Indian EV landscape: Where it stands and the road ahead

 

It was not long ago when the debate revolved around whether electric vehicles (EVs) were commercially viable, and did nations have the infrastructure, resources to replace the internal combustion engine (ICE) vehicles with EVs.

As terms like carbon emissions became part of public consciousness in the 21st century and countries strengthened their resolve to cut down on greenhouse gases, their ambition to switch to EVs also gathered momentum. 

Countries like Norway, Iceland, Sweden and the Netherlands made fast moves in switching their fleet from ICE to EV. While the countries with comparatively less population, better infrastructure, could make the transition easily, countries as large as China were not behind. China didn’t take much time to develop an all-round infrastructure to manufacture EVs and equipment and installed it as the world’s EV capital with the most number of vehicles.        

Following in the footsteps of leading EV nations, India also shifted its focus from ICE to EVs after the year 2010. Acknowledging the rising importance of EVs in current times, the Indian government has targeted to convert more than 50% of the country’s ICE vehicle fleets to EV engines by 2030. Another reason which made the government more conscious about EV development was the country's highly polluted cities where crores of people suffer from respiratory diseases and cancer.

A study by CEEW Centre for Energy Finance in 2020 said that the Indian automotive industry needed an investment of 12.50 lakh crore to achieve that goal. For a nation of a billion-plus population, it may be quite an ambitious goal. According to a report in 2021 by the Federation of Automobile Dealers Associations of India, only 0.79% of vehicles in the country were electric and barely 500 of the 26,500 automobile outlets sell EVs. The Indian market share of EV vehicles fades in front of Norway, Iceland and Sweden, which have 74.8%, 45% and 32.2% market share, respectively.

The current state of the Indian EV industry notwithstanding, the government is keen to encourage people to take up new technologies fast. So, the centre and state governments are heavily subsidising EVs’ costs. Such encouraging backing from the government sets an ideal backdrop for an EV-friendly atmosphere in the country.

But it presents just the rosy picture of uncharted territory, as it misses the real challenges that crop up even before an EV goes to a showroom or hits the road. Technical challenges, lack of infrastructure and charging stations, the high price of EVs, and the unskilled workforce are some of the factors that are a deterrent to the growth of the Indian EV industry.

 

In this write-up, we take you through the main challenges that the Indian EV industry is facing at present.

 

Lack of Original Equipment Manufacturers (OEM) in EV space: Government assistance, emerging start-ups' unique ideas and the launch of new vehicle models by leading OEMs show that the Indian EV industry is eager to embrace fast-emerging changes, but the country is lacking in the global supply chain. India’s high dependency on foreign equipment manufacturers, especially for lithium batteries, is the prime reason for the slow growth of the industry. Though the government has allowed 100% foreign direct investment in the EV space, the industry is not going to meet the requirements of producing EVs at a mass scale until local OEMs step up to bridge the gap and produce equipment on their own.

In the lithium battery landscape, the majority of Indian EV manufacturers import batteries from China, which adds up to almost half the cost of an EV. It means just because of an expensive battery, the cost of an EV increases more than 50% of its ICE model. It can be reduced if local OEMs start producing lithium batteries in India.

China is hands down the EV leader of the world as it has capitalised on almost two-decade-long research on lithium batteries. The evolution of its EV industry in such a long time, coupled with massive support to the local industry and notable government assistance, have put China at the forefront of lithium battery technology. The Indian EV industry, on the other hand, is in its nascent stage and lithium batteries are being developed by only a handful of companies and that too through costly imported material.    

The other major problem Indian EV companies are facing is the shooting price of lithium. Local companies import lithium (cells) from China to manufacture battery packs. However, the boosted demand of EV batteries has also increased lithium’s price three times in the last five years. In such a scenario, the Indian government needs to be more proactive to solve the lithium problem for the EV industry. The public sector should either develop local infrastructure to explore lithium raw material, or it should heavily subsidise local companies to import lithium. If the government provides a robust initial push to local companies, many of them can start having cell-to-pack assemblies in a few years.

 

 

Body engineering technical challenges

 

ICE engines have been around for about a century and have gone through multiple developmental stages. The same is not true for EVs. It is a new domain, where most of the significant developments have occurred outside India and only in the last decade. When it came to the body structure of EVs, following in the footsteps of the global industry, the Indian industry also used ICE body structures for EV models. But this trend can go only for next few years as when millions of EVs will ply on roads, stopgap arrangements won’t work and EVs will be needing dedicated body structures.    

With a view to producing EV body structures different from their ICE counterparts, India needs to overcome a lot of engineering challenges like crash safety, EV weight, and multi-material skills for optimum cost, weight and performance.

 

Crash safety

Crash safety development is an important factor since its main aim is how to reach and dissipate kinetic energy in the event of a crash. The magnitude of the crash can hurt the occupant sitting in the vehicle and can also cause physical damage to the vehicle. Due to the deceleration of the vehicle and deformation of the body structure, it is necessary to minimise forces on the occupants and also the critical vehicle system.

In an EV design, available crush space and the efficiency of crash structure are the main factors in managing crash safety. The addition of the battery module and requirement to protect it from a crash that may result in disastrous failure present important challenges for EV manufacturers. The location of the battery tray and the required size don’t leave much crush space to react and absorb impact energy, specially in cases of side impacts. The Auto industry’s long experience with ICE engines has given sufficient experience of how to protect occupants in event of side crash and have provided theories and the convergence of side impact protection solutions. In EVs, less crush space is available to protect the occupant and the battery schedule.

In comparison to potentially more severe side impacts, front and rear crashes may help EV manufacturers design more efficient crash structures and make available more crush space because of the elimination of the fuel tank and reduced package space.

As EV manufacturers are working on this, areas like vehicle body and battery tray structure development are going through transformational challenges like multi-material combinations, and metals like steel and aluminium are being used for body side reinforcing solutions and high-performance rockers. These solutions will cover areas like stiffness, strength and energy absorption characteristics required to manage the impact energy.

In the current market scenario, an array of battery tray design solution, manufacturing process solutions available in different weight, cost and performance characteristics are available in the industry.

With a variety of battery tray design solutions for EV battery trays and also body side structure solutions available in the market, new theories regarding the subjects are emerging every day in the market. The OEM manufacturers are finding solutions, but they are far away from setting up any standard format. Among the most popular solutions they are pondering over are – Can energy management structure be put in the battery tray, in floor structure or surrounding vehicle body side, or both? The manufacturers are finding solutions like what manufacturing solutions, materials and architectural design offer the optimum weight, cost balance for the customer regulatory landscape and customer? What material, design, and associated manufacturing process enable the optimum weight, cost, and performance balance?

EV weight

In modern EV vehicles, there is a lot of emphasis on performance optimised body, battery tray structure solutions and cost of the vehicles. However, a point that cannot be ignored while meeting these standards is the weight of the vehicle. In modern vehicle designs, there is a lot of emphasis on light weighing. Vehicles having lower weight help improve dynamics and vehicle performance to quite a few notches. However, causes and parameters that force ICE and EV vehicles to switch to lower weights are different. Emissions regulation is the main cause for the lightweighting trend of ICE vehicles. Regulations are stringent and often keep changing fast. As a result, the ICE vehicle industry has developed a deep understanding of different vehicle technologies that help them meet important future emissions targets like the relative cost of competing technologies such as aerodynamic aids, engine stop start, low friction engines and light weighting. In nutshell, the equation between weight, fuel consumption (emissions), emissions reduction potential and solution cost is widely known.

As emissions is a problem for ICE engines, the light weight of the vehicles keeps emissions levels in check, the same is not the problem with EVs. Carbon emissions is not a cause for concern for EVs, still, their weight is kept low as it not only improves a vehicle’s performance but also its dynamics.

When it comes to ICE vehicles, less weight leads to less energy required to move and hence lesser emissions. However, in case of EVs, lightweight leads to less energy required to move, which in turn, translates into a longer range of travel.

Unlike ICE vehicles where lighter weight vehicles can reduce emissions levels considerably, lighter weight EVs won’t have much increased mile range. A reduction of 10kg of weight in EVs will add one mile to its range. Since EVs have complex structures, weight impact on range can be further affected by technologies such as regenerative braking.

Hence, it is suggested that instead of focusing more on reducing the weight of EVs, the manufactures should spend more on technological aspects that can extend range (such aspects can be aerodynamic aids, battery technology, energy management applications, motor and inverter technology, etc.).

Automobile engineers have to come up with more ideas to improve EV motors, battery technology and power management equipment. These advancements can be more cost effective than spending on developing lightweight materials.

Multi-material skills

Factors like weight, optimum cost and performance body structure solutions have been challenges to traditional steel body structures. The evolution of aluminum alternatives provided multi-material solutions as the lighter weight also provided the optimum solution.

For EVs also, instead of finding lighter materials to avoid emissions-related penalties, the manufactures are focusing on finding material combinations that cover new EV requirements and potentially more severe safety load cases.

A number of issues in EVs such as stiffness, energy absorption characteristics of various materials strength, and associated manufacturing process affinities, can be handled by a thorough understanding of multi-material solutions.

For example, the solution of challenging side impact requirements and associated battery pack protection can be done through extremely high strength materials like ultra[1]high strength steel, which can resist crush and transfer impact energy.

However smart a solution it may sound, the problem with EV multi material challenge is that not all automotive companies have multi-material engineering skills and understanding.

Also, the companies need in-depth understanding of safety critical applications, validation skills and associated early simulation alongside other important factors like:

▪ Advanced steels - Understand UHSS, AHSS and emergent Gen 3 steels, and also design and manufacturing integration challenges such as delayed fracture potential, welding, formability, corrosion performance and available coatings.

▪ Aluminum application - Alloy application, cost drivers and development potential, extrusion and casting process understanding.

▪ Composite solutions – volume affinities, emerging cost curves, directional property opportunities. Composite material type, failure prediction and utilization cost impacts

Engineering operational challenges for EVs

Though the EV industry presents a lot of technical challenges for things like equipment and the ecosystem of the industry, the transition from ICE to EV also depends on how we manage the New Development Process (NDP). The young EV ecosystem cannot ignore the traditional ICE NDP process and can cut its teeth under the umbrella of the old establishment’s practices. For India, budding start-ups in the EV industry can learn a lot from established carmakers for the NDP process.

NDP in EVs

While traditional EV OEMs are working on challenges like the manufacturing of battery material, complex equipment, operating process and vehicle developmental skills, a number of EV OEMs working on technologies like car software development, artificial intelligence are also gaining prominence. The new players with their core expertise are providing business models and services that can restructure the traditional industry value chain. As the Indian industry needs to quicken its pace by leaps and bounds, local traditional EV OEMs should see it as an opportunity and work with newbies to execute the latest advancements in car development.

There have been major changes in vehicles’ electronic, electric and software development in the last five years. Traditional Indian OEMs can incorporate these skills from new OEMs to fast-track car development. New OEMs, on the other hand, can considerably improve on their skills through inputs from traditional OEMs that have vast knowledge of manufacturing, operating processes and complete vehicle development skills.        

Collaboration

In the fast emerging domain of EVs, a number of collaborations can be done at the organisational level for supply base across local and global scales. Such collaborations will help in the product development ecosystem.

Traditional OEMs can join hands with new ones to streamline their advanced technology and services-related requirements. In return, new OEMs can get from their established partners the opportunities to acquire new manufacturing capabilities and supply bases, and most importantly, in-house funding.

Such investments will draw many new partners with core expertise who can also share the development cost of the joint platform, manufacturing and battery technology.          

With more options of new OEMs having core expertise in areas other than that of traditional OEMs, many OEMs can shift focus from transmission manufacture and in-house powertrain to battery, motor and power management module purchase. Such collaborations will quicken the pace of aspects like manufacturing and sell.

IP landscape

The EV IP landscape is not static and it is witnessing changes every other day. New norms are being introduced from the planning to manufacture level locally and globally. Since a lot of companies are working on developing technologies and acquiring new skills in EV production, a number of new patents are being filed in areas like body structure, battery tray and safety structure space. Indian companies exploring EV opportunities must have dedicated teams to keep tab with the latest patents and IP properties.

India is a new industry where any effort wasted, after knowing that a particular technology already has a patent in place, may cost companies dear in terms of time and money. The continuous scanning of IP awareness will identify areas where companies don’t have to focus. These efforts will save not only money and time but also highlight valuable IP opportunities that can help companies earn further revenue.         

Lack of battery charging stations

EV battery charging is quite a major concern in India. Most of the EVs are charged at homes, while only a small percentage of vehicles go to charging stations. As per a Society of Manufacturers of Electric Vehicles report, there were 1,800 charging stations in India in March 2021. The report further said that the country needed 400,000 charging stations for two million EVs that would possibly hit the road by 2026. This huge gulf reflects where our charging infrastructure stands and how fast we need to move to meet the demand.

Most of the EVs ply on the roads of big cities and the EV revolution is yet to touch towns and villages in India. Even in big cities, the majority of EVs get charged at home-installed charging plug points, where the number of vehicles outnumbers plug-in points considerably. People staying in multiple storey buildings find it nearly impossible to charge their vehicles at home in lack of required charging infrastructure. EV manufacturers and the government need to come up with innovative ideas to meet the demand for more charging stations/points in the future.

Price anxiety

This is the biggest issue that EV manufacturers are facing after overcoming manufacturing challenges. Due to the high price of lithium batteries, most EVs cost more than double the price of their ICE counterparts. The average starting price of an EV in India is near INR 13 lakhs, whereas a regular fuel-powered car costs around INR 5 lakhs. This is the gap that EV manufacturers need to bridge if they ever want to make their products popular in the country. India is a country where the majority goes for vehicles under the INR 10 lakhs range. They will find it hard to digest to own an INR 13 lakhs product when they can get the ICE version of the same in under INR 5 lakhs.    

Most EV manufacturers are falling outside the FAME II scheme

The central government launched the EV-focussed FAME II scheme in 2019, which offers incentives to the manufacturers who use 50% locally produced equipment in their EVs. India is heavily dependent on foreign equipment and hence local EV manufacturers fall short of getting incentives.

Likewise, expensive EVs meet the criterion of FAME II norms, while low-speed electric two wheelers don’t. The government has to change the criteria to bring low-budget vehicles under the ambit of its incentive schemes. 

Lack of EV options

All leading automobile companies along with a number of start-ups, are launching their EV models, but in terms of the number of choices, they are nowhere near to their ICE counterparts, which provide ample model opportunities for the Indian consumers to choose and pick. EV manufacturers also need to add more variety to their fleet of EVs.

Skilled workforce to meet EV manufacturing demand

India’s skilled workforce is the key to success in its ICE vehicle industry as it produces vehicles millions a year. But the country’s EV workforce is small in size and inexperienced to meet the burgeoning demand of the future. Even if the country is looking for foreign investment, it needs skilled local people to meet the workforce demand of EV manufacturing. People should be trained in large numbers to help India manufacture EVs at a mass scale and emerge as a leading EV force.