What is an electric vehicle?
An electric vehicle (EV) is one that operates on an electric motor, instead of an internal-combustion engine that generates power by burning a mix of fuel and gases. Therefore, such a vehicle is seen as a possible replacement for current-generation automobiles, in order to address the issue of rising pollution, global warming, depleting natural resources, etc. Though the concept of electric vehicles has been around for a long time, it has drawn a considerable amount of interest in the past decade amid a rising carbon footprint and other environmental impacts of fuel-based vehicles. In India, the first concrete decision to incentivize electric vehicles was taken in 2010.
According to a Rs 95-crore scheme approved by the Ministry of New and Renewable Energy (MNRE), the government announced a financial incentive for manufacturers for electric vehicles sold in India. The scheme, effective from November 2010, envisaged incentives of up to 20 percent on ex-factory prices of vehicles, subject to a maximum limit. However, the subsidy scheme was later withdrawn by the MNRE in March 2012. In 2013, India unveiled the ‘National Electric Mobility Mission Plan (NEMMP) 2020’ to make a major shift to electric vehicles and to address the issues of national energy security, vehicular pollution, and growth of domestic manufacturing capabilities.
Though the scheme was to offer subsidies and create supporting infrastructure for e-vehicles, the plan mostly remained on paper. While presenting the Union Budget for 2015-16 in Parliament, then finance minister Arun Jaitley announced faster adoption and manufacturing of electric vehicles (FAME), with an initial outlay of Rs 75 crore. The scheme was announced with an aim to offer incentives for clean-fuel technology cars to boost their sales to up to 7 million vehicles by 2020. In 2017, Transport Minister Nitin Gadkari made a statement showing India’s intent to move to 100 percent electric cars by 2030. However, the automobile industry raised concerns over the execution of such a plan. The government subsequently diluted the plan from 100 percent to 30 percent.
In February 2019, the Union Cabinet cleared a Rs 10,000-crore program under the FAME-II scheme. This scheme came into force on April 1, 2019. The main objective of the scheme is to encourage faster adoption of electric and hybrid vehicles by offering upfront incentives on the purchase of electric vehicles and also by establishing necessary charging infrastructure for EVs.
Electric vehicles market in India is steadily going to take off, not at the rate that the government considers it to be, but the industry might get pretty big moving ahead.
These electric vehicles run on rechargeable batteries. To make it more efficient such that less energy is consumed while driving, the components of these vehicles are made from lightweight and high-quality plastic or fiber.
Considering this, there are few companies which can be focused on by investors.
The company has a wide reach in Indian markets and is one the most trusted by Indian car owners.
The company is going to launch its electric vehicle Maruti Suzuki Wagon R electric vehicle in the second half of 2021. Provided the infrastructure developments also go hand in hand with the launch of electric vehicles, the car will see a good sale in the future.
2. Amar Raja Batteries
As the main component of the electric vehicles is battery, India's second-biggest traditional battery maker Amara Raja is looking to build a Lithium-ion assembly plant soon. The firm is already working in collaboration with different state governments to promote the use of electric vehicles. They have collaborated with Delhi government to set up charging station. Amara Raja launched EV charging stations and battery swapping stations in collaboration with Tirupati Municipal Corporation along with a fleet of electric auto-rickshaws as part of the central government’s Smart Cities program.
3. Minda Industries
World’s best performing Indian auto parts maker Minda Industries will get a boost from the electric vehicle market. The company is in touch with original equipment manufacturers for possible EV-compatible systems and is evaluating existing products to see how they will fit into the market. The company has already increased the R&D costs to enter the electric vehicle segment to capitalize on the opportunity.