The e-car tipping point

China is looking at significantly more ambitious targets for electric vehicles. It wants 25 per cent of cars sold in the country to be electric by 2025, according to a draft policy published by the Ministry of Industry and Information Technology last week. The current share is just about 5 per cent, though China is the largest electric vehicle market in the world.

The three barriers to wider adoption of electric vehicles — price, range (on single charge) and charging infrastructure — are being gradually whittled down, as battery prices keep sliding lower. Battery prices are down to $156 per kilowatt hour, according to BloombergNEF’s latest Battery Price Survey, from above $1,100 in 2010. The price is seen falling to around $100 per kilowatt hour by 2023 — the point at which electric vehicles will start to reach parity with internal combustion engine vehicles.

Meanwhile, exciting new electric models continue to be unveiled: Tesla showcased its electric pickup dubbed “cybertruck” last month. The $39,900 truck can be booked with a deposit of $100, though production is slated for 2021-22. 

Some car makers such as Toyota and Hyundai are embedding solar panels in the roof and body of the vehicle, adding  a few kilometers to the range of the solar car in what is being referred to as vehicle-integrated PV, or ViPV. 

In India, MG Motor, the British brand also known as Morris Garages that is now owned by China’s SAIC Motor, unveiled an electric sport-utility vehicle last week. The price has not yet been announced, though it was earlier indicated that it could be about Rs 2.5 million. One of the features of the car is a built-in air purifier. It will be competing with Hyundai’s Kona electric car model, launched earlier this year.

The tipping point price in India for an electric vehicle is likely to be below Rs 10 lakh or Rs 1 million, Rajeev Chaba, president of MG Motor India said in an interview to Business Standard. Tipping points are driven by technology and policy. Indian policymakers are, however, yet to finalise how aggressive, if at all, they want to be in this space. 

There are now seven million electric vehicles on the road globally. Sales this year are seen at 2.2 million, with China accounting for over half of the market. Digital ride hailing companies like Uber and Ola are increasing the share of electric vehicles in their fleets, and there are hundreds of models of electric vehicles set to be in the market soon. Electric vehicle charging infrastructure is expanding. Seeing the shift to electric, companies are signing long-term contracts to secure battery supply — BMW has placed $11 billion worth of orders with Contemporary Amperex Technologies Co and with Samsung SDI, to secure battery supply for its electric vehicles out to 2031.

As many as 43 governments have announced plans to phase out combustion vehicle sales. India did too, only to backtrack and opt for a more gradual transition to electric mobility, with support tilting towards public transport vehicles, and charging infrastructure.

The author is editor, global policy, BloombergNEF;

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