SWOT Analysis of EV adoption in India

Prepared by: Abhishek Sharma

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Executive Summary
Transport sector greenhouse gas emissions are projected to increase
significantly in Asia and the Pacific’s developing countries in coming
decades, alongside increasing climate and disaster impacts. As India is
world’s third largest CO2 emitter the responsibility to make good on all
commitments on Global events like COP26 and Paris agreement is huge.
Aggressive and sustained action is needed to ensure that transport
systems provide the means for a resilient and low-carbon future. One of
the most promising solutions is Electric vehicles, but like any new
technology they come with their own risks and rewards.

A primary cause of climate change is increasing concentrations of

greenhouse gas emissions in the atmosphere, with CO2 emissions
accounting for around 76% of total emissions. In 2019 the global
transport sector contributed to 24% of direct CO2 emissions from fuel
combustion, with road transport accounting for 75%. Despite increased
momentum in the discontinuation of conventional vehicles, rising
efficiency, and growth in electric vehicles, transport emissions are
projected to double by 2050.

India is charged to become a global hotspot for electric mobility. Over the
past few years, the national government has created momentum through
several policies that encourage the adoption of electric mobility. Following
suit, 10 states and union territories (UT) have published draft electric
vehicle (EV) policies or notified final policies detailing fiscal, non-fiscal and
other incentives to accelerate a value chain of electric mobility activities.
Manufacturers have joined in by launching diversified products in various
categories: rickshaws, two-wheelers (2Ws), three-wheelers (3Ws),
passenger vehicles, buses and power trains. Start-ups are developing
viable products for battery technologies, charging infrastructure and
more. Despite these developments, the uptake of electric vehicles has
been slow due to the high upfront cost and range anxiety. Given the
nascent
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adoption, diffusion and deployment of electric mobility.
 • Zero tailpipe emissions • Batteries are very heavy
• Battery Efficiency • High Up front/Acquisition Cost
• Battery requires rare metals
• Passenger Safety
• Slow charging
• Little to no maintenance • Fire hazards with battery
• Safe from fuel price fluctuations • Shorter Range on each charge
• Charge them at home/office • Low Consumer awareness
• Lower total cost of ownership
• Ease of Driving
• No noise pollution
• Batteries for energy storage

STRENGTHS WEAKNESSES
SWOT
Analysis
OPPORTUNITIES THREATS

• Fastest growing automobile market • Lack of Charging Infrastructure

• Plans to reduce EV prices
• Power sourcing, supply and losses
• Policies like FAME I, II, Battery
swapping, vehicle scrapping etc. • High temperatures, risk of fire
• Cheapest Solar power • Innovation in hydrogen/biofuels
• Strong Interest from Industry leaders • Low penetration of EVs
like Tatas and Mahindra • Dependence for rare metals
• Subsidies for EVs on loans and GST • Lack of indigenous technology
• Unemployment of workforce
• Lack of funding ecosystem
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 STRENGTHS

The lifecycle of non renewable fuel starts

from the wells and ultimately reaches the
wheel of vehicles. During this journey,
EV is far more energy efficient than ICE
various factors control efficiency of fuel
utilization. The Battery Electric Vehicle
far outperforms the Internal Combustion
Engine (ICE) in terms of Tank to wheel
and even the well to wheel comparison.

The tank to wheel efficiency of BEV is

calculated by amount of fuel consumed,
compared with the power generated. Battery Electric Vehicle
There are very high energy losses in the
ICE vehicles which increase the fuel
demand. The electric motor on the other Refinery
hand has negligible losses and converts
all the electricity into power.

Internal Electric Comparison

Combustion Motor
Engine

1-3 kW/kg 3-10 kW/kg 3x more

powerful
0.4 kW/L 13.6 kW/L 40x smaller Refinery Transportation Gas Pumps Gasoline Vehicle

5-30% 93-96% 3-20x more

efficient efficient efficient

Many moving One moving Maintenance

parts part free

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 STRENGTHS

Battery electric vehicles are one of the most

effective levers available to policymakers to
reduce local emissions from road transport,
EV adoption crucial for
in particular CO2. As a result, many
countries are beginning to mandate future
sustainable mobility
targets when all light vehicle sales must be
electrified.
In Europe, manufacturers face fines if the
average CO2 emissions of their vehicle pool
exceed 95g/km, adjusted for vehicle weight.
For 2020, OEM pools avoided fines thanks to
higher-than-expected EV sales driven by
more market choice and incentive schemes,
along with phase-in credits that applied only
in 2020 worth 3g/km for each pool. These
credits did not apply in 2021 and, with some
EV incentive schemes ending, means OEMs
may find they have failed to meet 2021’s
pool CO2 targets, incurring fines.
With EV targets in place and future bans for
combustion engines on the horizon, there is
a refocusing of attention on EV lifecycle
sustainability. Combustion vehicles mainly
produce emissions during their ‘use’ phase as
they burn fossil fuels. EVs generate almost
no direct emissions in use, with the overall
use figure determined by how much
renewable energy is used when charging.

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 STRENGTHS

Tesla created a huge demand for EVs by

designing premium looking cars with very
high performance. Beating the age old
EVs are popular with GenZ for
stereotypes and making EVs ‘sexy’. While
Tesla currently enjoys the lion’s share of
user experience and style
the market, it is estimated that the
competition will become fierce soon.
From the competition, customers will get
wide variety to choose from.
EVs have excellent initial acceleration,
giving drivers the experience similar to
driving a high end sports car. On
application of brakes, Electric vehicles
have a provision of charging the battery
from the energy created in brake pads.
EVs are safer in event of collisions, as
the battery adds stability to the vehicle.

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 STRENGTHS

The total cost of ownership includes

vehicle purchase costs, running costs,
fuel, insurance, and other maintenance
Negligible maintenance and low total
and service costs. The TCO depends on
the size segment of the car and the
ownership cost
powertrain types.

Comparing the long life of EV batteries,

and negligible maintenance the total cost
of ownership for an EV is very low. Like
businesses, customers will soon start
evaluating their decisions against the
triple bottom line, which means instead
of focussing only on monetary value we
should also consider the impact our
decision will have on the planet and
people.
Component ICE vehicle BEV
(% of cost) (% of cost)

Basic Engine/ 30 20
motor
Transmission 25 5

Control/ 20 -
injection

Auxiliaries/ 10 5
Power
Electronics

Exhaust/ 15 70
BEV Battery

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 WEAKNESSES

With years of Research and development,

Heavy batteries pose significant
design and range challenges
batteries have come a long way in terms
of weight and efficiency, but still there is
scope of improvement. Close to 7,000 Li-
ion batteries are packed together and
placed at the base of vehicle. This
additional load increases the total power
requirement and ideally is one of the
most critical factor for the design of the
vehicle.

Energy Year Weight Equals

source needed
for 500
km (kg)
Lead-acid 1900 10,000 Elephant
Lead-acid 2000 3,000 Rhinoceros
NiMH 2000 800 Bison
Lithium 2015 400 Gorilla
Lithium 2025? 200 Pig

The range which a vehicle can reach in a

single charge is one of the most
important details, the customer checks
before deciding which model to buy.

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EV Battery Cost to Planet and People
is higher than the price tag
Battery Metal Demand Projections
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WEAKNESSES
Battery is the most important part of any
vehicle and for EVs, amount to 50% of
the total cost. But there are
environmental and social costs which are
often hidden from consideration. Lithium-
ion batteries require rare metals like
lithium and cobalt. The Global supply
chain of Cobalt is dependent on Congo
(home to largest reserves) and many
native children have become part of the
unorganized extraction sector. The
process of digging pits and extracting the
ore causes major health complications
and in some cases death. Therefore the
term, ‘Blood-batteries’.
Key metals:
• Lithium: largest bottleneck. Supply deficit
will limit BEV production. Hydroxide demand
to marginally overtake carbonate in long
term
• Nickel: threat of prolonged high prices are
driving further development of LFP and high-
Mn chemistries, but some OEMs more ready
than others
• Cobalt: prices have always been a concern,
but Co being thrifted and peak usage after
2026
• Manganese: colossal growth in demand,
especially if high-Mn chemistries are
commercialised
• Graphite: supply deficit in short term;
driving development of high-silicon anodes 9

Safety of EVs is a serious question;
multiple scooters caught fire in India
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WEAKNESSES
EVs were in news for all the wrong
reasons recently, after multiple e-
scooters caught fire. This brought
attention of Government and regulatory
authorities to the safety parameters of
Lithium Ion batteries. The Defence
Research & Development Organisation
(DRDO) that was tasked with
investigating into EV fire incidents by the
Union Road Transport and Highways
Ministry, has found serious defects in the
batteries, including designs of the battery
packs and modules.
Lithium is fragile to high temperatures
and with 7,000 cells connected, a small
deformity in one can trigger a chain
reaction. While the components are
simple, the workforce in assembly lines
are still on initial stages of the learning
curve and require more experience. More
importantly the testing standards should
be stringent and mandatory.
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 OPPORTUNITIES

The process of urbanization in America

was driven by cars which, is evident from
the fact that there are 900 cars for 1000
India is one of the most
people and similarly in Europe where the
number of cars is close to 800. India has
attractive markets for EVs
a major opportunity as there are
currently just 26 cars for 1000 people,
which makes transition to new Total GHG
technologies like EV, smoother and Freight Roads Railways Ships/Marine Aviation
emissions in
sustainable.
India
Niti Aayog is confident that electrification
of public transport (busses, trams, trains
etc.) is where largest impact will be
observed and the commitment is clear
from the world’s largest tender which Passengers
was floated from India for 5,585 electric
buses.
The vision of India for 2025 is to reduce
or stop, sale of ICE 2 wheelers and 3
wheelers. This goal might seem
ambitious but is not far from reality, on
closer observation of trends of EV
adoption with that customer segment.
The 2 wheeler Manufacturers of India are
making a strategic pivot towards EV and
investing heavily. New players like Ola
electric have also made bold
commitments like manufacturing 2 Low High
Million scooters annually.
Expected EV penetration
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 OPPORTUNITIES

Indian Government has launched

,multiple policies for catalysing the EV
adoption in India.
Favourable Policies of Indian Government
FAME 1, 2: Faster Adoption and
Manufacturing of (Strong) Hybrid and
Electric Vehicles in India; laid a strong
foundation for the EV manufacturing
ecosystem in India, budget increased tp
INR 10,000 CR. Target for EV sales
penetration of 30% of private cars, 70%
of commercial cars, 40% of buses and
80% of two and three-wheelers by 2030
Battery swapping: The plan is to create
a reliable and standardised battery
swapping ecosystem which will be used
for 2 and 3 wheelers which will benefit.
Government is also preparing a policy
about shared ownership of E vehicles
which will drastically reduce the upfront
cost.
Charging Stations: Charging stations
do not need a separate licence under the
Electricity Act of 2003 as of April’18
Production Linked Incentive Scheme:
Under the scheme, the government
seeks to boost local manufacturing of
advanced chemistry cell to bring down
prices of battery in the country, which
will reduce the cost of electric vehicles as
well. Li-ion production plants expansion
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 OPPORTUNITIES

India spent more than $20 billion on its

grid last year, and the Central Electricity
Authority estimated an extra $40 billion
Green Grids are possible with
of transmission spending – the cost of
getting electricity from the power plant
reducing price of Solar power in India
to the substation – would be needed in
the next three years. That’s over half as
much again as it is currently spending.
Prime Minister Narendra Modi announced
massive solar energy investments in
2015, pledging to surpass targets in the
Paris climate agreement. Plans are
underway to fuel EVs with clean power,
with industry players exploring solar-
plus-EV technology in Mumbai and
beyond. India's solar energy investments
are now outpacing those in fossil fuels,
but ‘greening of the grids’ will take its
own time.

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 OPPORTUNITIES

India imports close to 85% of total crude

oil demand, which exposes them to oil
market fluctuations and dependence
Aatmanirbhar Bharat:
towards OPEC. The country's import
dependence has increased owing to a
reducing India’s dependence on others
steady decline in domestic crude
production. With Electric Vehicles, the
imports to crude oil will reduce drastically
and India can invest in cleaner
alternatives.

Khanish bidesh india limited (KABIL) is

a Joint Venture of:
• National Aluminium Company
Ltd.(NALCO)
• Hindustan Copper Ltd.(HCL)
• Mineral Exploration Company Ltd.
(MECL)

It is mandated for Locating reserves of

strategic minerals in India and overseas.
Partnerships are being made with
Indonesia (home to reserves of Nickel).
Trade partnerships with Australia and
Lithium triangle in South America (Chile,
Bolivia and Argentina) could strengthen
India’s supply chain resilience for
Lithium.
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 OPPORTUNITIES

Lithium Ion Batteries have gone through

years of research, driven primarily by
mobile phone manufacturers who wanted
Innovations in Battery Charging
their products to be lighter. Looking at
the developments in battery research,
the electric car will soon be lighter than
the ICE car and battery prices are also
swiftly plummeting (from $1100 to $137
per KWh). Experts believe once the
battery price drops below $100 per KWh,
EVs will become cheaper than ICE
vehicles.
One of the biggest complaints which EV
owners have is the amount of time they Battery Swapping
have to wait for their EV to get charged.
Soon, that will no longer be a problem,
thanks to the innovations in Battery
charging. The appetite for Indian
Government for risk and innovation will
prove to be a catalyst, with
announcements of projects like Electric
Highways between important cities.
Policy for Battery swapping is another
good example for supporting innovations.
Battery Swapping: faster than ICE
refuelling (tested by Tesla)
Inductive Charging: induction coils can
charge batteries without being plugged in
Fast Chargers: time spent in charging
will significantly reduce if current is Inductive Charging
provided at higher rate.
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India is dependent on other countries
for rare metals and technology
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THREATS
Majority of the world’s lithium supplies
are owned by China. This gives the
country a significant competitive
advantage among lithium-ion battery
developers as it has the most direct
access to materials. Cobalt is extracted
during the copper and nickel mining
process and concerns have been raised
over the use of child labour in the
Democratic Republic of the Congo to
extract it. China controls 50% production
and 80% refining of Cobalt in Congo.
Modern vehicles are as reliant on
computer chips as they are on their
powertrains and chassis. The position the
chip shortage has placed the automotive
sector in should lead many to conduct a
thorough audit of supply chains and
identifying areas of little control or
transparency where a building of buffer
stocks would be most prudent.
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 THREATS

Majority of India’s power generation is

60% of India’s power dependent on coal, which means the
emissions are redirected from exhaust
is sourced from Polluting fuels like Coal pipes of EVs to the chimneys of thermal
power plants. As long as India does not
source a significant portion of power
Sources of power for India from renewable sources, the total GHG
Nuclear emissions will not be reduced.
2%
India has serious power supply
Hydro challenges, which was evident from the
12% power cuts across India in summers of
2022. While we had sufficient coal
supplies, the real challenge was in poor
Renewable Thermal demand forecasting of Power Distribution
27% (Coal)
59%
Companies and coal logistics problems
(Rakes from Indian Railways). Some
power plants which are dependent on
imported coal, were hit by the global
supply chain shock caused by Russia and
Ukraine war.
To harness the country’s largely
untapped potential for energy efficiency,
the government launched National
Mission for Enhanced Energy Efficiency,
one of the eight missions on India’s
climate action, in 2010. A public service
company, Energy Efficiency Services
Limited (EESL), a JV of 4 PSUs of
ministry of power, was created in 2009 to
lead the mission and pursue large scale
energy efficiency focused investments.
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Vision of Aatmanirbhar Bharat and
missing Ministry/Department for EV
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THREATS
Tesla is a good example of how national
policies can hurt aspirations
international OEMs. Tesla has been in
of
discussion with GoI for quite some time
now but have not been able to crack a
deal. In a nutshell the disagreements lie
in the business model of Tesla which
includes outsourcing manufacturing to
China and India’s strong resistance
towards imports from competing
countries. Union Minister Mahendra Nath
Pandey recently reiterated that Tesla is
welcome, but Government will not
compromise on vision of Aatmanirbhar
Bharat. 100% import tax is currently
levied on Import of Tesla and other
international OEM manufacturers, which
makes them uneconomical.
Few countries in the world oversee
transport systems in as fragmented a
manner as India. Even at the national
level, five different ministries are
responsible for transport sector policy
making — the Ministry of Road Transport
and Highways, the Ministry of Railways,
the Ministry of Shipping, the Ministry of
Civil Aviation and the Ministry of Housing
and Urban Affairs. For EV to be
successful one department should ideally
be focussing all energies and resources
towards the goal of EV adoption in India.
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 THREATS

In addition to EVs, India is also aiming to

Hydrogen, Biofuel and other competing fuel become the Hydrogen hub for the world.
Hydrogen fuel cell vehicles pose a serious
technologies for vehicles challenge for EVs as they are competing
across all segments of passenger
vehicles. Hydrogen fuel cell will take 4
times less space than the Electric vehicle
and would be more suitable for heavier
payloads like taxis, trucks and busses for
Suitable for Hydrogen longer travel. Indian Minister for
10,000
Transport Mr. Nitin Gadkari made a bold
statement by arriving to the parliament
Suitable for EV in a Hydrogen powered car.
1000
Biofuels like ethanol and methanol are
also being considered as alternative fuels
for the future. India has set an ambitious
Weight/Tons

100
target for increasing ethanol blending to
20%. This announcement was met with
mixed reviews and questions were raised
10 about the ‘Food V/s Fuel’ conundrum.
Maruti, one of the biggest automobile
manufacturers in India has not shown
1
much interest in electric vehicles, unlike
Tatas who invested bullishly. Maruti
Suzuki is confident in success of CNG for
0.1
Indian market. There are good use cases
of LPG, biogas, methanol, propane etc. in
10 100 1000+ other countries which Indian policy
makers are exploring.
Average Mileage per day/trip/km

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 Conclusion
• Electric Vehicles have several strengths including but not limited to the
positive impact which they have on the environment because of zero
tailpipe emissions.
• The weaknesses of Electric vehicles are included in mission statements
of many startups who are actively working towards making the
technology more accessible and efficient.
• The strengths outweigh the weaknesses of EVs, which is why most
countries are actively researching and investing their precious resources
in maximizing the scale of implementation.
• With research and development most of the challenges faced with EVs
today, will become a thing of past.
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• With the support of government and industry, India can realize
a shared, electric and connected mobility system.
• When FAME I was first announced in 2015, this future seemed to be
a futuristic goal.
• Now, with the launch of multiple policies that provide fiscal and non-
fiscal incentives, the vision of a transformed mobility system for India
appears within reach.
• This transformation will potentially benefit the country by improving
air quality, reducing oil imports, and creating jobs among other
benefits.
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Sources
• MOOCs like TU Delft courses on Electric Vehicles (technology, business and policy)

• IIT Roorkee Sustainable Transportation systems course

• World Energy Outlook 2020

• IBEF reports (Power sector, automobile manufacturing etc.)

• WEF, WRI, GIZ, ADB, World Bank, Mckinsey Global Institute articles and reports

• Multiple reports and articles from Economic Times, Business Standard and other newspaper/business magazines

• Levelized Cost of Energy and Levelized Cost of Storage 2019

• Niti Aayog Reports (Integration of electric vehicles charging infrastructure with distribution grid: global review,

india’s gap analyses and way forward)

• PIB
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reports and articles 21