Given the high fuel costs for taxis and other vehicles, batteries typically offer drivers long-term savings compared to imported fossil fuels, gasoline or diesel. Plus, there are the environmental benefits of going electric. Although electric vehicles (EV) are still expensive and have fewer options available, this is changing. Startups and mobility companies are investing heavily in the area.
One idea that appears to be gaining traction is shared mobility, whereby users exchange and share transport, accessing it as needed.
Anand Shah, co-founder of Ola Electric and senior vice president of Ola, is co-creating infrastructure that effectively meets transportation demands. His team has launched several pilot projects with different brands of electric vehicles and charging solutions. The goal is to work with auto OEMs to alleviate EV costs and operations for drivers.
One of the models Shah and his team are testing is battery swapping, which allows OEMs to supply vehicles without an expensive battery designed to last the life of the vehicle. Instead, drivers quickly replace a dead battery with a new, fully charged one, typically at a “swap station.” According to Shah, this solves the cost and convenience problem for drivers operating EVs. The switch eliminates charging wait times and vehicles would use smaller batteries.
Currently, pilot projects are being implemented in several cities, but with two- and three-wheeled vehicles. The goal is to start small and then gain a better understanding of how to successfully scale up to regular-sized vehicles.
However, costs are not the only factor to consider with batteries. Performance is typically linked to climatic and environmental conditions, for example. Additionally, each battery has a different lifespan depending on chemistry, conditions and the number of times it is charged. Battery chemistry, charging speed, density and availability of charging points are key factors to consider if EVs are to ever surpass the number of conventional vehicles on the road.
However, as OEMs launch new electric vehicles, they will become less expensive and more efficient. Shah's mission is also to get 10,000 new electric vehicles on the roads by 2022 as a push towards cleaner transportation.
Imports and incentives
The Indian government predicts that demand for electronic products will reach US$400 billion between 2023 and 2024. This could lead to a valuable outflow of foreign exchange in the country, which could widen the trade deficit with other countries. The government is therefore encouraging local production of electronics in the hope of reducing import costs.
The Ministry of Electronics and IT has published a draft electronics policy, which aims to create a turnover of 400 billion dollars in the electronics production environment by 2025. However, the strategy relies heavily on the success of mobile phones and related components . Case in point: the policy aims to double the cell phone production target from 500 million units in 2019 to one billion by 2025.
Many believe there should be recommendations and benefits for other electronics manufacturing sectors as well – and there is hope. For example, the draft policy includes direct tax benefits for manufacturers who establish new facilities or renovate existing ones.
The government also intends to promote a prospective tax rule, which includes investments in various electronics segments with an expiry clause. Furthermore, it is considering increasing income tax benefits on R&D-related investments in the electronics sector.
Furthermore, in 2012, the Indian government approved a special incentive package that promotes large-scale production in the electronic systems design and manufacturing (ESDM) sector. Under this modified special incentive package scheme or M-SIPS, companies are given a subsidy of 20 percent for capital investments in special economic zones (SEZ) and 25 percent for capital investments in non-SEZ areas .
M-SIPS has helped encourage local production of products such as televisions, mobile phones and LED products (such as light bulbs) that were previously too expensive to produce in India. The exclusion of taxes and other incentives has made it much easier for international companies to set up operations in India.
The government also plans to incentivize component suppliers through deductions and subsidies associated with investment. The aim is to make India an export hub for electronics – meaning all local production will likely benefit in the coming years, and that's a good thing for electric vehicle OEMs.
