In contrast, India, the world’s fourth largest automaker, is taking an unconscionably long time to secure a foothold in the EV segment in spite of its close to 85 per cent import dependence on oil that impacts the country’s balance of payments and has the transportation sector accounting for 11 per cent of total carbon emissions. Many other leading automobile making countries enjoying government support are making rapid strides in building EV capacity.
Based on this, consulting group McKinsey says the world will see EV production rising to 4.5 million units in 2020, which will constitute around 5 per cent of the global light vehicle market. More than 3 million battery-powered EV and plug-in hybrid vehicles were on world roads in 2017, a 54 per cent jump on 2016.
Interestingly, New Delhi’s procrastinating on announcing an EV policy has not deterred Mahindra & Mahindra and Tata Motors from betting big on electric mobility. Convinced that the future of automobile is in EV, JSW Steel Chairman Sajjan Jindal has done considerable groundwork to make car making the next diversification for the group after power and cement.
He says cars have always “fascinated” him. He did look at China, which has moved into world leadership position in EV. But since he has come to the conclusion that it will not be easy to “sell” a Chinese car in India, Jindal has now decided to get the technology from either Germany or Austria.
Home-grown groups are going ahead with their EV programmes in full throttle even though India is yet to sound the death knell for internal combustion engine. A member of the Society of Indian Automobile Manufacturers (SIAM) says Indian groups have timed it right since globally EV is past the tipping point and it is no longer seen as a niche product fancied by a few. Their faith in an electric road mobility future ahead of the policy announcement is, therefore, hailed in all quarters. But their actual business success will largely depend on how quickly the lithium-ion batteries become more efficient, that is packing these with large quantities of juice for cars to run long distances on a single charge.
Equally importantly, a mass demand for EVs in India will have to await their prices dropping to petrol/diesel car levels or close to that. According to McKinsey, prices of lithium-ion packs for EVS have fallen by about 80 per cent since 2010.
Even now, batteries in particular make EVs too expensive for mass markets. The share of battery in the total cost of an EV, depending on its size should fall from over 40 per cent now to 19 per cent by 2030, according to the leading statistics portal Statista. The optimism ingrained in this statistic is based on evolving battery technology that is focussed on reducing the use of cobalt, which besides being in short supply and too expensive, has earned the moniker the “blood diamond of batteries.”
This is because around 66 per cent of the global supply of cobalt comes from the disturbed Democratic Republic of Congo (DRC), where the country’s constitutional court recently declared Felix Tshisekedi the next president though he polled only 19 per cent of the vote against 59 per cent by Martin Fayulu. Revenues from cobalt and also from nickel and copper from which the precious battery material is obtained as a by-product have funded armed clashes in DRC for decades. Human rights violations in DRC mines have caused such global infuriation that Tesla’s Elon Musk declared last year that “we use less than 3 per cent cobalt in our batteries and will use none in next gen.”
The SIAM member says that in the past six years Tesla has been able to bring down the average amount of cobalt used in its EV from 11 kg to 4.5 kg, the best in the industry. In the meantime, Panasonic, the world’s largest producer of lithium-ion battery cells and exclusive supplier to Tesla, has announced that it is in the process of developing cobalt-free EV batteries. It will be a few years before this becomes a reality. At the same time, automakers are hopeful that the inventor of lithium-ion battery, John Goodenough of the Texas University, will come up trumps in giving the world a cobalt free EV battery defying his advanced age of 96.