Indian EV sector should aim to up exports: Niti Aayog

Market: Battery materials, Emissions
27/09/23

India's electric vehicle (EV) manufacturing industry must look at export-oriented production, government think tank Niti Aayog adviser Sudhendu Sinha said on 26 September.

The EV industry in India is fast growing, with production forecast at 10mn units/yr by 2030, Sinha said at the Sustainable Supply Chains for EV Batteries event organised by think tank ICRIER-IIS on 26 September.

But India needs to focus on exports to countries which seek affordable and reliable EV models and technologies, Sinha said. Countries such as Indonesia, the Philippines and African nations are looking to the Indian market as products manufactured there are affordable and reliable, and Indian firms provide after-sales services and handle post-sale problems, he said. These countries do not wish to source EV technologies from Europe as these are costly, or from China because of the absence of reliability of the products, he added.

India has to compete in three "races" against other countries that manufacture EVs, said Sinha. It has to firstly make EVs prominent in its domestic market and produce them domestically. Secondly, output should be export-oriented. And lastly, the EV supply chain should be based domestically as far as possible.

There is more demand for four-wheelers than two-wheelers in the western market, said Sinha. Conversely, two-wheelers comprise the largest share of the Indian EV market, at 50-65pc each month. India's full electric vehicle (EV) sales continued to rebound in August from July, recovering from the impact of a subsidy cut for two-wheeler EVs earlier in the year.

Full EV sales were at 126,460 units in August, up by 8.7pc from a revised 116,287 units in July, and by 42pc from 89,005 units a year earlier, according to data on government website Vahan. The rise in full EV sales was led by a rebound in two-wheeler registrations, which rose to 62,449 units in August, up by 15pc from a revised 54,505 units in July and by 20pc from 52,196 units in August 2022.

Sinha called on the EV industry to identify the challenges at each stage in production of EVs and advanced cell chemistry (ACC) batteries, and look at "enablers" required to overcome these challenges.

He also called for the continuation of subsidies and incentives for the EV industry for some time, so that the country does not "miss out" on the three races.

The Indian government has reduced the demand incentive provided under the Faster Adoption and Manufacturing of Electric Vehicles-II (Fame-2) scheme to 10,000 rupees/kWh ($121/kWh) from 1 June, down from Rs15,000/kWh earlier. It also cut the cap on incentives for electric two-wheelers to 15pc of the ex-factory price, down from 40pc earlier. The Fame-2 scheme will end on 31 March 2024. But industry participants have called for an extension of subsidies.

By Pranav Joshi

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