Page 22 - The Insurance Times August 2022

India. Other government entities like BHEL have partnered on an upward tick, it has much ground to cover to be
with ISRO in order to develop batteries using Lithium able to realize the government's ambitious 2030 target.
technologies. Most lithium requirements are currently The COVID-19 pandemic not only slowed the industry's
imported from China, South Korea, Vietnam, Singapore, and progress, but also dampened overall market demand.
Japan. Other players who have shown interest in the Lithium
3. Huge investment: Realizing India's EV ambition will
battery production business in India include Reliance, Suzuki,
also require an estimated annual battery capacity of
Toshiba, Denso Corp, JSW Group, Adani, Mahindra, Hero
158 GWh by FY 2030, which provides huge investment
Electric, Panasonic, Exide Batteries, Amara Raja. Some of
opportunities for investors. Enabling policy support
the largest Lithium-Ion battery manufacturers in India are
measures are a critical need at this juncture.
Exide Industries, a joint venture between Suzuki, TOSHIBA
4. Insufficient charging infrastructure: In 2019, there
and DENSO, in Gujarat; Amara Raja Batteries, Li Energy and
were only 650 charging stations in India as against over
ATL and Manikaran Power Ltd. The Top EV Charging stocks
0.3 million in China. Lack of sufficient charging
are Tata Power, Indian Oil Corporation, BPCL, Reliance
infrastructure is one of the primary reasons why
Industries, NTPC and Powergrid Corporation. Among these,
customers often refrain from purchasing EVs.
IOC and BPCL have already pledged to use their outlets to
set up 17000 EV charging centres in near future. 5. High costs: Along with the range anxiety (kms/charge),
another major concern among the
potential customers is the current high
price of EVs. As compared to lower-end
(internal combustion engine) ICE cars,
electric cars in the same segment tend
to be more expensive. This is mainly
because of the higher cost of technology
used in the EVs, which constitutes a
substantial portion of the cost, not
leaving much scope for other features
usually available in premium cars. With
the recent announcement of subsidies,
the price rationalization of EVs in the
two-wheeler segment is on cards.

6. Limited options: Since it is still a
budding industry in India, customers
have a very limited range of products to
choose from. Increased investment in the sector will
Challenging phase: make it more competitive in due time and this will help
The steps taken in order to enable the acceptance of EVs create further demand.
will not suit their main purpose if alternative means of
7. Lower mileage: The industry is young, there is
electricity production are not implemented. Currently, up
immense scope for R&D. As of today, EVs in India are
to 60% of the electricity is produced from coal. Although
not cost competitive to an average customer as
the government has set major aims to bolster the growth
internal combustion engine (ICE) vehicles prove to be
of EVs a lot more has to be done in order to ensure they are
more cost effective.
implemented. Others include
1. Better supply chain: The EV sector in India needs a 8. Higher dependency on imports: Reliance on imports
better supply chain, not just in terms of technology but of battery as well as other components is also one of
also in terms of volume. The ongoing shortage of the factors adding to the cost of EVs in India.
semiconductors has only worsened the situation for the
9. Grid challenges: Another concern is regarding the price
industry. India must now focus on developing a local
of charging EVs at private charging stations once EVs
supply chain to improve production and reduce
become mainstream. Even with a fair penetration of
dependence on China.
EVs, the increase in demand for electricity is likely to
2. Ground to cover: While growth in the EV industry is be about 100 TWh (tera watt-hours) or about four
22 The Insurance Times, August 2022