India’s first Global Mobility Summit—MOVE—organized by NITI Aayog, the Indian government’s policy think tank, on September 7th and 8th was the clearest signal yet of the Indian government’s commitment to transforming India’s mobility ecosystem. Underlining the summit’s comprehensive approach to mobility, there were five main thematic sessions: Maximizing Asset Utilization and Services, Comprehensive Electrification and Alternative Fuels, Reinventing Public Transport, Goods Transport and Logistics, and Data Analytics and Mobility.

The summit brought together top industry leaders and government representatives. Among the attendees were Osamu Suzuki – Chairman and COO, Suzuki; Dr. Andreas Lauermann – CEO, Volkswagen; Anand Mahindra – Chairman, Mahindra and Mahindra; Guenter Butscheck – CEO, Tata Motors; Takeshi Uchiyamada – CEO, Toyota; RC Bhargava – Chairman, Maruti Suzuki; Pankaj Munjal – CEO, Hero Cycles; Chen Zhixin – President, SAIC, Roland Folger – MD and CEO, Mercedes-Benz India Pvt. Ltd, Bhavish Aggarwal – CEO, Ola, and Brett Wheatley – Global Vice President, Ford Motor Company.

Speaking at the landmark event, Prime Minister Narendra Modi noted, “We want to drive investments across the value chain from batteries to smart charging to electric vehicle manufacturing. We will soon put in place a stable policy framework for electric and alternate fuel powered vehicles. Policies will be designed as a win-win for all, and will enable huge opportunities in the automotive sector.”

Among the key takeaways related to electrification were:

  • Clean Technologies: The transition to clean automotive technologies was highlighted as a strategic imperative for India if it wants to successfully address the challenges of greenhouse gas emissions, air pollution, and the financial burden imposed by rising oil imports. Among potential clean technology pathways identified were hybrid-electric, pure electric and alternative liquid or gaseous fuels.

Experts concurred that conditions in India are conducive to promoting a sustainable mobility paradigm. This is creating impetus for the accelerated adoption of EVs over ICE vehicles.

  • Targets: Sales data collated over the last 6 years reveal that 2-wheelers account for an estimated 79% of total vehicle sales in India. They are followed by economy cars with 12%, 3-wheelers with 4%, and buses and trucks with 3%.

Premium cars account for 2% of sales in the country. Significantly, in global markets, most advanced technologies are initially offered in the premium car category. According to the NITI Aayog, the short-term target should be to increase adoption of EVs among premium customers. In the long term, India should establish technological and manufacturing leadership in the economy segment. In particular, speakers noted that India had an exceptional opportunity to assume a leadership role in the electrification of small vehicles.

  • 2-wheelers and 3-wheelers / Public Transportation: 2-wheelers and 3-wheelers are responsible for two-thirds of fuel consumption in India. Consequently, several experts and industry leaders were of the view that that the focus of electrification should be on these two segments, followed by public transport, and only then 4-wheelers.

There were arguments that although the current push on e-mobility and electrification would counter the issues related to fuel imports and pollution/emission, it would not solve the problem of congestion. In this context, experts suggested that there should be a strong push toward electrification of public transportation.

The CEO of Hero Cycles, made an interesting comment that “people drive their vehicles to the gym and there they ride bicycles!” He suggested that government should subsidize bicycles, both traditional and electric, and take steps to introduce electric bikes. Such government subsidies were critical in the context of bicycles which, despite being the most common mode of transportation in India, still remained unaffordable for a large chunk of the country’s population.

  • Infrastructure and Battery Development: The cost of lithium-ion battery packs has declined almost 4-fold and, in some cases, even 7-fold, in the past 5 years. It is widely believed that prices will drop even further. However, new battery chemistries are unlikely to use lithium or cobalt. Instead, zinc- and manganese-based battery chemistries are likely to increase. The widespread availability of these metals in India would facilitate the manufacture of next generation battery packs in India, and would align with the ‘Make in India’ campaign.
  • Roadmap for the Future: The government is working toward ensuring that EVs account for 30% of vehicle sales by 2030. While this seems viable, the industry harbors strong, and sometimes divergent ideas about how India can realize this clean transportation vision.

For instance, it was felt by some that India’s “electric vehicle revolution” should predominantly consist of battery electric vehicles (BEVs), which are significantly cleaner than ICEs, even after accounting for CO2 emissions involved in power generation. However, given the challenges around achieving a high penetration of BEVs, using hybrid EVs (HEVs) and alternate fuels was seen as a way to cut back on fuel use in the short term. In comparison to ICE vehicles, HEVs have lower cost difference and require no additional infrastructure. Plug in HEVs (PHEVs) were proffered as a mid-term solution, while BEVs were seen as a long-term solution as it would take time to bring down prices to affordable levels and create adequate charging infrastructure.

There was general understanding that the transition of the mobility sector from a fuels-based one to an electric-based one was unlikely to come about overnight. However, the shift to electric mobility was seen as vital to achieving three strategic goals; one, reducing spiraling fuel imports; two, accelerating the clean economy agenda; and, three, generating new employment opportunities, especially in domestic battery production. In this context, the message sent out by the Indian government at the summit was loud and clear: there will be no more policy flip flops. Instead, it will fast track its vision of Common, Connected, Convenient, Congestion free, Charged, Clean and Cutting edge mobility.

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Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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