Why electric cars & buses have not taken off in India on desired lines?

Why electric cars & buses have not taken off in India on desired lines?

Why have electric cars & buses not taken off on desired lines?

Sale of electric cars and electric buses in the country leave a lot to be desired

The Indian electric vehicle (EV) industry continues to sit on the ‘nascent’ tag not withstanding all the subsidy push accorded by the government via the FAME II Scheme. Of course, sales of electric vehicles across the country did clock a 20 % growth for the financial year 2019-20 - posting sales of 1.56 lakh units over 1.26 lakh units registered over 2017-18, but that largely has been driven by electric two-wheelers (scooters), especially the city speed e-scooters (having a top speed of 40 kmph) and low-speed electric scooters (having a top speed of 25 kmph) that do not need registration from the transport department.

Gill believes that the year 2020-21 will witness a major upswing in the sales of such e-scooters post the settling of the Covid crisis as the commuters will shun away from public transport and move towards affordable and zero polluting electric scooters. However, this rosy picture of electric scooters is in stark contrast to sales of electric cars and electric buses that haven’t really taken off on desired lines.

Sales of electric cars have dropped marginally at 3,400 units for 2019-20 as compared to 3,600 units over 2018-19, which is a tad surprising given the fact that the country’s EV car space is no more just about Mahindra e-Veritos and Tata Tigors – it has seen the roll-out of various EVs products such as Hyundai Kona, MG ZS EV and Tata Nexon EV. “Electric cars have witnessed a slight decline because of the bulk buyer EESL not buying that many cars in 19-20 as they did in the previous year. Further, Mahindra decided to discontinue its e2o Plus last year, which was a popular car and the new cars from Hyundai and MG Motor arrived in the market towards the end of 2019. It is owing to these factors that the total volumes of electric cars were not high,” explained Sohinder Singh Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV) & CEO, Global Business, Hero Electric.

The SMEV DG feels that the sales of electric cars will be good this year. “With cars like Hyundai Kona, MG ZS EV and new offerings from Tata an Mahindra hitting the market, I have reasons to believe that the sales of electric cars will go up significantly this year. The introduction of high range affordable E taxis will also give major impetus to this segment,” he exuded hope.

On the electric buses front, the industry witnessed a marginal increase with buses clocking sales of 600 units for 2019-20 over 400 units clocked in 2017-18. “Electric buses will always be a government agenda with many levels of decision-making leading to slow release of funds and buyers finding the buses costly despite substantial subsidy. State transport undertakings (STUs) are already cash-strapped and prefer an opex model, wherein they can pay operators per kilometer,” he noted. 

Gill believes that in the Indian context electric buses will be tough to introduce in large numbers in the next 1 or 2 years, specially in the long-haul and overloaded segments. "I am of the opinion that electric buses should first be introduced in the light to medium duty applications like metro feeder small buses, chartered buses, etc in the most polluting parts of the cities to create an impact and visibility," he observed.

One hopes that with consumers becoming more conscious of pollution arising out of the ICE vehicles the government will also refocus on how to bring in more non-polluting EVs on the roads  coupled with a variety of new electric vehicles slated to be launched in 2020-21 - all these will pave the way for a new bout of momentum to EV sales in coming times.