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MOSL: AUTOMOBILES-EVs-Clear policy and fiscal/non-fiscal incentives are key

Automobiles: EVs: Clear policy and fiscal/non-fiscal incentives are key; Localization of key EV components critical for lowering cost, protecting jobs

 We attended ‘ETAuto EV Conclave 2018’, a conference focused on electric vehicles (EVs), wherein key industry stakeholders brainstormed to chart a roadmap for EV transition in India. Notably, all stakeholders were unanimous in their view about a) need for a clear policy to expedite EV adoption, b) need for localization to protect jobs and reduce cost of EVs and c) importance of EVs in meeting future emission norms. However, there were mixed opinions about the role of hybrids and swappable batteries. Industry participants believe that, despite the imminent transition to EVs (40% penetration of EVs by 2030E), ICE powered 2W/4Ws will still grow at a 4% CAGR.

 

Clear policy on EVs – a key for OEM commitment

• OEMs and component companies unanimously sought clarity on EV policy, without which investment commitment would be uncertain.
• While the Indian government has set a target for 100% EV penetration in intra-city commercial transportation and 40% in personal transportation by 2030, it is yet to frame policies to attain these targets.
• It is critical for industry to work toward localization of EV components to reduce total cost of ownership.
• The government is working on a comprehensive EV policy, including the FAME-2 scheme for promoting EVs.