Impact of Electric Vehicles on Auto Industry

Archives

TOPIC: General Studies 3

• Environment – Pollution, Climate Change

In News: Visible effect of the lockdown is clean air in cities as vehicles went off roads. The Himalayan range became visible from Punjab for the first time in 30 years. Satellite images showed the steep drop in nitrogen oxides from vehicular emissions in Delhi and Mumbai. As lockdowns ease and roads fill up again, we’ll see pollution return. But the experience of breathing fresh air reinforces the case for switching to electric vehicles. 

Although the shift to electric was once considered far off and unlikely for many people, the rising concern for climate change and sustainability has helped sway public opinion towards the need for transportation based on alternative energy.

The Centre has an ongoing FAME II scheme of subsidies and incentives, although stronger measures may be needed to meet the goal of electric vehicles comprising 30% of auto sales by 2030. The coronavirus crisis has hit the auto industry, and it’s a wait to see when electric vehicles regain momentum. 

Electric vehicles 

The pressing nature of environmental issues has caused automotive companies to invest in the widespread adoption of alternative energy for their vehicles. However, as pressing as the need for environmental change is, the financial barrier to electric cars hinders a large portion of the population who would otherwise invest in alternative energy.

China and Japan are leading the way in terms of acceptance — and, being two dominant countries in one of the world’s biggest markets, that in turn has pushed the industry to adapting.

In Europe electric and hybrid cars gained traction – battery electric vehicles and plug-in hybrid cars accounted for 17% of sales across all European markets, including the UK, in April. 

• The cost of renewable energy has dropped to a point where it will remain viable under reasonable long-term forecasts of crude oil prices. As renewable sources power larger fractions of a nation’s grid, EVs make sense for both economic and environmental reasons.
• Secondly, there is visibility to significant reduction in cost of batteries and electric propulsion systems in the years ahead — when conventional vehicles will likely be subject to even more stringent fuel economy and emission norms. 
• Third, the future of mobility requires vehicles that are connected and employ various degrees of autonomy. For this, EVs enjoy an intrinsic architectural advantage. 

EVs also are seen as the first step to achieving an autonomous reality — where the driver can take a back seat as the car drives itself.

Forecast for India

The EV market will recover swiftly from Covid-19 setback when compared to their ICE counterparts and their outlook remains strong in the medium term. As per EV market forecast by Frost and Sullivan, e-rickshaws, e-autos and e-two wheelers are the most promising segments for electrification in India and are expected to account for over four-million units by 2025.

Lack of long-range EVs, cost of acquisition has been the major restraint for electric passenger car uptake in India. Electric cars have not been a success story in India in the past, but as per Frost & Sullivan, the market will grow but not at the same level as the target set by Niti Aayog in India.

The Challenges

The number of privately-owned motorised vehicles rose from 29 million in 2002 to 160 million in 2013. This figure will almost certainly rise again, to over 500 million, by 2030. This immediately raises the question, “Where will the electricity they consume come from?”

• Given the limited capacity of solar PV power to meet this demand and the miniscule contribution of nuclear power in India’s energy mix, nearly all of this will have to come from coal.
• Even with supercritical temperatures and pressures of steam to drive the generators, the conversion efficiency of heat into electricity is no higher than 42%. There will be further losses in converting AC into DC current and in overcoming the inertia of moving parts as electrical energy is turned into mechanical energy to drive the vehicle. 
• All in all, therefore, at least three times as much fossil fuel energy will have to be consumed as the energy saved by switching from oil and gas to electric cars. Most of it will come from coal, which generates far more greenhouse gases per unit of usable energy than petrol, diesel or CNG.

Infrastructure for the Electric Vehicles

• There is the giant shift that will have to be made in the country’s energy infrastructure.
• In 13 short years, a nationwide network of charging stations will have to be built, that is capable of recharging car and lorry batteries within a few minutes. 
• Simultaneously an intricate transport fuel distribution and storage system will become redundant, causing substantial losses to the distributors. 
• Add to this the losses that India’s highly developed auto components companies will have to endure – some of them will shift their factories to Thailand.
• If these stations are also to meet the demand of charging electric vehicles, during power cuts and low voltage periods the owners will have to set up generators. These will run on diesel, contributing still more greenhouse gasses.

The impact of electric cars on the automotive industry has been slow so far, but as alternative energy climbs higher on the list of priorities for governments and citizens, the shift may be more sudden than we expect.

Connecting the Dots:

1. Will a significant shift to EVs will resolve the air pollution crisis in the country? Critically evaluate the risks associated
2. Essay: Electric Vehicles Will Worsen India’s Pollution Crisis