The world is at a crossroads of another industrial revolution but a quintessentially different one from that of the 19th century. A coalescence of information technology and biotechnology-indeed an exotic cocktail-is fundamentally changing the way human beings interact with each other.
Along the way, clean energy, the biggest game changer since the application of the steam engine more than two centuries ago, will metamorphose the modalities of transportation.
Clean energy is revolutionising the way people and goods are transported, forcing the automotive industry to reset its goals. India has been laying much thrust on promoting technologies based on eco-friendly means.
The move to electro mobility is a priority for the government. The first phase of Faster Adoption and Manufacturing of Hybrid and EV (FAME) scheme, which was rolled out in 2015, was a policy step in the right direction, offering subsidies for manufacture of electric vehicles and setting up charging stations.
By pushing electric mobility under FAME Phase II and setting an ambitious target of generating 175 gigawatts of power from renewable energy by 2022, India is loud in its intent to reduce greenhouse gas emissions.
With FAME Phase II, the demand incentive for electric two-wheelers has been hiked to Rs 15,000 per KWh from the uniform subsidy of Rs 10,000 KWh.
With the government encouraging automakers to manufacture flex-fuel engines and states like Gujarat announcing the 'Gujarat Electric Vehicle Policy 2021' to promote mass use of electric vehicles (EVs), India is firmly set on the path to becoming a global EV hub.
The transport industry makes up 10% of India's carbon emissions. The government's objective to convert 15% of the vehicles in the country into electricity-powered by 2030 will reduce air pollution and cut down crude oil imports.
Electric vehicles will account for 30% of vehicle sales in the country by 2030. Apart from environmental gains, this transition is likely to save crude oil imports worth Rs one lakh crore.
The increased use of EVs, on the back of favourable policy initiatives, has far-reaching implications for the automotive industry. The ongoing transformation will shake the auto parts industry more than ever.
In the first place, it will lead to more imports from countries such as Germany as both countries are on their way to stepping up collaboration on next-generation technologies.
More and more German original equipment manufacturers have been entering the Indian electric vehicle market. On the other hand, China will seek to aggressively export EV components to countries like India.
Out of the 250,000 EVs on the road today that use lithium-ion batteries, two-wheelers account for 80%, or 200,000 vehicles, three-wheelers nearly 10% and the rest are four-wheelers.
The fast adoption of EVs will also mean a rise in the consumption of lithium-ion batteries-rechargeable batteries used in a number of industries including automotive and consumer electronics.
The lithium-ion battery market is expected to grow at a rate of 37.5%. At present, the EV segment accounts for 35% market share of lithium-ion batteries.
The rest are used in the telecom sector, data centres, streetlights and other consumer gadgets. By 2030, EV batteries will account for 80% market share in the lithium-ion battery market. Prices of lithium-based products are falling constantly, making it affordable for EV manufacturers.
Most electric vehicles today run on lithium-ion batteries that can be recharged. The batteries used in these vehicles-from two-wheelers to commercial vehicles and public transport buses-are largely the same.
They are made up of lithium, cobalt, nickel, iron and copper. As per the size, configuration and purpose, a lithium-ion battery can perform between 500 and 10,000 cycles of charging and discharging.
The life of a battery lasts up to eight years. It needs replacement when its capacity falls below 80%.
Lithium or Aluminium
In an aluminum-air battery, electricity is generated when aluminum plates react with oxygen in the air. Aluminum-air batteries do have advantages over its lithium-ion counterpart in terms of price, range and safety. Aluminium-air also has one of the highest energy densities of all batteries.
But it has several drawbacks that have undermined its wide use in India. Chief among them are the high anode cost and byproduct removal when using traditional electrolytes.
Another major disadvantage of aluminium-air batteries is that they cannot be recharged like lithium-ion batteries.
A prerequisite of wide application of aluminium-air battery-based vehicles is availability of a large number of battery swapping stations, which is a constraint in the Indian context today.
Going forward, policy initiatives in favour of encouraging production of domestic lithium-ion batteries augurs well for India's interest. It will also thwart cheap dumping of batteries and parts by China and other countries to the detriment of the homegrown auto parts industry.
(The author is Founder, Lord's Mark Industries Pvt. Ltd.)
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