Financial & Environmental Feasibility of electric vehicles in India

Over the summer, I conducted research on the financial and environmental feasibility of electric vehicles in India under a professor at the Indian Institute of Technology.

As ESG investors globally become excited by the prospect of electric vehicles and transitioning to a net-zero economy, India’s government and automobile industry have realized the need of the hour. Hence, the transition to clean energy marks a transformation in economic opportunities for automobile producers as the government gives out subsidies to advance improvements in battery production and recycling (especially in the space of advanced cell chemistry batteries) and for charging infrastructure for electric vehicles.

Source: https://www.thedispatch.in/electric-vehicles-is-the-shift-imminent/

In order to understand the feasibility of electric vehicles in India, I conducted a detailed analysis of India’s national and state policies, citizens’ income levels, forecasted electric car stock, and people’s travel patterns in metropolitan areas. It is important to note that as the battery capacity of a car increases, so does its price. The correlational relationship can be seen below. This is a key challenge that the Indian electric vehicle market is currently facing – making these automobiles accessible and also affordable.

India’s electric vehicle market is quite different from other countries as the Indian government is actively attempting to deploy electric public transport like e-buses and two-wheeler electric vehicles instead of promoting electric cars for personal use in order to make vehicles more accessible. However, deteriorating infrastructure and a rise in income levels nationally are leading to Indians buying more personal vehicles. For the sake of my paper, I assumed that households residing in larger Indian cities owning more than one car convert their second one to an electric car. Such a phenomenon could lead to nearly 0.06 million automobile units being transitioned into electric vehicles. A maximum of 1.5 million electric cars is expected for personal use in India if the number of families with cars grows by 10 times by the year 2040 if the same vehicle ownership pattern persists.

Consequently, India can transition its public transport system to electric, which will increase transit quality and help decrease air pollution. In 2010, the average distance traveled per day by bus in Delhi, and Hyderabad (two metropolitan cities) was 201 km and 266 km. An electric bus’ range is 249 km on average, making them a feasible option in India as buses are used most frequently in urban areas. Additionally, even the current number of electric cars meets the estimated travel demand on average of 65 to 102 km daily per car.

For India to acquire sustainable mobility, electric cars will need to restrict expanding private vehicle ownership and encourage people to move toward renewable energy sources. Initiatives like installing solar panels in buildings and carrying out vehicle-to-grid integration to meet the rising demand for energy. Vehicle-to-grid integration is another area that has scope for exploration due to it being largely fossil-fuel based currently.