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Council on Energy, Environment and Water Integrated | International | Independent
Report

India’s Electric Vehicle TransitionImpact on Auto Industry and Building the EV Ecosystem

Abhinav Soman, Karthik Ganesan, Harsimran Kaur
October 2019 | Technology, Finance & Trade

Suggested Citation: Soman, Abhinav, Karthik Ganesan, and Harsimran Kaur. 2019. India’s Electric Vehicle Transition: Impact on Auto Industry and Building the EV Ecosystem. New Delhi: Council on Energy, Environment and Water.

Overview

This report, supported by Shakti Sustainable Energy Foundation, explores various aspects of India’s transition to electric mobility. It examines the impact it would have on the automotive value chain, particularly on the automotive components industry and the jobs in this sector. The report quantifies the impacts and proposes strategies to ensure a transition trajectory that can mitigate any adverse fallout. Further, it maps the current e-mobility ecosystem in India and compiles the various policy, finance, and supply chain challenges that the various stakeholders face.

CO2 emissions per kilometre will be lower in an electric car compared to an ICE car in 2030

Source: Author’s analysis

Key Findings

  • Indian automotive industry can produce a 5.7 per cent higher value add in a 30 per cent electric car sales scenario than in a business-as-usual (BAU) scenario with limited electric car penetration.
  • Limited indigenisation of powertrain and battery pack assembly will lead to an 8 per cent lower value addition from car manufacturing in 2030 as compared to BAU.
  • An EV transition can generate a higher value add than BAU if both, powertrain components and battery pack assembly, are highly indigenised.
  • A 30 per cent electric car scenario will support around 20 to 25 per cent fewer jobs as compared to BAU depending on the level of indigenisation.
  • The new EV jobs will require a trained workforce which does not exist in India today. Reskilling and vocational training will be critical to achieving the EV sales target.
  • Importing battery cells for electric cars will be cheaper than importing the oil needed for internal combustion engine (ICE) cars in 2030.
  • CO2 emissions per electric car will be 2 to 16 per cent lower in 2030 (depending on renewable energy penetration in the grid), highlighting the environmental case for an EV transition in India.

Key Recommendations

  • Support the indigenisation of the supply chain to enable original equipment manufacturers (OEMs) to build more cost competitive products.
  • New OEMs should focus on R&D and developing new business models that offer a better value proposition and cost reduction. Both existing and new OEMs must engage in developing the EV ecosystem simultaneously to meet infrastructure, skill development, and financing needs.
  • Use a combination of supply-push and demand-pull measures that boost the penetration of EVs in India.
A 30 per cent electric car scenario will support around 20 to 25 per cent fewer jobs as compared to BAU depending on the level of indigenisation.

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