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Rolling out regulatory agenda for EVs in India challenging: EY

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New Delhi | Thursday, Jun 14 2018 IST
The deployment of EVs (electric vehicles) in India will require government to consider the holistic EV ecosystem while developing the regulatory agenda, in view of differential adoption pattern across cities, vehicle segments and application areas, a report by consulting firm Earnest and Young (EY) said.

The anticipated transition towards electric mobility necessitates attention and action by several sectors and stakeholders, the EY Report " Electrifying India: building blocks for a sustainable EV ecosystem" said.

The industry participants will need to develop and operationalise an EV strategy and consider "city as a customer" - to enable faster adoption of EV's, the report said. According to EY India Partner and Power and Utilities Sector Leader Somesh Kumar, "City-level deployment of electric mobility, including vehicles and related infrastructure, will assume high collaborative efforts between different local actors and this collaboration is the real business opportunity."According to the study, 2W (Two Wheeler) fleets and 3Ws (Three wheelers) will be the first to witness EV adoption followed by intra city buses, government fleets and corporate cabs. Two-wheeler and three-wheeler segments offer a huge opportunity for electrification in India given it is the world's largest 2W market as well as one of the biggest markets of 3Ws.

The primary reason for fleets being early adopters are the economics that EVs offer over combustion engine vehicles and that the fleet owners base their purchase criterion on the Total Cost of Ownership (TCO) and not just the acquisition cost of the vehicle.

EY Partner and India Automotive Sector Leader Rakesh Batra said, "In terms of vehicle segment and applications, shared vehicles and fleets will offer a better value proposition for all stakeholders - manufacturers, as higher volumes can help them achieve scale, and for fleet operators as the TCO of EVs is already competing with that of ICEVs."A blossoming EV market needs to be accompanied by adequate number of electric vehicle charging installations. India is already witnessing a divergence of business models for operators of charging infrastructure aimed at the users of public and private EVs. However, in order to achieve large-scale penetration of EVs, a facilitative investment climate is for the charging ecosystem is inevitable. The April 2018 ruling on the non-requirement of separate distribution license for setting up charging stations for electric vehicles provides a much awaited clarification to investors in charging infrastructure. This development is expected to create a level playing field as private players, manufacturers, DISCOMS can partner or compete to capture the EV charging infrastructure opportunity.

According to EY, the success of India's EV mission depends on the development and proliferation of the domestic manufacturing ecosystem. The absence of an EV supply chain in the country demands an urgent investment in domestic R&D and local manufacturing capabilities.

However, this transformational shift is expected to have significant implications for the existing supply chain as well, the report said. The existing suppliers will have to deal not only with the transition, but also face severe competition from new entrants in the industry such as technology companies, and battery producers.

In addition, the report also focuses on the role many new emerging technologies could play in making the entire EV experience more efficient and profitable.

Technologies such as telematics could play an important role in providing a boost to EVs by providing an anxiety-free EV ownership experience for drivers as well as smartly managing charge of the vehicle. The Indian market is witnessing proliferation of technology-driven mobility service providers, as the consumer is being drawn towards the idea of "access" from "ownership". The combination of these disruptive trends such as sharing economy, vehicle electrification and connected car are likely to transform the Indian automotive industry and present a new mobility experience, the report said.

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