The Big Switch
December 14, 2019

~ By Kavita Ogale

A brief glimpse at how electric vehicles mobility is charging the future of India and China’s road transportation

China has bucked the trend by scrapping subsidies on purchases of electric vehicles in the world’s largest EV market at a time when the world is investing in electric vehicles and suffering a slowdown in the auto industry. China’s sales of new-energy cars, which include plug-in hybrids, fell 28% until June 2019 year on year.

The country has had a robust history of manufacturing her own electric vehicles so far. As per this Bloomberg chart, five of the top 10 electric vehicle manufacturers by revenue are Chinese.

In one of the largest moves that knocked the EV industry to its feet, Beijing decided to focus on improving infrastructure, with an active investment of $60 billion in to its electric vehicle industry such as the network of charging stations and improving the performance of car batteries- the secret ingredient that has galvanised China’s rise in the EV mobility sector. This has fuelled its fleet of electric buses and two-wheelers, accounting for 99% of the global market. While the slump is most expected to hit personal car sales, China is keen to look at the big picture focusing on taxi or ride-hailing companies and government-related fleets.

In a bid to revise its EV policy to counter environmental pollution, increasing urbanisation and fossil fuel dependence, India surprisingly has been doing the same, without making the mistake of initially grossly subsiding sales of individual electric vehicles. Electric vehicle sales account for barely 0.1% sales in India. To accelerate quick and high volume growth of sustainable electric vehicles under its Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles Scheme (FAME) Scheme, India plans to invest in electrifying commercial vehicles like delivery business-run two-wheelers, commuter-driving three-wheelers along with rental services like Ola and Uber.

Meanwhile, Beijing still seems supportive of the EV industry. The country wants one in four new cars sold by 2025 to be electric, according to a draft 15-year development plan released this week. That is an even higher target than in the previous road map, released two years ago, and could be hard to achieve. Currently, EVs only make up roughly 5% of the whole market.

China seems to be at the helm of this vehicular shift.  The country sold 1.1 million cars last year alone, attracting intense competition among automobile giants like Volkswagen and Tesla who are vying for a lion share of the pie.

The International Energy Agency estimates China to account for 57% of electric car sales domestically by year 2030, and is said to already amount to 60% of the 2.1 million plug-in car sales across the world.

The world is gradually sliding away from oil and firing up the electric vehicle segment as nations move away from an oil dependancy and towards more environmentally friendly modes of transportation.

Dubai, the artificial city that made its fortune on oil is looking to reinvent itself as a non-oil economy. The global auto market is shrinking with the peak being in 2017 at 86 million units sold vs 76 million in 2019.

While China has the infrastructural muscle to power its own electric vehicle business, India needs to act upon its renewed zeal to amp up electric vehicle manufacture and sales, boosted by the new Budget incentives and income tax exemptions in the sector. Both India and China have set laudable targets for mass EV adoption in the near future. What remains to be seen is whether consumers will comply to make the big switch.

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