In a nation of about 150 million drivers, only 130 electrical SUVs were sold to dealers through August. That slow pace is emblematic of the difficulties carmakers face in establishing an electric foothold in the fourth-biggest auto market, even with committed government support. This SUV sells for about $35,000 while the average Indian earns about $2,000 a year — and the best-selling gas guzzler costs $4,000. This high price only kicks off the conversation about why EVs aren’t gaining traction in India — there’s also a lack of charging infrastructure, a reluctance by banks to finance purchases and an unwillingness among government departments to use EVs as directed.
Barely more than 8,000 EVs were sold locally during the past six years, according to data compiled by Bloomberg. China sells more than that in two days, according to BloombergNEF projections. The segment still isn’t making meaningful strides more than four years after the government started promoting cleaner vehicles for one of the world’s most-polluted countries. In February, Prime Minister Narendra Modi’s administration committed to spending $1.4 billion on subsidies, infrastructure and publicity.
“The affordability of electric cars in India is just not there. The government or the vehicle companies expect that in the next two to three years there will be any real buying of electric vehicles.”
Right now, though, consumers pass over electric cars for bigger, longer-range and cheaper gas guzzlers, said Vinkesh Gulati, vice president of the Federation of Automobile Dealers Associations, which represents more than 80% of automobile dealers in India. More than half of the passenger vehicles sold in India last year cost $8,000 or less, according to BNEF. Electric cars won’t achieve price parity with gasoline-powered cars until the early 2030s, BNEF said.
Yet even for those who can afford the such vehicles, plugging in is problematic. Nidhi Maheshwary, a 40-year-old finance professional working near New Delhi, wanted to buy an EV to show her children an example of environmental responsibility. So when Hyundai launched the Kona, Maheshwary ordered one. Sounds easy, but it didn’t turn out that way.
Almost immediately, she got into a spat with neighbours about charging the SUV in her apartment building’s basement lot. The residents’ society said it posed a fire risk — even though Hyundai engineers and the fire department said it was safe. So Maheshwary charges the car at her office while weighing potential recourse against those neighbours.
The government, both federal and local, will have to offer help for EVs to be adopted in the mass market. Modi’s budget in July included incentives such as reduced taxes, income tax benefits and import duty exemptions for certain EV parts. The first beneficiaries will be the ubiquitous scooters and motorcycles — with subsidies meaning to support sales of 1 million two-wheelers, compared with 55,000 electric cars.
Yet the government still needs to practice what it’s preaching. Energy Efficiency Services Ltd., a joint venture of state-run companies responsible for replacing state vehicles with EVs, awarded its first tender in September 2017 for 10,000 cars. But as of July, agencies had accepted only 1,000 of them. Now EESL is offering the vehicles to taxi companies.
None of that helps Devdas Nair, a 34-year-old advertising professional in New Delhi looking for new wheels. He wants to try an EV and says he’d pay somewhat more to help the environment and for future savings. Yet for him right now, it’s too much of a gamble.
“I was excited about the EVs, but the price tag is just too much,” he said. “We don’t even know how the charging infrastructure is going to be in India. That makes me rethink — actually not think about it at all.
Written by Harichandan Arakali | October 8, 2019 07:01:22 AM IST