Gadkari asks automakers to cut EV cost, forgo profit

Asserting that India has full potential to emerge as a global hub for electric vehicles by 2025, Union Minister Nitin Gadkari on Friday asked automobile manufacturers to reduce cost and forego profit initially to capture market and fuel growth.

Once the market picks up there will not be any looking back, Road Transport and Highways and MSMEs Minister Gadkari said, promising all support to manufacturers in the initiative aimed at cutting India's huge import costs of crude and arresting pollution.

The minister said he is scheduled to make an hour-long presentation on EVs before the Chief Justice of India post-Diwali.

“He was addressing a virtual "Electric Mobility Conference 2020 - The Spark Revolution in India" by industry body Ficci.

"E-mobility is going to be the future mode of economic transport...There is economic viability for manufacturers, but presently they are not in a mood to reduce cost.

“Reducing cost may result in some losses initially, but will bring great benefits. As a marketing strategy you have to reduce the cost to get numbers," Gadkari said.

He also said that India has the potential to become the largest EV producer in the world in the next five years.

However, Indian manufacturers prefer to wait and watch and are late in participating in any global competition.

"Now is the time to harbour the ambition to become number one... the raw material is available, power rates are reducing...you have a win-win situation," he told carmakers.

He also cautioned them to not to be entangled in bureaucratic tangles.

Globally automobile companies have introduced several innovations in the segment, he said.

The minister admitted that significant EV-specific concerns persist like on batteries, charging, and driving range that prevent a large-scale consumer pull, but these issues being addressed rapidly.

He expressed concerns over the fact that India needs to import oil to cover over 80 per cent of its transport fuel, saying import of crude is a big economic problem.

"Air pollution is a million-dollar problem. We need to find an integrated approach to it.

“Transport sector alone was responsible for 18 per cent energy demand and 70 per cent of it was met through imported crude oil," Gadkari said.

Terming EVs as a solution to it, he said 22 new green expressways are planned, including Bangalore-Chennai - which will be completed in three years.

"Air pollution is a crucial issue", the minister said, adding in 2019, three million new cars were registered, which resulted in huge petrol and diesel burden.

He said the government is committed to provide all help to EV makers and 100 per cent GST subsidy has already been offered.

He exhorted people to come forward to use such vehicles for rental or personal use to promote and support the EV industry.

India has to develop a particular set of capabilities which are conducive to sustainable mobility for accelerated adoption of EVs, the minister said, adding the emphasis of the EV Policy is to establish technological and manufacturing leadership in the economy segment of the market.

The extensive use of small vehicles such as two-wheelers, three-wheelers gives greater opportunities to manufacture these vehicles in the EV segment.

One challenge for the wide usage of EV technology is the affordability of batteries with efficient technology, but has seen enormous technological advancement in recent years, in both improving battery performance and reducing cost, he said.

"We have to develop an ecosystem of fast-charging or swapping of batteries. We need to encourage manufacturing of such battery cells in India," he added.

Citing a Niti Aayog report the minister said India needs a minimum of 10 GWh of cells by 2022, which would need to be expanded to about 50 GWh by 2025.

"Therefore, manufacturing these cells in India need to be encouraged," he said.

The government is promoting two important measures to manage the EV charging load - renewable energy to charge electric vehicles, which will reduce the load on transmission and distribution network and Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II), he noted.

Gadkari said the government is planning Rs 1 lakh crore Delhi-Mumbai e-highway to promote EVs.

Photograph: Hemanshi Kamani/Reuters