NEW DELHI: The spike in oil prices following US move to impose sanctions on Iran has given new momentum to Indias ambitious e-vehicles programme that aims to reduce oil imports, cut emissions and boost energy security.The government is already giving a big push to e-vehicles because of its commitments at global forums to control carbon emissions and Indias high dependence on imports to fuel its economic growth.
Officials said the government was on track to increase the use of battery powered vehicles, but analysts said it was time review policies on the sector.PwCs Partner Kameswara Rao said electrification of transport, whether public or personal, requires a fundamental rethink of policy.Thats because of its many positive externalities such as energy security, clean air, and inflation control which dont get counted together.
On the other hand, the infrastructure needed often gets underestimated.
Without scale, the ecosystem will not develop, and so an aggressive government programme is key to achieving real benefits of electrification of transport, he said.The National Electric Mobility Mission Plan and Faster Adoption and Manufacturing of Electric Vehicles (FAME) aims to get 6-7 million electric vehicles on the roads by 2020.A study conducted by Niti Aayog shows that India would need nearly 1.6 billion metric tonnes of oil equivalent of petrol and diesel to fuel its passenger mobility sector from 2017-2030.
At a conservative crude oil price estimate of $52/bbl (lower than todays prices), this oil import demand would cost nearly $670 billion or Rs 44 lakh crore over the period 2017-2030.
Assuming India continues to import 80 per cent of its oil, this could represent a total import bill of roughly $550 billion or Rs 36 lakh crore.In contrast, meeting Indias EV ambitions through 100 per cent domestic manufacturing of batteries would require at least 3,500 GWh of batteries at a wholesale cost of $300 billion (Rs 20 lakh crore) from 2017-2030 less than half the cost of the avoided oil imports.Battery manufacturers could seize 25-40 per cent of the markets value by assembling battery packs in India and importing only battery cells.
In this case, Indias total value of imports for EVs would be between $180$225 billion or Rs 12-15 lakh crore.India may still be consuming nearly Rs 17 lakh crore worth of petrol and diesel, this would still represent an import saving opportunity of Rs 4 lakh crore for India, it said.
Tata Motors and Mahindra Electric last year bagged tenders for supply of 10,000 e-cars.
A same size tender was floated by EESL in March.