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1、 Electric Mobility Strengthening Eco-System Towards Vision 2030The Associated Chambers of Commerce and Industry of IndiaAugust 2023Deepak Sood Secretary General,ASSOCHAMMESSAGEThe automotive sector is a significant driver of the Indian economy,owing to its strong backward and forward linkages.Global
2、ly the automotive industry has seen many transformations in the last 50 years.However,the current trend of a paradigm shift towards Electric Vehicles is a significant one.This sector accounts for a large part of greenhouse gas emissions,which has necessitated the development of sustainable mobility
3、options for India and the world because of the impact of carbon emissions on our lifestyle and economy.As India relies heavily on fossil fuels for its energy supply,adopting EVs will be particularly important for our economy and future growth prospects.Countries across the world are moving towards E
4、Vs,and their pace of development is increasing across segments from passenger cars to other modes of transport.It is,therefore,important to fully understand how new technologies in EVs will influence future mobility,the associated business models,and social acceptability.In recent years,the Governme
5、nt of India has facilitated various policy reforms and incentives to encourage the development and acceptance of electric vehicles.To encourage EV penetration in India,several strategic policy incentives have been provided by governments both at the Central and State level.EVs have the potential to
6、transform the automotive industry and help decarbonize the planet,and India can benefit on many fronts with the introduction of electric vehicles in the country.The Government of India is vigorously promoting the rapid adoption of electric vehicles to accelerate the transition to green mobility and
7、to achieve Indias net-zero target by 2070.India has set an ambitious target of 30%electric vehicle penetration by 2030.To achieve this target and facilitate Indias transition towards EV deployment,a coordinated action that includes a combination of policy support from the Central and State Governmen
8、ts,infrastructure development,technology innovations and increasing consumer awareness will be essential.ASSOCHAM and NRI Consulting&Solutions India Pvt.Ltd.have prepared a study on the subject to outline factors that would provide impetus to the e-mobility sector to achieve the set target.We acknow
9、ledge the efforts made by the experts in preparing this report to be presented at the National Conference on Electric Mobility:Strengthening Eco System towards Vision 2030.We hope it will help policymakers,industry,academia,and other stakeholders understand the roadmap for future growth and developm
10、ent for the Electric Mobility sector in India.Deepak Sood(i)Vineet Jain Partner&Group Head,Automotive Industry Consulting Group NRI Consulting&Solutions India Pvt Ltd.FOREWORDElectric Mobility,together with other alternative powertrains,holds great promise for India in tackling rising emissions and
11、reducing dependency on oil imports.In recent years,significant policy milestones have been achieved by both the Central and State governments through interventions like FAME,PMP,PLI,and State EV policies.Industry players have embraced the potential of EVs in India,with OEMs,startups,and shared mobil
12、ity providers exploring new products and business models.The investment community recognizes EVs as a high-potential area,while academia and premier institutions like IITs are actively researching and refining EV technology for Indian use cases.This collective effort showcases a strong determination
13、 from the government,industry,and academia to kick-start the EV revolution in India.However,the transition to EVs also presents challenges.The supply chain for key components is nascent and dependent on imports,necessitating stable procurement of raw materials even with localization efforts.Prospect
14、ive EV users have concerns about range anxiety,charging infrastructure,financing,and vehicle performance.Addressing these concerns while achieving the right value-price equation through unique business models is critical in a cost-conscious market.In this report titled“Electric Mobility:Strengthenin
15、g Ecosystem Towards Vision 2030”,we present the current status,trends,and future potential of electric mobility in India while exploring the unique challenges towards making it sustainable.Our research provides valuable insights for policy formulation and implementation based on the industrys voice.
16、We extend our gratitude to all stakeholders,including the government,industry players,academia,and prospective users,whose collaboration has made this research possible.We hope this report serves as a valuable resource in advancing sustainable electric mobility in India and accelerates the nations j
17、ourney towards a cleaner and greener transportation ecosystem.Vineet Jain(iii)CONTENTS1.Strengthening Electric Mobility Ecosystem.1 1.1 Need for a Sustainable Electric Mobility Ecosystem.12.Policy Overview.4 2.1 Global EV Policies&Learnings.4 2.1.1 Vehicle Purchase Support Policies:.4 2.1.2 Charging
18、 Infrastructure Policies:.52.1.3 ManufacturingandCriticalRawMaterialSupplyChain:.6 2.2 History of EV Policy in India.7 2.3 Central Policy.72.3.2 State-wisePolicies.12 2.4 FAME-II impact on EV Sales.143.Current Market Understanding of EVs.163.1ElectricVehicleSalesGrowth-Global.163.2ElectricVehicleSal
19、esGrowth-India.16 3.3 Market Players.173.3.1 ElectricTwo-Wheelers(E2W).183.3.2 ElectricThree-Wheelers(E3W).183.3.3 ElectricFour-Wheelers(E4W).19 3.3.4 Electric Buses.20 3.4 Impact Drivers in India.203.5SustainingEVAdoptioninIndia.213.6IndiasEVExportPotential.224.EV Supply Chain Status in India.23 4.
20、1 Current Supply Chain Status in India.244.1.1 Battery.244.1.2 IndiasBatteryChemistryEvolutionSpeculativeOutlook.254.1.3 CellcostbreakdownandLocalizationPotential.264.1.4 MajorPlayersoperatinginIndianBatterySpace.274.1.5 BatteryLocalizationPotentialinIndia.274.1.6 ChallengesinBatterySupplyChain.294.
21、1.7 TractionMotor&Inverter.294.2FuturePotentialofEVSupplyChaininIndia.30(v)5.Charging and Swapping Infrastructure.32 5.1 Types of Chargers&Interoperability.335.1.1 ProtocolsforOperability.345.2GeographicalCoverage,Growth&Demand.345.2.1 FastChargingStations.355.2.2 BatterySwappingStations.365.3KeyBus
22、inessModelsandCompetitiveAdvantages.365.3.1 ChargingStationBenefits&Ecosystem.365.3.2 BatterySwappingBenefits&Ecosystem.375.4DISCOMsandPowerInfrastructure.386.WayForwardIndustryPerspective.39 6.1 FAME Scheme.396.2PLIACCIsittherightwaytogoaboutbatterylocalization?.396.3StrengtheningtheDownstreamSuppl
23、yChain.406.4ImprovingBatterySupplyChain&Localisation.406.5ExportPotential.41 6.6 Priority Lending&Inclusion of MSMEs.416.7KeyRecommendations.42Authors.44General Disclosures.45References.46About ASSOCHAM.47CONTENTS(vi)Electric Mobility:Strengthening Eco-System Towards Vision 203091 Strengthening Elec
24、tric Mobility EcosystemThe automotive industry plays a crucial role in Indias economic growth,contributing approximately 7.5%to the total GDP and around 49%to the manufacturing GDP.Notably,it also generates employment opportunities directly and indirectly,with a substantial workforce of 32 MN.It ser
25、ves as a significant catalyst for the Make in India initiative,promoting sustainable development and addressing mounting apprehensions regarding climate change and environmental deterioration.Despite the adversity of the COVID-19 pandemic,the Indian automotive industry is showing resilience by effec
26、tively overcoming a significant portion of its challenges.Moreover,the sector is capitalizing on emerging favourable trends,including the rebalancing of global supply chains,government incentives to bolster exports,and transformative technological disruptions that create promising opportunities.1.1
27、Need for a Sustainable Electric Mobility EcosystemIn India,the shift towards alternative powertrains is driven by critical concerns regarding energy security,manufacturing import dependency,and carbon emissions.With a staggering 87%of oil being imported,resulting in an import bill of approximately$1
28、58.4 Bn in the FY 23,the transportation sector alone consumes 40%of this imported oil,significantly impacting energy security.Moreover,the import of raw materials and components for vehicle manufacturing,amounting to around$16.5 Bn in FY 23,not only intensifies import reliance but also places an add
29、itional burden on the environment through increased carbon emissions.India ranks as the fourth-largest emitter of CO2 globally,with the transportation sector contributing roughly 13.5%of the nations total emissions.The adoption of alternate powertrain vehicles,including Hybrid Electric Vehicles(HEV)
30、,Electric Vehicles(EVs),NG vehicles(NGV),Ethanol&Flex fuel vehicles,Hydrogen Fuel Cell based vehicles that have the potential to solve these problems.Electric vehicles in particular can substantially reduce overall greenhouse gas(GHG)emissions.Furthermore,coupling electric vehicles with Electric Mob
31、ility:Strengthening Eco-System Towards Vision 203010renewable energy sources for charging can further enhance emission reductions,paving the way for a cleaner and more sustainable transportation system.The energy transition in India is witnessing a significant shift in automobile technology with a g
32、rowing emphasis on alternate powertrains.As the nation aims to reduce carbon emissions and curb its dependence on fossil fuels,the adoption of electric vehicles(EVs)and other alternative powertrains is gaining momentum.Government initiatives,such as the Faster Adoption and Manufacturing of Hybrid an
33、d Electric Vehicles(FAME)scheme,have incentivized EV adoption,leading to a surge in domestic production and increased availability of charging infrastructure.Additionally,advancements in battery technology and renewable energy integration are paving the way for sustainable mobility solutions.Indias
34、G20 Presidency this year presents an exceptional opportunity for the country to spearhead a collective approach to tackle multiple,complex,and interconnected challenges,while placing,front and centre,the aspirations and needs of the developing world.The COVID-19 pandemic,supply chain disruptions,cli
35、mate change,food and energy security risks,geopolitical tensions,inflation,and a looming debt crisis all contribute to economic slowdown and uncertainty in global economic growth.India has set“Vasudhaiva Kutumbakam”or“One Earth-One Family-One Future”as the theme for its G20 Presidency,rightly aiming
36、 to instil a sense of unanimity essential for addressing these global challenges collectively and effectively.Indias Prime Minister further envisions Indias G20 agenda to be“inclusive,ambitious,action-oriented,and decisive.”Indias successes and experiences are critical to tailoring global solutions.
37、Key focus areas of G20 Include:1.Climate action:India has made climate action a key focus of its G20 presidency.The country has called for a collective effort to reduce greenhouse gas emissions and transition to a clean energy future.2.Economic recovery:India is also using its G20 presidency to prom
38、ote economic recovery from the COVID-19 pandemic.The country has called for measures to boost global trade and investment,and to support small and medium-sized businesses.Electric Mobility:Strengthening Eco-System Towards Vision 2030113.Global health:India is also committed to global health.The coun
39、try has called for a coordinated response to the COVID-19 pandemic,and for measures to strengthen global health systems.Multiple groups have been created to address these themes like“Expert Group on Climate Action”:responsible for developing recommendations on how to accelerate the transition to a c
40、lean energy future.“Business Forum”:a platform for businesses to engage with the G20 on issues of economic growth and development.India is using its G20 presidency to promote carbon neutrality,alternate powertrains,and electric vehicles in a number of ways.India has hosted a G20 Ministerial on Clean
41、 Energy Transition:This ministerial meeting brought together ministers from G20 countries to discuss ways to accelerate the transition to a clean energy future.India also launched the G20 Action Plan on Electric Vehicles:This plan outlines a number of measures that G20 countries can take to promote
42、the adoption of electric vehicles and announced the launch of the G20 Green Hydrogen Task Force to promote the development and deployment of green hydrogen.*Electric Mobility:Strengthening Eco-System Towards Vision 2030122.Policy Overview2.1 Global EV Policies&LearningsAs of 2022,according to IEA,90
43、%of the EV sales in Light Duty Vehicles(LDV)(includes passenger+commercial)across the globe are covered by EV-related policies.Driven by Zero Emission Targets in China,Europe,US and promising ambitions in markets like India,around 50%of the global sales in LDV sales are targeted to be Zero-Electric
44、Vehicles by 2035.However,with EV penetration at different levels across geographies,the policy directions now have contrast in the area of focus.2.1.1 Vehicle Purchase Support Policies:Globally the purchase of EV Vehicles is focussed around i)Purchase Incentives/Vehicle Credits for Electric Vehicles
45、 and ii)Tighter emission norms coupled with EV sales targets/ban on ICE vehicles forcing the phasing out of ICE especially diesel.In advanced markets where EV penetration is in double digits in LDVs,Purchase incentives are being strategically phased out.In China,at the national level,subsidies are a
46、lready phased-out;however,at the local level,vehicle subsidies are present,which are aligned towards govt targets of achieving 50%New Energy Vehicles(NEV)vehicle share by 2030.In the case of Europe,countries like Norway,where penetration has already reached 80%of the new car sales,are reintroducing
47、VAT for EV cars.In Germany,Plug-in Hybrid Vehicle(PHEV)subsidies are already phased out,and Battery Electric Vehicle(BEV)subsidies are being reduced year-by-year till 2025.In countries with advanced EV penetration in cars,the push towards targets and incentives towards increasing EV penetration amon
48、g heavy commercial vehicles(trucks&buses)is rising.Apart from direct incentive fuel economy targets,tighter emission norms Euro-7 is expected from 2025,which is likely to force the phasing out of ICE engines especially Diesel.Electric Mobility:Strengthening Eco-System Towards Vision 203013Countries
49、like USA and Japan,which are still in the growth stages of EV penetration,are ramping up or continuing with existing levels of tax credits,including for private 4-wheelers.Other emerging ASEAN markets like Indonesia have also introduced purchase incentives especially targeting 2 Wheelers.India being
50、 in an emerging EV market,has policies in line with global cases with subsidies targeting 2W(personal+commercial use),3W&4W(commercial)and e-buses.Except in 3-wheelers,including e-rickshaws,India still needs to make a significant journey towards being a mature EV market.Hence,demand incentives need
51、to be phased out strategically until desired penetration targets are achieved.Apart from incetives for BEVs,there is a need to broaden the horizon as far as the electrification technologies for which incentives are being provided are concerned.BEVs are only one part of the electrification family,whi
52、ch also includes SHEV(strong hybrid electric vehicles)and PHEV(plug in hybrid electric vehicles.In the Indian context especially,SHEVs can play a key role in the transition towards mobility electrification.SHEVs provide multiple advantages.They have higher fuel effiencies(upto 45%)and much lower emi
53、ssions as compared to their ICE counterparts.Other key aspect is that SHEVs are self charging vehicles(no range anxiety)and hence provide economies of scale for manufacturing of EV components such as batteries,motors&power electronics,thus catalyzing BEV adoption as well.It is because of these reaso
54、ns that in multiple countries across the world,SHEVs are taxed lower and provided incentives to ensure their attractiveness as compared to equivalent ICE vehicles.In contrast India charges higher absolute tax on SHEV than ICE version.In order to ensure the faster development of the electrification e
55、cosystem in India,the rationalization of tax anomaly on SHEVs is critical,which will also help catalyse vision of Electric mobility in the country.2.1.2 Charging Infrastructure Policies:Most growing and advanced EV penetration markets like China have strong policies incentivising the set-up of charg
56、ing stations,with regions like Shenzhen targeting over 790,000 slow chargers and 43,000 fast chargers by 2025.Despite reducing purchase incentives in Germany,investment into charging infra,especially for High Duty Vehicle(HDVs),is amped up.Japan has policy&budget outlays for setting up both hydrogen
57、 refilling Electric Mobility:Strengthening Eco-System Towards Vision 203014stations and charging stations.Japan plans to construct over 150,000 charging stations by 2030,with 20%being fast-charging stations.The US also has a strong policy push for charging infra with$1.5 Billion under National Elect
58、ric Vehicle Infrastructure(NEVI)program.Coupled with the NEVI program is Inflation Reduction Act(IRA)which provides tax credits for setting up charging stations.California has been the leading region in the US with funding schemes,especially for Medium-Heavy Duty Truck charging stations.India also h
59、as strong charging infra policies,with FAME-2 providing capital subsidy at a central level and various state-level policies supporting via tax incentives and ease of regulations.Apart from support for charging infra,India and China are 2 countries giving significant importance to battery swapping in
60、 policy.Chinese standard for battery swapping was published in 2021 and is part of national NEV strategy.Several cities and provinces in China also provide financial support for swapping stations which has led to China having 2,000 battery swap stations by end of 2022.India also introduced draft EV
61、battery swap policy in 2022 which is targeted towards e-2W and e-3W.2.1.3 Manufacturing and Critical Raw Material Supply Chain:Increasing localised production of EVs and critical components like batteries has been a rising priority across major economies.Currently,downstream material processing,batt
62、ery manufacturing,and permanent magnets for motors are predominantly controlled by China.Coupled with the Ukraine-Russia war highlighting the vulnerability of critical minerals like nickel,major economies are increasingly looking into developing strategic stockpiles of critical minerals.US has been
63、pushing manufacturing localisation via IRA supply side Advanced Manufacturing Production Credits with up to US$35 per kWh for battery production.In addition to FTAs with major lithium-rich countries,the US has signed MoU with the Democratic Republic of Congo and Zambia.European Union and the UK have
64、 also been strong proponents of manufacturing localisation,especially batteries.EU has proposed the Critical Raw Materials Act to secure the supply chain of materials for decarbonisation.Amongst emerging EV markets,Indias policy has given impetus to EV manufacturing localisation and local battery as
65、sembly&eventual localisation of sub-components.India is also a member of the Electric Vehicle Initiative by Clean Energy Ministerial allowing it bolster its policy actions.Additionally,India has launched policies around battery recycling for further strengthen circular economy and successful reuse o
66、f critical minerals.India is also successful in identifying 30 critical minerals via inter-ministerial consultation and setting up entities for strategic acquisition of critical minerals.The 30 key minerals identified in the inter-ministerial report“Critical Minerals for India”led by ministry of min
67、es includes EV battery specific minerals like lithium,nickel,cobalt and graphite.To strengthen Indias position in supply chain of the critical minerals,the report recommended:Establishing Centre of Excellence for Critical Minerals(CECM)new research and analytical infrastructure for critical mineral
68、demand Collaboration with international agencies,KABIL(Khanij Bidesh India Limited)for strategic acquisitions of minerals Preparation&monitoring of exploration strategy under Ministry of Mines via CECMElectric Mobility:Strengthening Eco-System Towards Vision 2030152.2 History of EV Policy in IndiaTh
69、e Government of India has introduced a set of fiscal and non-fiscal incentives to support the adoption of electric mobility.These incentives include tax breaks,subsidies,and access to dedicated lanes.The government has also set ambitious targets for the adoption of EVs,such as having 30%of all new v
70、ehicles sold in India be EVs by 2030.The road to transformation for electric mobility in India started in 1994 with Indias first electric vehicle,the REVA.In 2010,the Ministry of New and Renewable Energy(MNRE)launched the Alternate Fuels for Surface Transportation Programme with a budget of INR 95 c
71、rore.This was the first step to promote electric vehicle penetration in India.A major policy boost followed in 2012 with the National Electric Mobility Mission 2020(NEMMP 2020).The NEMMP 2020 set a target of having 6-7 million electric vehicles on the road by 2020.The movement towards electric mobil
72、ity became stronger in 2015 with the announcement of the Faster Adoption and Manufacturing of(Hybrid&)Electric Vehicles(FAME)scheme.The FAME scheme provides subsidies for the purchase of electric vehicles and for the installation of charging infrastructure.The FAME scheme has been revised twice,in 2
73、019 and 2022.In 2022,NITI Aayog released a draft policy on Battery Swapping to address the challenges related to upfront costs of purchasing EVs,range and safety.The governments efforts to promote the adoption of EVs have been successful in recent years.2.3 Central PolicyCurrently,at national level
74、India has devised a 3 pillar strategy to promote local manufacturing ecosystem development for EVs Faster Adoption&Manufacturing of(Hydrid&)Electric(FAME Phase-2)Vehicles restrictions(subsidies only for vehicles meeting local sourcing targets),Import Restrictions and localisation targets under Phase
75、d Manufacturing Program(PMP)and third,Fiscal Incentives or PLI to support local manufacturers to develop the capacity to make and scale the EV components and battery production.PLI for Electric Mobility:Strengthening Eco-System Towards Vision 203016Advanced Automobile and Auto Component Industry(Adv
76、anced Automotive Technology AAT)is for boosting EV component manufacturers and OEMs based on sales of BEVs and Hybrids.While PLI for Advanced Chemistry Cells(ACC)aims to facilitate the development of gigafactories for battery manufacturing capacity of 50 GWh.FAME-2 is primarily a demand side incenti
77、ve providing subsidies to e-2W(private and commercial),e-3W,e-4W(commercial)and e-buses.Apart from purchase incentives FAME-2 also has budget outlayed for capital incentive for public charging infrastructure.For charging of e-buses,FAME aims to provide one fast charger for every 10 electric buses2.3
78、.1.1 FAME Scheme(I&II)As part of the National Electric Mobility Mission Plan(NEMMP)2020,the Department of Heavy Industry(DHI)formulated the Faster Adoption and Manufacturing of(Hybrid&)Electric Vehicles(FAME)India Scheme in 2015.The FAME India Scheme aims to promote the manufacturing of electric and
79、 hybrid vehicle technology and ensure its sustainable growth.During Phase-I,it focused on creating demand for electric vehicles through incentives and grants for various vehicle segments,resulting in about 2.78 lakh supported EVs via demand incentives.Phase-II of the FAME Scheme,approved with an out
80、lay of INR 10,000 Crore,aims to support demand for EVs by supporting 7,000 e-Buses,5 lakh e-3 Wheelers,55,000 e-4 Wheeler(Commercial purposes)and 10 lakh e-2 Wheelers(including commercial&private).Starting from June 2023,for 2 wheeler subsidy is capped at INR 10,000 per kWh with cap of 15%of exfacto
81、ry,while for other segments expect e-buses the cap is limited to 20%of the ex-factory price.e-Buses have higher incentive value of INR 20,000 per kWh.Of the allocated INR 10,000 Cr,INR 8,596 Cr is for demand incentives with additional INR 366 Cr carry-forwarded from FAME-I primarily for e-buses and
82、INR 1,000 Cr for development of charging infra.As of 21st July 2023,INR 4,157 Cr for demand incentives has been exhausted.With announcements of INR 800 Cr for setting up fast charging stations approved a significant chunk of budget for charging infra is also expected to be utilised.Electric Mobility
83、:Strengthening Eco-System Towards Vision 2030172.3.1.2 Phased Manufacturing ProgramThe Phased Manufacturing Program(PMP)is a government initiative to promote the local manufacturing of electric vehicles(EVs)in India.The PMP offers a graded duty structure for imported EV parts,with lower duties for p
84、arts that are locally manufactured.This is intended to encourage OEMs to invest in local manufacturing and create jobs in India.Under the PMP,the government charged 0%duty for key child parts,5%for battery packs,and Lithium ion cells till 2021.However,the import duty on child parts and battery packs
85、 is directed to a hike of 15%and Lithium ion cells to a hike of 5%to push the local manufacturing.This is a welcome move,as it will further incentivize OEMs to localize their production.The government has also focused on local assembly capability development through PMP and FAME.The focus till 2019
86、was on importing semi knocked down and complete knocked down kits.Further,only the import of critical components was encouraged.Going ahead,the governments strategy is to promote local manufacturing ecosystem development through FAME Scheme,Import Restrictions,Fiscal Electric Mobility:Strengthening
87、Eco-System Towards Vision 203018Incentives.The plan is to achieve Tier-1 level localization first and then eventually achieve the Tier-2 level child part localization.2.3.1.3 Performance Linked Incentive(PLI)Scheme PLI ACC:The Government of India approved the PLI scheme for ACC battery manufacturing
88、 in February 2022,with an INR 18,100 crore outlay over five years(2023-2028)to establish 50 GWh local battery production,encouraging domestic manufacturing of ACC batteries and components for the EV industry.Eligible companies will receive a 25%incentive on incremental investments and sales,expected
89、 to attract over INR 60,000 crore investments and generate 50,000+jobs,propelling India as an EV global leader.In the initial round of allotment Rajesh exports,Ola electric and Reliance New Energy emerged as winners with combined capacity of 30 GWh.The second round of invitations bidding for the rem
90、aining 20 GWh is in process with Ministry of Heavy Industries(MHI)facilitating a stakeholder consultation with industry representatives for their inputs and suggestions before the start of the re-bidding process PLI Auto and Auto Components:The government approved the PLI scheme for auto and auto co
91、mponents in March 2022,offering financial incentives of up to 18%to boost domestic manufacturing of advanced automotive technology(AAT)products and attract investments in the automotive value chain.Scheme has well-defined targets for local domestic investments added with 50%minimum localisation to b
92、e qualified for any incentive.With an INR 25,938 crore outlay over 2022-2027,eligible OEM Champions will receive incentives ranging from 13-16%of determined sales value for BEV&FCEV vehicles.For Component Champion,8-11%of determined sales along with an additional 5%for BEV&FCEV vehicle components.Th
93、e scheme is anticipated to draw over INR 80,000 crore investments and generate 7 lakhs+jobs in the automotive industry2.3.1.4 Battery Reuse and Recycle PolicyThe Government of India has taken several initiatives to promote the reuse and recycling of Advanced Chemistry Cell(ACC)batteries primarily vi
94、a Battery Waste Management Management Rules 2022.This policy has set out the governments vision for battery recycling in India,including the development of standards,the provision of financial incentives,and the raising of awareness about the importance of battery recycling.The current battery value
95、 chain consists of raw material extraction then battery manufacturing followed by first application use and then disposal.Battery reuse and recycle will introduce alternate value chains where batteries are first re-purposed for a 2nd life application in energy-storage services that is suitable to th
96、eir reduced performance capabilities and when battery can no longer meet its performance requirement,it is recycled for extraction of Co,Ni,Al,Cu etc.Introduction of policy related to reuse and recycle of ACC batteries is needed which can help reduce the battery price further and improve availabilit
97、y of raw materials in future.2.3.1.5 Charging and Swapping Infrastructure PolicyThe Indian government is actively promoting charging infrastructure and battery swapping to support the EV industrys growth.This addresses the lack of charging infrastructure,a key barrier to EV adoption.The target is to
98、 establish 5 lakh public charging stations by 2025,with financial assistance to states and private companies.In addition to Battery Charging Stations(BCS),Government is also promoting Battery Swapping Stations(BSS)via released draft battery swapping.Policy focus on standardizing battery specificatio
99、ns and creating a battery swapping network by rollout of BSS in phased manner;prioritize metropolitan cities with population 4 Million+for development of battery swapping network in 1st phase.Electric Mobility:Strengthening Eco-System Towards Vision 203019However,with opposing view about standardisa
100、tion from swapping players,govt is redrafting terms related to standardisation&interoperability norms.2.3.1.6 CAF-II NormsCorporate Average Fuel Efficiency(CAF)regulations aim to reduce fuel consumption and carbon dioxide(CO2)emissions from vehicles.India currently has a CAF limit of 130 grams of CO
101、2 per kilometre(gmCO2/km),and most of the original equipment manufacturers(OEMs)in India are meeting this target.CAF norms are being introduced in India in two phases,with stricter targets from FY23.Electric Mobility:Strengthening Eco-System Towards Vision 203020The government has also announced pen
102、alties for violating CAF norms.For non-compliance of norms up to 0.2 litres per 100 km,the penalty will be INR 25,000 per vehicle.For non-compliance of norms above 0.2 litres per km,the penalty will be INR 50,000 per vehicle.The CAF regulations are a significant step towards reducing fuel consumptio
103、n and CO2 emissions from vehicles in India.They are also likely to boost the adoption of EVs in India.These stricter targets&penalties are likely to push OEMs to launch alternate greener power-train based vehicles like electric vehicles(EV)products in India.2.3.2 State-wise Policies25 States&Union T
104、erritories(UT)in India have notified EV policy and three states/UTs have drafted EV policy.Of these states,16 released draft policies over the last two to three years,indicating the growing commitment of states in India towards EV adoption.Policy promoting EV ecosystems are directed into:1.Demand si
105、de incentives:subsidies for purchase,On-road tax exemptions,electrification of public transport(state transport buses)2.b)Supply-side incentives:Land rate rebates,Capital Subsidies,stamp duty exemptions,Electricity Duty Exemption and Power Tariff reimbursements for MSME to Mega Projects.3.Ecosystem
106、strengthening:Charging infra subsidies,R&D grants,up-skilling of labours etc.These policies are helping to make EVs more affordable and accessible,and they are also helping to build the necessary charging infrastructure to support the growth of the EV market.Some of the key states with solid policy
107、impetus for developing EV ecosystem:Maharashtras EV policy aims to achieve at least 10%EVs by 2025 with 25%electrification of public transport.Maharashtra provides strong demand incentives ranging from up to INR 10,000 for 100,000 e2W to INR 1.5 Lakh for e4W PV and 1 Lakh for e4W CV(N1),road tax exe
108、mptions,including support Electric Mobility:Strengthening Eco-System Towards Vision 203021for scrappage up to INR 25k for e-4W.On the supply side,Maharashtra actively aims to invite players to set up Gigafactory for battery production coupled with various incentives under the industrial policy.Mahar
109、ashtra also provides capital subsidies for equipment purchases up to 50%for fast charging.The Uttar Pradesh government has set ambitious targets for adopting electric vehicles.The government aims to have 1 million EVs on the road by 2024 and to transition 100%of public transportation to EVs by 2030.
110、It has formulated Comprehensive Electric Mobility Plan(CEMP)to guide the transition to EVs and invest in charging infrastructure.The government is also offering incentives to encourage the purchase of EVs,such as tax breaks and subsidies and has allocated an investment target of INR.300 billion.Tami
111、l Nadu EV policy targets investments for EV OEM,component and battery manufacturers with capital and operational subsidies depending on size investment.Apart from attractive schemes around manufacturing,there are demand incentives,support for R&D and skill development targeting to train at least 10,
112、000 personnel in EV technology and Maintenance.On the charging Infra front,Tamil Nadu targets installing 500,000 public charging stations(PCS)across cities,highways,and public parking areas.Andhra Pradesh(AP)aims to electrify commercial&logistics fleets in the top 4 cities by 2024 and all cities by
113、2030.In terms of demand incentive,it provides a 100%road tax exemption.Andhra Pradesh EV policy strongly focuses on supply-side incentives targeting the manufacturing of EVs,including components and the development of clusters.The policy aims to provide a 25%capital subsidy on Fixed Capital Investme
114、nts(FCI),fixed power tariff reimbursements,and skill development incentives.INR 500 Cr is also outlay for R&D grants in the mobility space.AP also has capital subsidies for both battery swapping(BSS)&battery charging stations(BCS)Haryanas EV policy aims to make the state a global hub for electric mo
115、bility development and manufacturing of Electric Vehicles(EVs).On the demand side,Haryana provides subsidies up to 30%of subsidy on-road price of EVs as reimbursement directly to the buyer,along with exemption on registration,including incentives even for electric tractors.For charging infra develop
116、ments,there is a 25%capital subsidy,land in major cities,and aims for standard creation in charging.On the supply side,Haryana offers a capital subsidy of 20%of FCI for mega projects along with an array of other benefits.Telangana Electric Vehicle and Energy Storage Policy aims to attract investment
117、s worth US$4.4 billion in the EV sector by 2030 and to create 120,000 jobs in the sector.To support these goals,the Telangana government has set up an innovation fund to support the development of new EV technologies and has exempted electric vehicles from road tax and registration fees.It is also i
118、nvesting in the development of charging infrastructure for electric vehicles,with plans to set up charging stations every 50 km on highways.Delhi govt.aims to promote electric buses in public transportation.The government has set a target of 70%of buses in public transportation to be electric by 202
119、5.It is also working to develop charging station infrastructure and make last-mile connectivity 100%electric.Gujarat EV policy incentivizes e-taxis,promotes EV and component manufacturing,and provides subsidies for EV charging stations.It offers incentives on e-taxis,such as a waiver of registration
120、 fees and road tax and also promotes EV and component manufacturing,such as batteries and e-motors.The policy provides a 25%capital subsidy on machinery for the first 250 EV charging stations.Electric Mobility:Strengthening Eco-System Towards Vision 203022State EV policies are largely aligned with c
121、entral policies targeting demand inside incentives&infra improvements for EV adoption and a variety of supply-side incentives to develop auto clusters for manufacturing of batteries,components and EVs.States,too,see immense potential for economic growth&industrial development in the nascent e-mobili
122、ty,which is likely to push for execution of notified policies for greater EV adoption.2.4 FAME-II impact on EV Sales E-2W under the FAME-II scheme has seen cap being changed twice under the policy period.First,the subsidy was increased from an initially announced INR 10,000 per kWh at a 20%ex-factor
123、y price cap to INR 15,000 per kWh capped at a 40%ex-factory price from Jun 2021.The increased subsidy rate and e-2W sales growth starting from mid-2021 resulted in faster exhaustion of the initial outlay of INR 2,000 Cr for two-wheelers.With FAME-II extended till 2024,to provide continued support Go
124、vt has reduced the subsidies back to INR 10,000 with a cap of 15%on ex-factory price,making effective subsidies in the range of 6,000 to 9,000 INR per kWh depending upon battery size&ex-factory price of the two-wheeler.Additionally,the planned amount for e-2W was increased to INR 3,500 Cr by reducin
125、g the amount allocated to e-3W and e-4W.Since the initial outlay of INR 2,500 Cr to e-3W remains largely unutilized(95%market share among various battery technologies.This is followed by E2W,which will generate an annual demand of 33.3 GWh in 2030.The annual potential battery energy demand in 2030 d
126、ue to EVs itself is expected to be 102 GWh,which would demand at least 10 gigafactories each of 10 GWh just to meet EV demand.With a dynamically growing EV market,battery chemistry is expected to evolve to meet the changing needs of consumers and manufacturers.Currently,the battery trend is dominate
127、d by LFP and NMC,with LFP being preferred by E4W and NMC being predominantly used by E2W.In electric buses and trucks,battery technology is extremely critical considering the safety,performance parameters and high asset utilisation basis which majority of the manufacturers using NMC batteries have n
128、ot had any safety or performance concerns which have been observed in multiple bus and truck manufacturers using other chemistries.Therefore,creating value with such technologies is always preferable rather than reducing cost.Several key players are investing in setting up lithium-ion battery(LiB)ma
129、nufacturing facilities in India to promote the adoption of electric vehicles(EVs)in the country.Electric Mobility:Strengthening Eco-System Towards Vision 203033Ola Electric,Reliance,and Rajesh Export have been selected under the PLI scheme for receiving incentives for cell manufacturing and are expe
130、cted to start cell manufacturing at the latest by 2024.Traditional battery manufacturers presence is inevitable in lithium-ion battery manufacturing.These companies have an excellent understanding of the automotive industry and have long-term experience working with OEMs.Non-traditional players such
131、 as Mahindra,JBM Green Energy,India Power,Thermax,Tata,and startup companies are looking to enter the pack manufacturing business,with some plans to explore cell manufacturing in the future.Tata Group has announced in July its plans to set up a global Lithium ion cell manufacturing plant in UK with
132、a target of 40GW annual capacity.With an investment of over 4 Billion GBP,Tala plans to produce high quality,high performance sustainable cells and packs for applications including both electric vehicles and renewable energy sector.Production is planned to start from 2026.Additionally,Tata also plan
133、s to maximise clean energy utilizaition with a target of 100%down the line and set up recycling and resue facilities to deliver a circular economy ecosystem.4.1.2 Indias Battery Chemistry Evolution Speculative OutlookWith a dynamically growing EV market,battery chemistry is expected to evolve to mee
134、t the changing needs of consumers and manufacturers.Currently,the battery trend is dominated by LFP and NMC,with LFP being preferred by E4W and NMC being predominantly used by E2W.Electric Mobility:Strengthening Eco-System Towards Vision 203034Till 2030,LFP chemistry is expected to have continued do
135、minance in batteries owing to their high energy density and advanced manufacturing capabilities across the world.Currently popular conventional NMCs(NMC 611/NMC 532)are expected to be replaced by more advanced NMC 811 with higher energy density and lesser cobalt intensity,which is a scarce mineral w
136、ith insufficient reserves in India.Additionally,other LiB,including Lithium Sulphur,Lithium Air,Zinc Air,Lithium Carbon and other non-LiB chemistries like Solid State,Sodium ion,Flow battery,Semi-Solid are expected to start gaining footing by 2030.4.1.3 Cell cost breakdown and Localization Potential
137、A deeper dive into LFP,NMC batteries allows them to be broken down into two major components:cell and pack components.The pack components and pack assembly constitute about 30%of the battery component value.The cells can be further broken down into Cathode,Anode,Separator,and Electrolytes.Cell catho
138、de is the highest cost contributor in LFP(21%)as well as NMC(42%).The downstream supply chain,including cathode,anode separator,and electrolyte,is at a nascent stage in India due to non-availability of raw materials,limited manufacturers,and uncertain demand security.As a result,despite these challe
139、nges regarding raw material for cathode and anode,India can still unlock more than 90%of packing component value,70-90%of LFP cell value,and up to 43%of NMC cell value.India can achieve this only by fostering domestic cell manufacturing capacity and by building a robust supply chain for other raw ma
140、terials like iron oxide,phosphate,and graphite,etc.in the case of LFP.Electric Mobility:Strengthening Eco-System Towards Vision 2030354.1.4 Major Players operating in Indian Battery Space Several key players in India are investing in setting up lithium-ion battery(LiB)manufacturing facilities in Ind
141、ia.Government intends to take fresh bids for the allotment of the remaining 20 GWh under the second phase of the PLI-ACC scheme.India aims to develop cell manufacturing capabilities and establish itself as one of the major cell manufacturing hubs.4.1.5 Battery Localization Potential in IndiaThere is
142、 a critical need to localise the cell supply chain.The cell materials constitute around 40%of its cost,and India has minimal availability of cell raw materials.If India targets to achieve 60%of the value addition(as mandated by the PLI),it needs to localise the manufacturing of anode,cathode,electro
143、lyte,and separator.Electric Mobility:Strengthening Eco-System Towards Vision 2030364.1.5.1 Cell Components Localisation Anode:Companies such as Epsilon,Himadri,HEG etc.are exploring and taking steps to manufacture anode locally.Cathode:India doesnt have many cathode manufacturers yet given the scarc
144、ity of raw materials.Epsilon Carbon has tied up with a US company to explore cathode manufacturing business in India.A few startups are also venturing into cathode manufacturing.Electrolyte:Some of the Indian companies,such as Neogen Chemicals and Gujarat Fluorochemicals,have recently invested in an
145、d started manufacturing electrolytes for lithium-ion batteries in India.Separators:Companies such as Daramic(an Asahi Kasei Group company)currently manufacture PE separators in India for lead acid batteries,and they believe they are future ready for any transition into Li-ion batteries.4.1.5.2 Raw M
146、aterial To ensure a steady supply of raw materials for lithium-ion battery production in the country,India will be obtaining lithium and cobalt from countries like Australia,Argentina,Bolivia,and Chile.A joint venture company,Khanij Bidesh India(KABIL)Ltd.,has been created by the Ministry of Mines w
147、ith the National Aluminium Company(NALCO),Hindustan Copper(HCL),and Mineral Exploration Corporation(MECL).State-owned NMDC(National Mineral Development Corp.)is looking to mine lithium,cobalt,and nickel through Legacy Iron Ore Ltd.in Australia.NMDC owns a 90%share in Legacy Iron Ore Limited.NMDC is
148、also looking for cobalt,nickel,and gold mines in various geographies,including Africa.Hence,once these G2G collaborations pick up,India will solve major challenges with respect to raw materials access for cell manufacturing.Electric Mobility:Strengthening Eco-System Towards Vision 2030374.1.6 Challe
149、nges in Battery Supply ChainThe active materials used in such cells require sophisticated manufacturing processes that are cost-competitive only at a large scale.These supply chains have already been set up in other countries,like China and South Korea,and setting the same in India will be challengi
150、ng unless there was sufficient scale.Meanwhile,there is no real know-how in terms of cell manufacturing in India barring some researchers.Indian companies wanting to set up lithium-ion cell plants would have to tie-up with overseas companies for technology assistance.These are some of the key challe
151、nges that the industry faces today and needs to overcome in order to play a major role in the global battery manufacturing ecosystem.4.1.7 Traction Motor&InverterThere are many different types of motors.While 2W and 3W applications use many types of motors,PMSM motors are exclusively used for EV 4W
152、and Bus applications in India.These motors currently face a supply chain threat due to a global shortage of metallic materials,but research is ongoing across the world to come up with innovations where the magnetic material quantity required per motor can be significantly reduced.Electric Mobility:S
153、trengthening Eco-System Towards Vision 203038Magnets,copper coils,lamination cores,and shafts are the four main components of motors.Among motor subcomponents,the sourcing of magnets is an issue,as China controls the mining of 79%of the worlds rare earth metals and is also a major source of supply t
154、o India.The copper coil and Lamination Core industries are traditionally very developed in India.Traditional companies operating in this space can start supplying these components for local EV motor manufacturing as soon as they get some demand security.Inverter:Inverter is another key component of
155、an EV.They use Silicon wafer chips and MOSFETS to function posing a critical supply chain threat due to the global semiconductor shortage.Silicon based MOSFETs have traditionally been used for EV charging applications.But the technology does not work well for high-charging applications.Hence theyre
156、unsuitable for fast charging applications like SUVs&CVs.Silicon Carbide based chipsets,though expensive,are well suited for fast charging applications and are gaining traction in the market.Silicon Carbide based chips market share is expected to rise as it support high voltage charging.Advancements
157、in MOSFET technologies will allow SiC gen2 chips to enter the market by 2024-25 while Gen1 are already in application.Gen 2 chips use lesser silicon wafers hence making them less prone to supply chain risks.4.2 Future Potential of EV Supply Chain in IndiaThe future potential of the Electric Vehicle(
158、EV)supply chain in India is marked by promise and challenges,particularly concerning the localization of certain critical components.In the battery segment,achieving localization of the anode appears feasible due to the availability of raw materials within the country.However,full localization for t
159、he cathode,separator,and electrolyte faces limitations,mainly due to the shortage of essential raw materials and the dependency on imports.Despite this,there is scope for domestic manufacturing of crucial components used in battery assembly,such as the Battery Management System(BMS)and Thermal Pads,
160、which would bolster the overall domestic EV supply chain.Turning to the motor segment,localization presents a unique set of obstacles.Securing the magnetic core domestically is currently not viable,as China dominates the mining of approximately 79%of the worlds rare earth metals,including those util
161、ized in motor cores.Consequently,nearly 92%of Indias imports in this sector are sourced from China,creating a significant dependency.Achieving full localization of the magnetic core necessitates exploring alternative sources or advancing technologies that do not rely on rare earth metals.Electric Mo
162、bility:Strengthening Eco-System Towards Vision 203039On a positive note,the localization of the copper coil used in EV motors offers promising prospects for India.Despite limited reserves of copper ore,the country boasts a competitive copper industry with substantial smelting and refining plants tha
163、t process copper concentrates into pure metal,copper cathodes.This favorable landscape positions India to enhance the localization of copper coil production,thereby contributing to the domestic growth of the EV supply chain.Another potential avenue for localization lies in manufacturing metal sheets
164、 of the required thickness for the motors MG core.With concerted efforts from Indian companies to initiate such production,the domestic sourcing of MG cores could become a tangible reality.In conclusion,the future potential of the Electric Vehicle supply chain in India hinges on strategic localizati
165、on efforts and the concerted resolve to overcome raw material dependencies.*Electric Mobility:Strengthening Eco-System Towards Vision 2030405.Charging and Swapping InfrastructureEV Charging Infrastructure is a critical enabler for fuelling EV adoption across vehicle segments.While 2-Wheeler which cu
166、rrently has the highest EV penetration,is dominated by slower home-charging units,increasing adoption amongst performance 2-W,3-W,4-W,Buses and commercial vehicles would require“Faster,Wider&Discoverable Charging Networks”and modes like Battery Swapping.Public charging infra value chain involves mul
167、tiple stakeholder ranging from Charge Point Operators to Power Utility Companies(DISCOMs).In charging infrastructure models,Charge Point Operators(CPOs)are responsible for deploying&maintaining the“charging points”or Electric Vehicle Supply Equipment(EVSE).Charge Point Operators from government incl
168、ude EESL,REIL,BESCOM,Other State Nodal Agencies(SNAs)and Retail Arms of Govt Oil Making Companies which are electrifying their fuel stations.In private space,players include Tata Power,Statiq,Fortum,JBM Group,Kazam,Magenta Mobility,Ather Grid,Zeon and many others.All CPOs also have tie-ups with Netw
169、ork Service Providers(NSPs)for data transfer necessary for real-time status/monitoring of EVSEs.CPOs have their app offerings/RF ID cards,which the users must have to utilise at the charging point.With multiple CPOs in the market,consumers would need to install multiple apps and have multiple cards,
170、which are the cause of an inconvenience.Added to this inconvenience are different types of charging plug types,especially amongst fast charging in 2 wheelers where there is lesser convergence on plug-in contrast to EV 4-wheelers in India.The inconvenience translates to the need for charger interoper
171、ability and e-MSPs(e-mobility Service Providers)who can access multiple charging point operators via a single interface/app.In India,e-MSPs are slowly emerging with several Charge Point Operators and EV penetration,at least amongst 2-wheelers,has started reaching a threshold where there is a need fo
172、r e-MSP.ElectricPe,Numocity,and ElectricFL are a few of the players.Electric Mobility:Strengthening Eco-System Towards Vision 203041DISCOMs(Distribution Companies)play a vital role by providing necessary support for setting up electric infra&providing power to charging stations.In some cases,the DIS
173、COMs are charge point operators in certain areas,ex,in Bengaluru,where BESCOM(Bangalore Electricity Supply Company)also has its charging stations within the city.Hence,across the value chain,currently,India has a healthy mix of players,especially among the Charge Point Operators.Although current EV
174、penetration levels and number of CPOs operating in a given region/city havent reached a point where lack of interoperability is a bottleneck,it is expected to be the case in coming years.Addressing this requires sustained collaboration between existing players and more decisive policy impetus.5.1 Ty
175、pes of Chargers&InteroperabilityApart from the proprietary charger types.Public Charging Infra in India is largely limited to standards shown in table.Type of compatible chargerDiagramLevelPower(kW)Type of VehicleType 1,Bharat AC-001 AC(Level 1)=3.5 kW2/3/4-WheelerBharat DC-001 DC(Level 1)=15 kW2/3/
176、4-WheelerType 2,AC(Level 2)95%)and fast charging requirements to minimize charging time resulting in time value of money for end user.Of various plug types CHAdeMO and CCS-2 are available Level 3 DC fast charging plug types in India with CCS-2 available in 20%of the public charging stations across t
177、he country and CHAdeMO available across 7.3%of the charging stations as of May 2023Type-2 AC fast charger up to 22kW power is also offered by 42%of public charging stations Electric Mobility:Strengthening Eco-System Towards Vision 203044Under FAME Phase-2,Govt has sanctioned INR 800 Cr to further se
178、tup 7,432 fast charging stations at retail outlets of Oil Making Companies.Of the sanctioned fast charging stations Indian Oil will have 3,438 sites,BPCL will have 2,334,HPCL will 1,660 sites for charging stationsApart from OMCs hotel chains,other commercial players are also setting up fast charging
179、 in collaboration with charge point operators.Hence fast charging stations are rapidly growing driven by government support and CPOs investing around the DC fast charging.5.2.2 Battery Swapping StationsBattery Swapping,derived from the more general Battery as a Service umbrella,is a business model i
180、n the clean mobility sector and has seen widespread adoption in countries like China and Taiwan where 2W and 3W adoption is high.As of now,there are several companies setting up stations with basis in tier-1 cities and E-3W and E-2W are the focus segments.Sun-mobility,Gogoro,Battery Smart are few of
181、 the players to name.Sun-mobility has over 400+stations across country as of June 2023 ballooning from 100 stations over from last year.Sun mobility aims to reach 3 million swaps per day by 2025.While others like battery smart have aims to expand to 35 cities by end of 2023.Gogoro has also announced
182、 major investments in Maharashtra and has partnered with Zypp Electric in Delhi for pilots.Battery Swapping is particularly effective model for commercial 3 Wheeler&2 wheeler reducing the capex in terms of acquisition cost of vehicle,which has been a barrier in case of EVs.With multiple players in t
183、he game a sustainable growth is expected in the swapping landscape over year.5.3 Key Business Models and Competitive Advantages5.3.1 ChargingStationBenefits&EcosystemBenefits to the End user Standardization Sockets,Communication protocols and the equipment of chargers are standardized.Both AC and DC
184、 charging sockets have to meet relevant sections of BIS standard IS 17017.This provides a hassle free experience for the user as she gains access to a wider charging network.Convenience Larger form factor batteries require automation to swap and adds to the CAPEX.Fixed charging will be more feasible
185、 for the CPO in terms of cost.Benefits to the CPO Lower initial CAPEX CPOs do not own the EV battery and is instead owned by the individual.Hence,the initial CAPEX is lower compared to a swapping equipment.The ecosystem consists of the CPO in the centre and deals with multiple stakeholders who provi
186、de the CPO different services like land,electricity,hardware,software,system integration,etc.Electric Mobility:Strengthening Eco-System Towards Vision 2030455.3.2 BatterySwappingBenefits&EcosystemBenefits to the End user Lower Downtime Compared to fixed battery system which on an average takes 4-5 h
187、ours to fully charge,average time for swapping is less than three minutes.No replacement cost of batteries Battery life of a typical 2/3 wheeler averages between 4-5 years.Given the fluctuating raw material prices and extreme weather conditions sometimes leading to faster degradation of batteries,no
188、t owning the battery presents as a more feasible option to the price sensitive Indian consumers.Lower upfront cost While TCO of an electric 2W is lower,consumers still have to pay a premium compared to its ICE counterpart during the upfront purchase.However,BaaS allows the consumer to save up to 40%
189、by opting only for the vehicle.Lower stress on grid Better distributed load management-Batteries from swap stations can be charged during non-peak hours.Vehicle users of fixed batteries on the other hand normally charge their vehicles late in the evening after their working hours thus,leading to imm
190、ense stress on the grid.Benefits to the CPO Lower space requirement Space required for same number of cars is more for fixed charging since the vehicles need to be parked for the entire duration.A typical swap station is like an ATM machine-covers 20%real estate area of a typical charging station.Th
191、roughput in terms of number of vehicles leaving the station with charged batteries can go up to 5X in a swap station vs a charging station.Electric Mobility:Strengthening Eco-System Towards Vision 203046Benefits to the vehicle OEM and dealers Additional revenue stream Swapping service can be bundled
192、 with the vehicle and OEMs can generate revenue from number of swaps carried out during the entire life of the vehicleCompared to a fixed charging ecosystem,Battery swapping includes the added element of a battery and is usually developed in-house by the CPO but manufacturing can be outsourced.On a
193、broad level,the players in both ecosystems are the same,and only the final offering(Battery+Vehicle)differs.5.4 DISCOMs and Power InfrastructureWhile EVs on road are set to increase,there will be an increased demand for on-the-go public chargers across cities and highways going forward.Setting up of
194、 required charging infrastructure relies significantly on available load from nearby transformers and related time and costs(Service Line cum Development charges or SLD charges).Lack of available infrastructure may disincentivize EV charging installations.Grid Infrastructures capability to address t
195、he fluctuating load and supply is of perenial importance.On one had at demand side based on BEE reportv,EVs peak demand can contribute between 20%to 70%of the peak load in 2030 depending on geographical location despite consuming only 2-18%of total units consumed;on other hand on supply end by 2030,
196、50%of generation is to be fueled by non-fossil fuel sources dominated by renewables like solar&wind which is intermittant supply source.By available public estimates,in 2030 cars alone would have could have demand varaition anywhere between 9 to 26 TWh.Although combined effect of the same is between
197、 2-5%of units consumed at 2030;however it is peak power demand fluctuations which is expected to pose challenges to local grid resiliance.Addressing this requires actions from both supply-demand side.On supply sides DISCOMs need to ramp up the infrastructure and for grid resilience,existing standard
198、s of grid connectivity,quality of power and registrations needs to be improved.On demand side increased adoption of V2G and home with battery based dynamic storage needs to enhanced for improving grid resiliance.*Electric Mobility:Strengthening Eco-System Towards Vision 2030476.Way Forward Industry
199、Perspective6.1 FAME SchemeIndustry experts in the Indian EV sector have voiced their opinions on the FAME scheme,highlighting the need for its extension beyond March 2024,for three to five years.Stability and long-term clarity in policy are essential for businesses to plan investments effectively.Mo
200、reover,the focus of the scheme should expand to support public transport and heavy-duty vehicles.Quality control investments for lithium cell and pack manufacturing should also be incentivized to ensure global competitiveness.A strategic approach with well-defined sunset clauses is crucial to sustai
201、nably aid the EV ecosystem.The government should present a long-term roadmap with a set percentage target penetration and/or a timeline to ensure the desired localization and also give clarity to Industry players regarding the timeline of the incentives.6.2 PLI ACC Is it the right way to go about ba
202、ttery localization?Electric Mobility:Strengthening Eco-System Towards Vision 203048The PLI scheme,while a great first step towards battery localisation,needs certain adjustments.While the scheme aims to promote domestic battery manufacturing,it needs to be modified to be inclusive by extending incen
203、tives to both large and small players.Additionally,it is important to secure a stable supply chain for critical raw materials to enable gigascale battery production.The PLI ACC scheme should not solely concentrate on cell manufacturing but should also extend support to the entire upstream supply cha
204、in,including Tier-2 suppliers,CAM,pre-CAM producers,and battery recyclers.Moreover,the scheme needs to be modified to address concerns related to raw material procurement and processing,and strive for self-sufficiency in critical mineral availability to strengthen Indias battery production capabilit
205、ies.6.3 Strengthening the Downstream Supply ChainStrengthening the downstream supply chain of electric vehicles requires implementing various policy measures and incentives.It is strongly recommended to roll out the battery swapping policy,which can facilitate faster charging and enhance the conveni
206、ence of EV users.Reducing the GST on swapping and charging service providers is crucial in making the business more profitable and encouraging the growth of the ecosystem.Additionally,lower GST rates on EV batteries is recommended to promote greater affordability and accessibility of electric vehicl
207、es.Furthermore,there is a need for policy steps such as tax incentives(TAX SOPs),targeted subsidies,and encouragement for exporters to support the supply chain.Duty reduction on critical components can help manufacturers overcome working capital constraints,allowing them to scale up their procuremen
208、t activities.Incentives and policies for precursor manufacturing,recycling,and repurposing are also deemed essential to foster a sustainable and circular supply chain.6.4 Improving Battery Supply Chain&LocalisationElectric Mobility:Strengthening Eco-System Towards Vision 203049Strengthening the lith
209、ium-ion battery supply chain and localization necessitates a multi-pronged approach.Investing in research and development through grants and promoting investments in mineral refining capacity are crucial to bolster domestic production and reduce reliance on imports.Establishing a robust recycling ec
210、osystem will ensure sustainable resource utilization.To achieve localization,there needs to be a focus on key components like High-Silicon graphite,Pure Silicon,and Pure Metal Anode technology,while conducting R&D on High-voltage and solid-state electrolytes to determine their potential for mainstre
211、am adoption.A matured EV industry is essential to enable phase-wise localization,indicating the need for stringent standards and quality manufacturing policies to enhance competitiveness.R&D centers and labs play a significant role in driving innovation and technological advancements in the battery
212、sector.Furthermore,India should explore alternate chemistries beyond LFP and NMC,such as NCA or Lithium-Sulfur,adopting a long-term perspective to ensure adaptability and diversification in the battery technology landscape.By adopting this comprehensive and forward-looking strategy,India can strengt
213、hen its lithium-ion battery supply chain,foster domestic manufacturing capabilities,and position itself as a prominent player in the global electric vehicle market.6.5 Export PotentialWhile experts do believe that India can export EVs and related components to smaller fast developing economies in So
214、uth East Asia,LATAM and MENA.India has already been exporting to various other countries in the ICE segment.With sheer volume,excellence in automotive manufacturing,the export potential of electric vehicles and their sub-components manufactured in India is quite high.But there are challenges to this
215、 as India currently does not have enough R&D investments or volume to compete with China.Hence,India must invest in R&D,localisation and volume to build quality EVs at a globally competitive price.6.6 Priority Lending&Inclusion of MSMEsPriority lending for EVs and the inclusion of MSMEs in the EV sp
216、ace are crucial for the long-term growth of the sector.To support MSME entities,government incentives,ease of setting up companies,and simplified compliances are essential.Experts believe that a competitive incentive-based approach,rather than high tariffs,Electric Mobility:Strengthening Eco-System
217、Towards Vision 203050would yield better results in encouraging MSMEs participation in the EV industry.While localization is vital,current market maturity suggests that initial emphasis should be on EV adoption,even if it means gradual localization to ensure the sustainable development of the EV manu
218、facturing ecosystem in India.In addition to priority lending,other areas like insuring retrofitted vehicles,data-backed insurance and financial products,long-term contract guarantees,and skill development can address concerns of financial institutions in financing EVs.By creating a conducive environ
219、ment and offering appropriate support,India can progressively achieve self-reliance in the EV sector while fostering demand and growth.6.7 Key RecommendationsFAME Schemes Future The FAME Scheme must continue for three to five years more to ensure EV market matures.Benefits for both EV&HEVs need to b
220、e continued.For EVs benefits may be linked to battery size.For HEVs benefits need to communserate to the envoirnmnet gains,efficiency gains and not battery size.The government should present a long-term roadmap with a specified percentage target penetration and/or a timeline.The localization criteri
221、a currently defined must be reviewed to ensure effective localization.Effectiveness of PLI ACC Current PLI for ACC will definitely help developing battery manufacturing capability in India.Government should consider inclusion of MSME in the PLIC ACC scheme.The current scheme is only focused on cell
222、manufacturing.It needs to also focus on upstream suppliers such as CAM and pre-CAM producers and also downstream players like battery recyclers.A new PLI scheme should be introduced to incentivize the of raw material supply.Additional Policy Interventions India should release the battery swapping po
223、licy to push infrastructure development.Allow GST benefit for swapping and charging service providers.Allow GST rationalization for SHEVs in line with global norm.Promote the processing industry so that investments are made further upstream in critical minerals.EV Supply Chain&Export Potential India
224、 should target to expand its exports of EV vehicles and components to smaller fast developing economies like South East Asia,LATAM and MENA.Investments should be made in R&D and Supply Chain so that Indian products become competitive in the International markets.Electric Mobility:Strengthening Eco-S
225、ystem Towards Vision 203051EV Financing:Priority Lending Government should introduce priority lending for EVs.Additionally,there should also be targeted efforts in other areas like ensuring retrofitted vehicles,data-backed insurance and financial products,as these would allow for better financing.In
226、clusion of MSMEs Non-tariff entry barriers on imports to ensure quality of components.Tariff barriers are not favorable for industry development in the long term.*Electric Mobility:Strengthening Eco-System Towards Vision 203052AuthorsNomura Research Institute is a Global Think Tank and the Largest C
227、onsulting Firm in Japan.Established in 1965,it now has 24 Global Offices in 13 Countries with more than 10,000 employees worldwide.Automotive Industry is the core industry vertical within the Consulting Division.The GPG(Global Practice Group)for Automotive has more than 100 consultants engaged in th
228、e Automotive space,helping clients in developing winning strategies and their implementation cutting across the automotive value chain.CASE(Connected Autonomous Shared Electric)is one of the key expertise areas where NRI delivers projects for clients and acts as a think tank helping industry associa
229、tions and government bodies in developing policies.NRI Consulting&Solutions India was established in 2011,is based out of Gurugram with over 50 consultants dedicated to Automotive.https:/ Mobility:Strengthening Eco-System Towards Vision 203053General Disclosures This report is for our close associat
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232、 intervals as appropriate in the analysts judgment Reproduction or dissemination,directly or indirectly,of research data and reports of NRIs analysis in any form is prohibited except with the written permission of NRI The reports include projections,forecasts and other predictive statements which re
233、present NRIs assumptions and expectations in the light of currently available information.These projections and forecasts are based on industry trends,news articles,estimates shared by Global agencies,an estimation model including probabilities,regression,correlations,etc.,circumstances and factors
234、which involve risks,variables and uncertainties.The actual performance of the parameters represented in the report may vary from those projected The industry opinions presented are based on a comprehensive survey conducted by ASSOCHAM&Nomura Research Institute India,gathering insights from veteran i
235、ndustry experts representing various segments of the electric vehicle value chain,including OEMs,Suppliers,Academia,R&D Institutes and Think Tanks.The responses have been categorized to provide a coherent representation of the industrys perspectives.*Electric Mobility:Strengthening Eco-System Toward
236、s Vision 203054Referencesi.Economic survey 2022-23,2022ii.IBEF,Auto Components Industry Report,Feb 2023iii.Financial Express,MG Motor India becomes official mobility partner for G20 Startup20,4 July 2023iv.Live mint,India to advance its EV infra hub ambition at G20 meets,January 2023v.PIB,India and
237、G-20 presidency,10 Dec 2022vi.PIB,Government notifies battery waste management rules,25 Aug 2022vii.The Economic Times,India green energy focus in sync with ongoing G20 presidency,4 Feb 2023 viii.IEA Global EV Outlook 2021,“Policies to promote electric vehicle deployment”,April 2021 ix.Niti Aayog E-
238、Amrit Website,“National Level Policies”x.Niti Aayog Report,Draft Battery Swapping Policy,April 2022xi.Niti Aayog E-Amrit Website,“State Level Policies”xii.Ministry of Road Transport and Highways,“Annual Fuel Consumption Compliance Report”,November 2022xiii.IEA Global EV Outlook 2023 xiv.S&P Global,“
239、EV sales momentum to face challenges in 2023,but long-term expectations unaffected”xv.The Hindu,“Mass transport decarbonisation”,2022 xvi.PIB,“6,586 operational Public EV Charging Stations in India”xvii.Economic Times,“Lithium discovery important for Indias EV push but mining poses serious environme
240、ntal risks”,ET Energy xviii.PIB,“Government notifies Battery Waste Management Rules”,2022 xix.Niti Aayog,“Battery reuse and recycling market in India”xx.Niti Aayog,“Need for Advanced Chemistry Cell Energy Storage in India”,2022xxi.Ministry of Mines,“Critical Minerals for India”,2023xxii.Bureau of En
241、ergy Efficiency,https:/evyatra.beeindia.gov.in/public-charging-stations/xxiii.Mohd.Sahil Ali et.al Brookings India“ELECTRIFYING MOBILITY IN INDIA:FUTURE PROSPECTS FOR THE ELECTRIC AND EV ECOSYSTEM”xxiv.Press Information Bureau(PIB),“Centre sanctions Rs.800 crores under FAME Scheme Phase II for 7432
242、public fast charging stations”xxv.Niti Aayog,“Status quo analysis of various segments of electric mobility and low carbon passenger road transport in India”xxvi.Bureau of Energy Efficiency,“Propelling Electric Vehicles in India Technical study of Electric Vehicles and Charging Infrastructure”*Electr
243、ic Mobility:Strengthening Eco-System Towards Vision 203055About ASSOCHAMThe Knowledge Architect of Corporate IndiaThe Associated Chambers of Commerce&Industry of India(ASSOCHAM)is the countrys oldest apex chamber.It brings in actionable insights to strengthen the Indian ecosystem,leveraging its netw
244、ork of more than 4,50,000 members,of which MSMEs represent a large segment.With a strong presence in states,and key cities globally,ASSOCHAM also has more than 400 associations,federations,and regional chambers in its fold.Aligned with the vision of creating a New India,ASSOCHAM works as a conduit b
245、etween the industry and the Government.The Chamber is an agile and forward-looking institution,leading various initiatives to enhance the global competitiveness of the Indian industry,while strengthening the domestic ecosystem.With more than 100 national and regional sector councils,ASSOCHAM is an i
246、mpactful representative of the Indian industry.These Councils are led by well-known industry leaders,academicians,economists and independent professionals.The Chamber focuses on aligning critical needs and interests of the industry with the growth aspirations of the nation.ASSOCHAM is driving four s
247、trategic priorities Sustainability,Empowerment,Entrepreneurship and Digitisation.The Chamber believes that affirmative action in these areas would help drive an inclusive and sustainable socio-economic growth for the country.ASSOCHAM is working hand in hand with the government,regulators,and nationa
248、l and international think tanks to contribute to the policy making process and share vital feedback on implementation of decisions of far-reaching consequences.In line with its focus on being future-ready,the Chamber is building a strong network of knowledge architects.Thus,ASSOCHAM is all set to re
249、define the dynamics of growth and development in the technology-driven Knowledge-Based Economy.The Chamber aims to empower stakeholders in the Indian economy by inculcating knowledge that will be the catalyst of growth in the dynamic global environment.The Chamber also supports civil society through
250、 citizenship programmes,to drive inclusive development.ASSOCHAMs member network leads initiatives in various segments such as empowerment,healthcare,education and skilling,hygiene,affirmative action,road safety,livelihood,life skills,sustainability,to name a few.NOTESNOTESNOTESThe Associated Chambers of Commerce and Industry of India4th Floor,YMCA Cultural Centre and Library Building 01,Jai Singh Road,New Delhi-110001Tel:(Hunting Line)Fax:,23017009 www.assocham.org