- A recent report by the Indian government’s think tank, NITI Aayog, and Technology Information Forecasting and Assessment Council (TIFAC) forecast 100 percent penetration of electric two-wheelers in the Indian market by 2026–27 in an optimistic scenario.
- The report has developed eight scenarios to highlight the future penetration of electric two-wheelers in the country.
- The report, however, states that in a scenario where current incentives are withdrawn by 2024, India will achieve only 72 percent penetration by 2031.
- According to industry experts, safety and range are two main hurdles in the country’s transition to electric vehicles.
It was a busy Sunday afternoon in mid-July and Ravindra Swapnil Prajapati’s showroom selling electric two-wheelers in Vidisha, Madhya Pradesh was overflowing with customers. For the 50-year-old poet-turned-businessman, the journey of the last two years – from a time when he had only four customers to a rush of customers now – has been a rewarding one.
“In 2020, I read a newspaper report which said electric vehicles (EVs) are the future … and I decided not to miss this chance. It was easy to get an e-bike agency of a leading two-wheeler manufacturer compared to its agency of petrol-run two-wheelers,” Prajapati told Mongabay-India.
“It was my love for nature that inspired me to enter the e-bike business and in just two years, the business has grown manifold and will continue to grow in the years to come,” said Prajapati, who is also the founder of a non-governmental organisation that promotes organic farming.
His optimism of the sector is reflected in many reports. In June 2022, the Indian government’s think tank, NITI Aayog, and Technology Information Forecasting and Assessment Council (TIFAC) released a report, Forecasting Penetration of Electric Two-Wheelers in India that predicts the future of electric two-wheelers using eight different scenarios – challenged diffusion, performance-driven, low battery cost, technology-driven, incentive-driven, battery cost challenged, same performance, and optimistic scenario. Among these, the optimistic scenario predicts 100 percent penetration of electric two-wheelers by 2027. Maximum penetration, of 71.54 percent by 2031, is in the technology-driven scenario, even if demand incentives are withdrawn after (financial year) FY 2024, notes the report. “With no technological improvement and reduction in battery cost, a penetration level of 21.86 percent only can be achieved even if incentives are continued till FY 2031. A combination of technological improvement and incentives can achieve 100 percent penetration,” said the report. Under technology driven scenario, the report projects how technology can play an important role in reducing the cost of the battery and other components.
The report provides insights into the required infrastructure, manufacturing capability, policies, and technology-development priorities for EVs. It noted that technology improvement and battery cost reduction are crucial for the electric mobility industry.
The report said that the sale of electric two-wheelers may cross 220 lakh units (22 million units) in FY 2028–29 under the optimistic, same performance and battery cost challenged scenarios. It may reach 180 lakh units (18 million units) under the technology-driven scenario. Under the incentive-driven scenario, the sale is expected to reach 55 lakh units (5.5 million units) in FY 2031.
Read more: India should focus on procuring minerals crucial for powering EVs: study
Why two-wheelers are important in India
In India, two-wheelers are the preferred mode of personal transport for most of the population. In fact, India is one of the biggest and fastest-growing two-wheeler markets, according to India Transport Energy Outlook released by the Council On Energy, Environment, and Water (CEEW), a Delhi-based non-profit policy research institution, in July this year. The share of Internal Combustion Engine (ICE) two-wheelers & three-wheelers is 84 percent of total vehicle sales in India.
Two-wheelers are more popular in cities where public transport is inadequate. According to 2016 research, Intermediate Public Transport (IPT), which mainly includes three-wheelers and e-rickshaws, is an essential mode of urban travel. IPT plays a significant role in providing transport services in smaller towns and feeder modes in larger cities lacking adequate public transport infrastructure.
According to CEEW, in 2020, two-wheelers consumed 31 percent of the total passenger energy, more than any other mode. Buses and three-wheelers combined consumed 29 percent of the total passenger transport energy while four-wheelers accounted for 27 percent of the total passenger energy despite having a lower share in the entire passenger transport activity due to the low fuel efficiency of four-wheelers compared to other modes per passenger.
The future of electric two-wheelers
The future scenarios of electric two-wheelers have been constructed on the basis of three major factors that influence the market penetration of electric two-wheelers: demand incentives, cost of the battery, and vehicle performance in terms of both range and power.
“More and more customers want to switch to electric bikes but their demands need to be fulfilled. Customers want more power in terms of high speed, battery range, and built quality,” Prajapati told Mongabay-India.
In 2020, the CEEW analysed the two-wheelers penetration and found a five percent EV penetration in two-wheeler sales by 2030 in a business-as-usual (BAU) scenario and a 35 percent penetration of EVs in a more optimistic scenario. Post pandemic, there has been a 10-times increase in the penetration of EVs in the two-wheeler category, reaching almost three percent penetration (partially due to higher fuel prices and awareness) for the first time in 2021. The trend has continued in the year 2022, averaging around 3.5 percent as of July 2022.
“To achieve a 100 percent EV penetration target by 2030, some additional steps must be taken to increase the demand,” said Himani Jain, Senior Programme Lead, CEEW. “A roadmap beyond FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) has to be chalked out as a long-term solution in addition to setting targets for original equipment manufacturers (OEM) and fleet operators to phase out petrol two-wheelers. Currently, the major driver for EV growth has been the FAME subsidy as highlighted in the NITI report as well,” Jain told Mongabay-India.
In 2015, the Union Ministry of Heavy Industries started the FAME India Scheme to promote the adoption of electric/hybrid vehicles in India. The first phase of the scheme was available up to March 2019 with a budget of Rs. 895 crores (Rs. 8.95 billion). This phase of the FAME India Scheme had four focus areas – technological development, demand generation, pilot project and charging infrastructure components.
Under phase-II of the FAME Scheme, 231,257 EVs have been supported till February 2022 at a cost of about Rs. 827 crores (Rs. 8.27 billion).
“Financial incentives for battery swapping providers to enhance the charging ecosystem … Parking and the time taken to charge electric vehicles are key barriers to EV penetration, especially for smaller vehicle segments like two-wheelers. Battery swapping technology addresses this challenge and promotes faster refuelling for the vehicle,” said Jain while pointing out critical hurdles for EVs.
The NITI Aayog report emphasises that “during the initial stage, due to low level of electric vehicle penetration, a higher ratio of charging points to electric vehicles will be required to instil confidence in the customers’ minds.”
“While at a later stage, the absolute number of charging points should increase, this ratio may even come down. Such a scenario, in any case, is expected to happen,” it said.
Read more: Will an affordable public charging ecosystem boost electric mobility in Delhi?
Range of EVs is a major challenge
The range of EVs (how far they can go after charging) is another major challenge and according to Prajapati, it has emerged as a key challenge. “Our customer needs vehicles which at least have a range of 150 kilometres (per charge).”
Sudipta Biswas, a post-doctoral fellow of Ben Gurion University of the Negev, Israel, emphasised that, “Range can be improved by optimisation and focused research.” Biswas worked under Amreesh Chandra, a professor in the department of physics at the Indian Institute of Technology Kharagpur who has been researching to develop energy storage technologies. The technology is based on Na-ion, and his team has developed many nanomaterials. Scientists have used nanomaterials to develop Na-ion-based batteries and supercapacitors, which can be rapidly charged. With further development, e-vehicles prices can be reduced by nearly 25 percent.
“Our research aims to search for an alternative to the lithium-based storage system. The range depends on the volume of the battery as it determines the energy of the storage device. More research and optimisation can increase the energy density of a device, which in turn will increase the range of the vehicle,” Biswas explained.
“Another technological improvement, along with Na-ion batteries, would be on other metal ion-based batteries. Those technologies could be Al-ion or Mg-ion batteries,” he added.
Scientists have investigated metals such as sodium, potassium, magnesium, aluminium, zinc, and calcium to replace lithium in batteries. Al-ion battery or aluminium-ion battery is a non-lithium battery in which metallic aluminium is used as the negative electrode. It has an exceptional rate in both charging and discharging. Similarly, magnesium has many of properties that would make for an attractive replacement for lithium.
The improvement in technology is crucial because it can heavily contribute to the market penetration of EVs. According to the NITI Aayog’s report, improvement in the vehicle’s performance over three years, along with the improved battery, can drastically increase penetration, overcoming the impacts of withdrawal of incentives. It said battery cost is another important parameter, and technology can play an important role in reducing the cost of the battery and other components, many of which are presently imported.
“In the technology-driven scenario, if an R&D programme manages to enhance the range and power of electric two-wheelers by five percent annually, between FY 2023-24 and 2025-26, and by 10 percent in FY 2026-2027, then the penetration of electric-two wheelers may reach about 72 percent in FY 2031-32 even with no extension of demand incentives,” said the NITI Aayog report.
However, what could impact the growth of EVs is the issue of safety that gained prominence after several pictures and videos of safety issues with EVs went viral in recent times.
To ensure safety standards, CEEW’s Jain said “Automotive Research Association of India (ARAI) and National Automotive Testing and R&D Infrastructure Project (NATRIP) certification standards could be made more stringent.”
“This would enhance the standards for quality checks and ensure the components (quality of cells, proper connection checks to avoid short-circuits and thermal sensitive batteries) are in accordance with the Indian operational conditions (hot, rainy, extreme cold in Northern India). Further, robust quality checks and monitoring are required in vehicles sold,” she said.
While Prajapati added, “It (safety issues) is a major setback for the market. However, we are fortunate that no such case occurred with the manufacturer I work for, but safety has become a big concern with electric vehicles. My sale is skyrocketing even when two-wheelers’ credibility is questioned due to safety issues. I am associated with a leading manufacturer, and there are no cases of fire due to high safety standards.”
“I believe every petrol two-wheeler in India will be replaced by battery-powered two-wheelers very soon. I predicted the change, gave up my writing career, and now reaping the benefits of being an early adopter in my city,” he concluded.
Banner image: Electric scooters in the manufacturing process. One of the eight scenarios predicts 100 percent penetration of electric two-wheelers by 2027. Photo by Gnoeee/Wikimedia Commons.
