Mumbai/New Delhi: More so than anywhere else, automakers are chasing the holy grail of electric mobility in India: a lower price.
Mahindra & Mahindra Ltd.’s launch of its e-KUV at a price of Rs 8,25,000 ($11, 587), compared to its next cleanest option — a mid-range petrol variant at Rs 6,50,000 — highlights the challenge of pricing electric cars that can entice buyers. A global model such as Hyundai Motor India Ltd.’s Kona electric SUV starts at Rs 2.5 million and has sold just about 300 units in seven months since its launch.
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.
“Mass adoption of electric cars in India will not happen unless the gap in upfront prices of electric and ICE vehicles is brought down,” said Shantanu Jaiswal, head of research for India at BloombergNEF.
To address this, Hyundai is working on a mass-market electric car for India, according to Tarun Garg, sales director at its Indian unit. The company plans a launch in 2-3 years, he said.
Apart from price, a lack of charging infrastructure that creates range anxiety and rapidly evolving technology, which promises to bring the cost of vehicles down, is also keeping potential buyers on the fringe.
“Pricing EVs at below 1 million rupees is going to be very difficult,” Pawan Kumar Goenka, managing director at Mahindra & Mahindra said in an interview. “The price we have done for e-KUV is very aggressive and the reason we’ve done that is to kick start the ramp-up of EVs.”
Goenka expects a decline in cell prices and increased local manufacturing to bring prices down over 3-5 years. Lower prices could drive sales volumes, spreading the fixed costs and lowering prices even further, he said.
Also read: Carmakers shedding 80,000 jobs globally as electric era upends industry
Muted Demand
Meanwhile, the muted demand for electric vehicles is keeping some automakers on the sidelines.
“In India, the problem is customer demand for EVs is not that great. For a new entrant like us, it frankly doesn’t make sense,” said Manohar Bhat, head of sales and marketing at Kia Motors India Pvt. “We came into the SUV segment because the largest demand is there — that’s the sweet spot for us.”
India’s government is pushing for a faster adoption of electric vehicles — hoping at least 15% of all vehicles on the road will be electric in five years starting 2018 — to deal with the deadly air pollution in its cities and curb carbon emissions from fossil fuels. An increased fleet of such vehicles is also seen as boosting demand for electricity, which has declined for five straight months ended December.- Bloomberg
Also read: Porsche bets rich Indians will pay to show off electric cars
,Arrey in Jumla, facts do not matter, Economics is unknown subject for the speaker and the voter.
The depreciation in the economy and lack of sentiment in consumers for the last year which was the cause for decline in automobile sales, could present the government with a possible opportunity. Budget ’19 saw the finance minister reduce corporate taxes but to no use. The corporates did not spend the extra revenue, they were sitting on it. Now income tax is being given a cut … Time shall tell if this works either.
I believe, India should now look east and stop aping the west.
Automobile sales are low, impacting the economy. Manufacturers are unwilling to spend until the economy bounces back to health. City’s are getting chocked. Oil prices rising and EVs are a long shot dream.
The government needs to start investing heavily on public transportation. Build Metros, high speeds rail networks. Modernise buses and build more public housing. This will not only help boost back the economy by increasing disposable income and capital flow but also in the long run help India fall out of the automobile trap with has made us suseptable time and again to oil prices in Iran or economic downturns and sentiment and most importantly pollution. I’m an electrical engineer and Ive observed the trends in electric vehicles and it doesn’t suit the tastes of a developing nation or economy. They have high up front costs, needs immense expertise to improve production efficiency, cell technology is at the least 5 years away to being moderately scalable. Like with mobile phones, electric cars and cell technology develope year on year. This will keep Indian consumers who are not the most impulsive to wait until it matures.
India just can’t afford EVs yet. The government could initiate further income tax benefits and returns to people who purchase electric vehicles but it will only be the top 5% of the earners who will be able to afford to put 15 + lacks upfront and take the risk of being early adopters
I personally think that the government should start the electrification on commercial heavy vehicles which does lot more damage. Buses and lorries should be the first bridge to cross and then the infrastructure. If people had a sense of electric vehicles. People would think twice about moving to the ICE variants. And the other problem , they don’t market the EVs in ads i haven’t seen a single ad on TV about EVs. They should educate that it cost lesser than the gas counterparts. Again range anxiety is something you can never wash off
This seems rights, I am happy with the ICE, as I can find fuel whenever I want and wherever I want when I travel long distances which I do most, I don’t stop for almost 500kms. My native place is 580 Kms from where I work. Goes there four times a year. Till now didn’t find an EV that can achieve that within my budget.
I would have bought a Tesla in the long run, but GOI increased the import tax to 70% total. So that on hold now. For the new decade also I will only go for an ICE, until unless a valuable alternative presents itself
There seems to be little to no awareness in the actual improvement in charging infrastructure within our metros, cities and towns and the highways that connect them. Unless I missed it in the news cycles. Either the individual automaker or the public/private Enterprise needs to advertise the upcoming charging infrastructure additions assuming its implementation takes place in a finite sensible amount of time. Right now TCO is no where in the customer’s calculations of the BEV as the upftont costs are just too high. I can imagine upto a 150% price difference between the ICE and it’s electric counterpart. Frankly it looks like a difficult job until Maruti completely commits to the EV mantra by introducing BEVs under 10lakhs or the 130% price increase unless you can justify the price in terms of offerings on the product Hyundai. Kona completely missed the mark as yours truly predicted. The bigger pterol/diesel bunks in the mteros can surely utilise the extra space to put up charging infrastructure. FAME 2 does not support passenger EV car/4 wheeler subsidies.