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Electric Vehicles In India: Analyzing The Opportunities For Foreign Companies In India’s EV Sector

In our previous post where we talked about how electric vehicles as a sector is projected to boom in India thanks to the urban Indian millennials, it’s equally important to assess the ground-work laid for the sector in the country and the opportunities it provides to encourage business engagement between India and other countries.

With plans to launch their own e-vehicles in India, automobile companies like Maruti Suzuki, Tata, Hyundai, Nissan, and Mahindra have showcased their prototypes for the same and are currently looking at launching them in and around 2020.

As the number of electric vehicles in India continues to rise steadily, the need to have complementary charging mechanisms and power stations for these vehicles becomes a priority. Although, the Central Government has stated that the charging facilities will be provided as a different service and won’t be treated as sale of electricity by the Government, there still needs to be a significant amount of infrastructural development to ensure that there is a smooth transition from conventional fuel-powered vehicles to electric alternatives.

Various examples for the same have popped up in recent times, where companies have installed charging stations in definitive premises or in public areas to facilitate electric charging. Hyderabad has witnessed it first-hand, as Finland-based company Fortum has set up a couple of charging stations at 2 different Indian Oil petrol pumps for the public to use (officially, Nagpur was the first in 2017 to have a charging station as part of the popular cab service Ola’s pilot initiative for launching 200 EVs).

The city of Mumbai has also seen the EV wave, with Tata launching its charging stations in the city. Source: Autocar Professional

One might argue that this is a slow start but what else do we expect when we’re dealing with a population which has inherently depended upon quintessential fuel-powered vehicles?

After all, the transition is what matters and a change in infrastructure will follow in hot pursuit as an evident need.

As stated by IBEF/Livemint, French automobile giant Renault already has plans to make India a top exporter of automotive parts for EVs as it’d not only inspire local production, but it’ll also put India in a position as a global leader for the EV sector.

In terms of training the local workforce for maintenance, services, and overall vehicular quality management, Canadian company MakerMax has announced its entry plan in India by offering skill development in terms of electric vehicles to ensure a healthy turnout of technically qualified and skillful engineers for the EV sector. For starters, this will ensure a positive post-buy experience for the consumers considering they’ll have enough technical help at their disposal for vehicular maintenance.

In terms of production, considering India will require foreign investment or foreign intervention to produce electric vehicle components like lithium-ion batteries, there is tremendous scope for foreign companies to partner with India and share resources, manpower and knowledge. As of January 2019, there already exist plans in the pipeline to give India its own Gigafactory for electric vehicles (A Gigafactory is a production unit which manufactures batteries at gigawatt hour level).

Magnis Energy Technologies is reportedly at the helm of the proposed project, where the company has initiated talks with the Ministry of Heavy Industries and Public Enterprises of the Government of India to build India’s first LIB (Lithium-Ion Battery) Cell Gigafactory, as part of a collaboration between BHEL (Bharat Heavy Electricals Limited) and LIBCOIN (in which Magnis has a 20% non-dilutive stake). This factory will begin range from 1 GWh and can range up to 30 GWh.

As for Indian companies, Delta Electronics plans to establish a market for itself and become an industry leader via its product called the Bharat Charger, which powers cars like the Mahindra Verito and the Tata Tigor EV, and the company has plans to expand in India after its reported success in exports for the Western market. The company has already inaugurated its 3rd factory in the Hosur region of Tamil Nadu, which will further encourage local production of electric vehicle components.

Further echoing the statement made in our previous post that the urban millennials are increasingly preferring function over fashion and the fact that they constitute a large part of the Indian demographic, the leaps made in India’s EV sector are being backed by strong deals and foreign help as well. And, this is the push which the country needs, since the need to transform and become eco-friendly is over-weighing the will to do so but at the same time, considering a lot of Indians are now becoming aware of the environmental damage and the need for environmental protection, this has opened doors for multiple countries and their respective companies to partner with India.

This process has the propensity to directly translate into not just productive and lucrative partnerships, but the formation of a global community which moves towards a cleaner and pollution free future.

Written By

Sahib Singh, in collaboration with the Coinmen Research Team

 

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