/india-s-rickshaws-outnumber-china-s-electric-vehicles
https://www.enelx.com/en/news-and-media/news/2018/11/electric-tuk-tuk-india
I think the Suzuki Alto does somewhere around 50 mpg. Their biggest challenge will be replacing buses and trucks, as the picture shows.
What they need is condoms
Well, Chinese tried it and now China is facing serious problems of depopulation and shortage of workers and most importantly solders.
There is something like 1.3 billion of them, I wouldn’t worry too much until that number is halved.
https://en.wikipedia.org/wiki/People%27s_Liberation_Army
Their problem is not depopulation but rather aging population. But unlike all other countries, China is not planning to import foreigners. This is taboo for them. China is for Chinese.
No one in his right mind will emigrate to China, even Mexicans. So Chinese do not need to worry about it.
Have you experienced Indian traffic?
I marveled at how I could be looking out the window at the exact same small small motorcycle that I had been looking at for the last hour of gridlock New Delhi traffic. At 9PM.
The above pic isn’t anything like any multi-lane highway in India I’ve ever seen. Definitely missing cows and pedestrians and hawkers.
The article is silly. There are vast numbers of electric tuk-tuks in India.
A Maruti Zen (equivalent to a Geo Metro) costs 3.66 lakh
= Rupee 17,500,000
or $36,000 in AUD, $24,500 in USD.
In summary, green virtue signaling tends to be expensive.
But if you expand the visualizations to wheel at the top, then it’ll get really expensive.
All of that electricity has to come from somewhere. India’s national electric grid is not even complete yet. Only 83% of rural Indian households have electric power. I think providing basic electric service for lighting and refrigeration for all Indians is more important than creating networks of EV charging stations.
The electric demands of a fully BEV fleet are not much greater than today’s existing capacity.
If my 2000 s.f. suburban home is acceptable as a template in the US, my 13k/yr of BEV driving has raised my electric consumption by about 20%. I can’t imagine this would scale much different around the world. On the other hand, I still have 2 ICEs in my fleet.
And 45% have toilets
How would wages come up enough to afford EVs when the world uses India as a cheap source of labor? How can wages come up when they still have a huge population needing better education?
India isn’t going to go green for decades if ever unless the West pays for it.
From Halifax to Vancouver environmental protesters have been blocking crucial bridges during rush hour today.
I find it ironic that the folks that choose to drive an E.V are stuck in the same traffic jam as the Tahoes, and F 350’s
The EVs stuck in traffic are likely taking people to actual jobs (something most protesters lack), and are unlikely to be carrying the same kind of people, anyway.
Saving the earth isn’t why I drive one. Frankly, I’m appalled that we let 16-year-olds address the United Nations with any authority whatsoever, on this or any other issue.
Environmental protesters use the least intelligent methods of actually protesting the cause they claim to stand for. Blocking a bridge results in cars and trucks sitting there idling and emitting CO2 and all kinds of other diesel pollutants until the police remove said protesters. Instead of protesting some cause, their time would be better served learning Engineering and Chemistry – and working to develop new battery technologies that are more environmentally friendly. But that’s too hard. Blocking traffic is easier.
That said, I am considering a lightly used EV for my commute – mostly because I hate gas stations. And a slightly used EV can be had for a song nowadays.
It’s worth noting that car sales in India have grown at an annualized rate of 8% since 2005, at least.
http://carsalesbase.com/total-market-sales-country/india-car-sales-data/
India’s EV motive is to stem the inevitable pollution problems from their burgeoning ICE market.
I can think of few better examples of myopic deck-chairs-on-the-Titanic efforts than this. Do EV make sense for urban use? Sure. Will they help India’s pollution problem? Mostly just relocating it to power plants and Congolese mines, but perhaps overall there’s a benefit. It would most likely be a much-needed improvement in city air quality. Will any of this matter if that 1,340,000,000 figure keeps growing? Oh it’s impolite to ask that question, is it? Maybe if the resources spent on Smiling Buddha (look it up) et al had instead been spent on education and women’s rights, there’s be less of a pollution problem in the first place, and an easier time implementing solutions.
Cultural challenges aside, relocating the pollution to the power plant is not an even transaction, since the power plant has economies of scale that no individual car can hope to achieve.
And the electricity could come from…..from…..from a nuclear power plant.
There. I said it.
Most of the uranium that gets dug out of the ground a few hours from where I live ends up in Indian power plants.
What little Greta would say about India going green? I am all ears.
Being responsible is a luxury of means….
Specifically a comfortable middle-class with $1,500-$2000 a month in expendable income.
And based on their GDP per capita ranking I would expect 119 countries to embrace EVs before India….
How many Indians are seriously shopping first-world SUVs, regardless of propulsion? India’s big EV opportunity is electric tuk-tuks. Safer than a 2-wheeler, cheaper than a 4-wheeler, an electric one is vastly cleaner than its ICE counterpart without being horribly expensive, and the battery is small enough it should recharge just fine from a regular household plug overnight so charging infrastructure isn’t an issue. Boom, solved. (Now if we can just decommission those filthy coal plants…)
How many Indian homes have a garage or at least a private driveway to facilitate charging at home? I’m guessing not many, and this would be another reason for the low EV adoption rate.