The automotive industry – well over a century old – is currently experiencing three radical paradigm shifts simultaneously – the electrification of the drivetrain, the emergence of autonomous driving technologies, and a gradual consumer shift from 'ownership' (of cars) to 'access' (to mobility). The first is a technology shift from within, the second a technology impact from the outside, and the third, a consumer mind shift. In this article, Kartik Gopal, Head –Strategy and Business Planning, Mahindra Reva Electric Vehicles Pvt Ltd examines the first of these three shifts, especially in the Indian context. The areas covered include global developments in the electric vehicle (EV) domain, the factors aiding or limiting growth of EVs, some common misconceptions and new usage models for EVs.
EVs have had a chequered history. They were among the earliest forms of automobile technology to be invented in the mid-1800's. However, for most of 20th century, they were considered niche technologies incapable of mainstream use. A decade ago, there were hardly any global automobile manufacturers (OEMs) investing in plug-in EVs. But today, almost every major OEM is investing in electric drivetrain technologies for their products, or has already introduced products commercially. Global sales of hybrid and plug-in vehicles has been the highest ever in 2015, with plug-in vehicle sales expected to cross 0.5 million in 2015.
roads. Subsequent models introduced improved drivetrains and batteries. In late 2000s a few manufacturers also started selling electric 2-wheelers in India. In 2013, Mahindra e2o was launched which became the first BEV in India to use lithium-ion batteries and other first-in-class features like smartphone app based monitoring and control.
The Government of India introduced the "Faster Adoption and Manufacturing of Hybrid and Electric Vehicles" or FAME scheme for promoting hybrid and electric vehicles in 2015. As a result, the EV industry in India has seen an uptick in investments and product announcements. Maruti Suzuki introduced the mild hybrid Ciaz, Tata Motors announced the impending launch of hybrid and electric vehicles, while M&M is conducting pilots with the electric Maxximo minivan. Investments into start-ups can be an important indicator of vibrant technology development activity. In this respect, Ather, a home grown start-up developing an advanced electric 2-wheeler, received investments into product development.
Globally, EVs have made significant strides in the last decade from being an ultra-niche category to outperforming internal combustion engine (ICE) products. The Tesla Model S is one of the safest production cars ever and one of its variants is also one of the quickest (in terms of 0-100kmph acceleration). The market share of plug-in EV's is expected to reach around 1% of light passenger automotive sales in the US. The Chinese EV market is growing at the fastest rate for any country in the world, aided by strong government incentives.
What is causing this increased uptake in EV's globally?
Environment: Increased public consciousness on environmental issues has resulted in an increasing willingness among buyers to consider 'greener' alternatives.
Emission norms: Increasingly stringent emission norms in major automobile markets globally. Emission norms address two broad categories of emissions – CO2 emissions that contribute to global warming, and particulate matter emissions that lead to smog and consequent health issues in cities. BEV's are the only automobile technology available today that can completely eliminate both issues (if charged from renewable power).
Energy storage: Technology improvements in the field of electric vehicles, in particular, the emergence of lithium-ion batteries, has accelerated the development of EV's with mainstream capabilities (longer range, lower charging times, longer life, etc.).
Economic incentives: Financial incentives from national governments through EV purchase incentives, investments into public charging networks, tax breaks, etc. In India, the FAME scheme provides a comprehensive policy to encourage EV adoption in the country.
Energy security: A period of high oil prices from 2008 to 2014 led to national concerns on energy security, spurring governments to aid alternative energy vehicles and intensified investments by OEMS into development of alternate fuel technologies.
Policy: Countries that have shown rapid growth in EV adoption have very favourable government policies to encourage EV uptake. Example countries include Norway, China, UK, US and France. Two key levers of support include purchase incentives that lower the upfront cost of the EV, thereby mitigating the above mentioned factor, and secondly, significant investments into public charging networks. The latter is particularly important for growth of plug-in vehicles, which have higher fuel saving and environmental benefits compared to equivalent strong and mild-hybrids.
Perception: The public discourse around electric vehicles is still rife with several misconceptions about EV's that create misgivings in the minds of people considering electric vehicle options. We will elaborate on these a bit more in the next section.
Myth 1 – "EVs cause more pollution in India because electricity is generated from coal fired plants". To examine this we consider two aspects of "pollution" – CO2 emissions and particulate matter emissions.
With regards to CO2, the data published by the Central Electricity Authority indicates that the Indian electricity grid produces an average of 0.82 tonnes-CO2/MWh. Based on this data and even after accounting for 22% transmission and distribution losses, it can be calculated that the Mahindra e2o has a CO2 emission of approximately 102 gm CO2/km when charged from the grid. In comparison, a typical small hatchback will emit approximately 130 gm CO2/km. In other words, a battery EV can yield around 30% lower CO2 emissions even when powered from the current grid conditions in India!
With regards to particulate matter, due to their zero tailpipe emissions, BEVs are an ideal solution to eliminate particulate matter emissions caused by the transport sector.
Myth 2 – "India does not have enough electricity to support EVs". It is possible that this myth is an outcome of a lack of understanding on how energy efficient EVs are, and of the factors affecting energy demand in the country.
BEV energy efficiency: Let us take the example of a common lifestyle product – the air conditioner (AC). Even a small 1-ton, 5-star energy efficiency AC will consume approximately 1 kWh of electrical energy per hour of operation. This is the same amount of energy required for a BEV to cover ~8-10 kms! In other words, the energy consumed by an AC in 5-6 hours of operation is the same energy that an average car owner, driving ~40 kms/day will consume in a BEV!
Sources of energy demand: In 2015, over 3.5 Million ACs are expected to be sold in India. To put things in perspective, this is over 3000 times the number of EVs likely to be sold in the same period in India. Taking into account the energy efficiency of BEVs as described above, it follows that the impact of a lifestyle product on energy demand today far exceeds the impact that EVs will have even a decade from now.
These views are reinforced by an independent study that was published in the Government of India's National Electric Mobility Mission Plan 2020 (NEMMP2020) document. It clearly brings out that even if the government were to meet its ambitious EV penetration targets for 2020, the net additional electricity generation capacity required is only around 0.33% of existing capacity or approximately 840 MW. The current installed capacity stands at around 256 GW. In summary, the country's rapid urbanization and industrialization will place far greater demands on generation capacity than EV's will even in a decade from now.
It is worth noting that contrary to the above myths, EVs can actually benefit the electricity grid. Most EVs charge at nights, when the load on the grid is low, thereby improving grid utilization during off-peak times. In future,during periods of high energy demand, EVs can feedback energy to the grid through vehicle-to-grid technologies. This will further help balance the grid load patterns – EVs can charge during off-peak hours at night and put it back when the energy demand is high during the day. Furthermore, battery packs that have reached end-of-life in the vehicles can still be used for stationary uses. Experimental developments along these lines are being actively pursued in several advanced economies.
The global discourse on electric vehicles has been largely focused on personal use vehicles. However, we believe that EVs, in particular BEVs can play an important role in commercial fleet applications, where the total cost of ownership matters more than just the upfront cost of the vehicle. Though BEVs have a high upfront cost due to the high cost of batteries, they also have a very low operating cost. An e2o has a running cost of ~`0.6/km compared to ~`3/km for a diesel hatchback. This fact can benefit commuting applications like corporate employee transportation where vehicles run 200-250kms per day. Start-up companies are taking advantage of this fact and creating new business models using BEV's in such applications.
Recently, Mahindra Reva worked with a start-up in Bangalore, Lithium Urban Technologies Pvt Ltd (Lithium, in short) to launch the e2o in the IT/ BPO employee transport segment. By some (unconfirmed) estimates, there are ~35,000 diesel hatchback taxies plying in Bangalore alone that are used by IT companies to shuttle employees between their homes and offices. These vehicles run over 200kms each day on fixed routes, making it easier to provision and schedule charging. A fleet variant of the e2o, capable of being fast charged in an hour, coupled with telematics based remote monitoring and control features has been successfully deployed by Lithium for use by various corporates. This is possibly a first-of-its-kind use case for EVs in the world, and is likely to help establish sustainable business models for EV use in the country.
At a broader level, introduction of battery electric vehicles into fleet applications and public commuting has several advantages. Vehicles in such segments are focused on intra-city commutes – an ideal segment for BEVs. In many of these segments, the routes are fixed, making it easier to provision for charging infrastructure. Such segments also require the vehicles to run large distances per day, thereby playing to the advantage of BEVs when coupled with fast charging networks. Investments by the government into charging infrastructure can benefit these applications and also the public at large, thereby laying the foundation for a widespread use of electric vehicles in public commuting.
Deteriorating air quality in cities in India has become a major issue recently. Government and courts have intervened to introduce several initiatives and mandates to help address this issue. In this context, battery electric vehicles score enable zero tailpipe emissions mobility, eliminating particulate matter concerns entirely. BEVs are ideal for intra-city commutes and thereby form an ideal solution for the urban air quality concerns.
Globally, governments and industry have recognized that electrification of the automobile is a foregone imperative in the 21st century. The former Saudi Oil Minister Sheikh Yamani is said to have remarked: "The stone age came to an end not for lack of stones. And the oil age will come to an end not for lack of oil". Electric vehicles are at the epicentre of a quiet revolution that is slowly changing the automobile industry today.