Electric Vehicles: Spotting the Challenges and Charting the Course
India aims to be at the forefront of EV adoption in the forthcoming years. The government aims to electrify 70% of commercial cars, 30% of private cars, 40% of buses, and 80% of two-wheelers and three-wheelers sales by 2030.
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CLICK HERE to read "Electric Vehicles: Spotting the Challenges & Charting the Course," a knowledge report by Alvarez & Marsal in collaboration with Blue Circle. |
Today we witness a significant push in the country to not just drive adoption and also become a world leader in production as we scale up our manufacturing facilities and localise supply chains. This presents a huge opportunity for the industry to support the nation’s drive to become an automobile hub.
However, the industry witnesses its own set of unique challenges that need to be addressed on priority. We are in the middle of critical supply chain-induced shortages, especially with the limited availability of key components such as lithium-ion battery cells and semiconductor chips in recent times. The industry is grappling with poor charging infrastructure, limited financing options and low product availability for consumers which aggravates the challenges further. Affordability needs to be understood in terms of the total cost of ownership (TCO) and not just upfront cost, which is another key bottleneck to adoption.
India has traditionally been very strong in automotive, mobility and technology, and EVs lie at the intersection of all three. Supply shortages on account of battery cells have been 20-25% and semiconductor chips have been a whopping 40%-50%, causing production halts for market leaders in the space. Moving forward, as India embraces EVs, firms will need to make sure that supply matches the demand. Globally, additional investments and assembly lines planned to become operational over the next 2-3 years should shorten the gap. Meanwhile, companies can focus on proprietary solutions instead of relying on licensed technology to build scale. Increasing interest from local and global investors will surely give much needed support to this industry.
We have done over 50 discussions and extensive consultations with a wide variety of industry participants for this white paper. Consequently, we discuss the challenges and solutions that each stakeholder needs to adopt to put India in the league of nations leading the transition to electric vehicles.
