Transition to ‘Sustainable Mobility’ is inevitable and already underway globally and in India – across both passenger and commercial segments. While there can be multiple transportation modes that can be considered sustainable, electrification is the big theme for the decade.
Electrification is already at an inflexion point in India across different sub-segments. However, for the electric revolution in India to be sustainable, it has to be accessible to as many Indians as possible. The focus has to be on the mass mobility segment to begin with. And we are already seeing early positive signs. The 3W penetration in India increased from 2-3% in F21, to 9% YTD in F22. 3W penetration will hit ~35% by 2025, and as high as 65-70% by 2030, while 4W penetration is expected to be ~15% by 2030. Electrification of heavy commercial vehicles including buses may however take some more time, primarily driven by procurement by Government bodies.
With electrification, it is expected that the vehicular emissions will come down significantly. As per a white paper on ‘global comparison of the life-cycle greenhouse gas emissions of combustion engine and electric passenger cars’ by the International Council on Clean Transportation, the average lifecycle emissions for an average electric vehicle (EV) are expected to be at 25T CO2 eq., much lower to a gasoline car in India at ~35T CO2 eq. However, as India’s power grid becomes greener, in lines with commitments made at the COP26 (50% renewable energy), we expect the emissions per vehicle for an electric car to go further down to 19-20T CO2 eq. Emissions per EV will be much lower at ~7T CO2 eq. on a 100% renewable electricity powered grid. At Mahindra, our EVs have so far cumulatively covered more than 400 million kms, saving more than 40,000 metric tonnes of CO2 emissions.
Given the lifecycle emissions of vehicles, it becomes imperative that we start by designing vehicles that allow higher recycling of material and in parallel also encourage scientific methods for battery recycling and disposal in the organized sector. Only then can we truly claim that we are entering into an era of sustainable transportation. The introduction of vehicle scrappage policy in India by the Government of India is a great initiative and a step in the right direction. Similarly, disposal and recycling of the enormous amount of battery that will be generated from powering the millions of electric vehicles on the roads will also need to be addressed. A comprehensive battery disposal and recycling policy will further aid the recycling industry. Broadly, scientific methods for battery recycling allow as high as ~90% material recovery.
A holistic battery reuse and recycling policy will have numerous benefits across multiple spheres – economic, environmental, and even social. Economic benefits include setting up battery recycling units, which would generate income and profits. It further reduces supply security risks for metals such as Lithium (Li) especially given 97% of Li supplies is currently controlled by one country – China. Lastly, these efforts are also expected to bring down cost of EVs. Environmental benefits due to material circularity with the re-use of useful materials and metals can be quite significant. For instance, by ‘greener’ re-extraction of metals via recycling, we reduce use of traditional Li mining, which is a water-guzzling process that requires as high as 2000 litres of water for 1 kg of Li mining. Social benefits include job creation and employment shift from unorganized to the organized sector.
Total cost of ownership (TCO) will also be an important factor driving EV penetration in India. At present, Government incentives for EVs such as no GST, tax exemptions on EV financing and state specific incentives to reduce acquisition cost and zero road tax are boosting the EV TCO. Existing FAME II and upcoming Production Linked Incentive (PLI) program will further bolster the TCO benefits. Global battery prices, which were greater than US $1,000/ KWh in 2010 have declined to US $135/KWh and are further expected to reduce in future. Lower maintenance of EVs will further benefit customers and make EVs an attractive proposition.
While TCO will be imperative for customer adoption, evolution of the charging infrastructure will be equally important to allay range anxiety in customers. Easy access to charging stations whether at home or at office, at malls or highways will be critical. Installation of DC fast chargers will be crucial in providing a good customer experience.
The future of mobility has to be sustainable and besides the obvious benefits for the planet, also offers excellent business and growth opportunities. It is up to all of us including the Government, corporates, and consumers to come together to create the right ecosystem to adopt, nurture and accelerate this revolution.