How Li-Ion cell manufacturing and dedicated freight corridors are going to be major growth drivers forelectric vehicles in India : Dr. Deb Mukherji Ph.D.
Transition from IC engine to electric vehicles is a movement. It's not only a mobility shift but a great opportunity for social engineering too. An industry like automobile has a large impact on the socio economic fabric of the society. On the supply side there is a large supply chain directly and indirectly engaged in the value chain of manufacturing. These range from small, medium to large suppliers supplying various parts, logistics supply chain of truckers, packaging, material handling, warehousing and last mile industry. On the users side there are large type of users from personal vehicles to commercial users. In the commercial segment there are many– fleet owners, aggregators, owner cum drivers etc. Along with these there are after sale, servicing, garages, mechanics etc. All form part of the large eco system of the automotive world. With the Electric vehicles coming in large numbers, we do see a clear disruption in all these partners lives in one way or the other. From users perspective we see many opportunities in adopting EVs.
There are enormous possibilities where an EV can play a major role in changing lives of the people. E.g. a 3 wheeler can be converted into a mobile shop. Street hawkers could be using them as their mobile shops, Manual load carts and rickshaws would be replaced by them andan EV can be used as a mobile school specially for children of construction and other migration workers. Agri and construction are two largest employers in the country and also two largest disorganized sectors. Education carts on brings schools to their door steps where as an electric cart in place of a manually hauled cart gives dignity to the driver.
Fig1: Demand and User side stakeholders in EV eco system
EV is thus a vehicle for social empowerment and making a difference in lives of millions. Remember how cell phone has made a difference to a very large section of society with a penetration of more than 80% today. For a very long time in Indiawe have been fed on socialist dose, with layers of control and inefficient bureaucratic systems (the lost decades). Fortunately now we have the political will to change all that. We see consistent Govt. policies and a sustained push towards a green automotive eco system. Govt. incentives like FAME2, low registration fee, state level incentives, vehicle scrappage policy etc. are major boost to the EV transition.
In any new industry changeover there is a typical life cycle observed. The innovators and early adopters are in the early stage of technology. Then come the early majority with their own developed technology fit for a particular market segment. Post this the market sees early majority players. This is the time when a few risk taking companies take the lead with their innovative products. In the context of Indian industry, we see the inflection point reaching now, around 5 years after we have seen the electrification drive started with low end Chinese 2 and 3 wheelers in the market. The industry scale up in next 3-5 years and we will have high technology and quality products from several OEMs.
Fig2: Life cycle of Electric vehicles industry
Lets analyse the role of two major enablers in this journey – the freight corridors and Li-Ion battery manufacturing.
We see the upcoming dedicated freight corridors will play a major role in electric vehicles transition from IC engines in India. The two corridors being finished in 2022 are: Eastern and Western dedicated freight corridors. Together with length of 3300 km, all over India, these two have the potential to change the freight movement landscape in India, cutting short the travel time by more than 50%. This would be a major game changer for the logistics sector with turnaround time and transportation costs coming down drastically. Also the freight corridors have been planned very scientifically. All along the fright highways, a large number of logistic hubs would be created. These warehouses will feed the materials to the cities on a daily basis. For example the hub near Rewari would feed the Delhi NCR. Lower costs of creating a warehouse out of major metro cities would significantly lower the capex as well as operating costs. The cities would be fed the materials from these warehouses during the day and night. Most of these metros like Delhi have No Entry for the ICE vehicles. This restricts movement of these vehicles during the day typically from 6 AM to 10 PM thus upsetting the supply chain. Also after 10 PM there are big movement of trucks clogging the city roads. Thus these freight corridors would encourage use of electric vehicles for these feeder routes. There would be a big requirement of mid mile vehicles which could run 200 km on an average on single charge. The trucks with payload of 2 -5 ton with a driving range of 200 Km one charge would be required. This will put pressure on the OEMs to come up with such vehicle technologies.
Fig3: Dedicated eastern and western freight corridor projects
Also on the manufacturing side we see a great push towards setting up manufacturing eco system. This consists of from cell to complete vehicle architecture manufacturing. The Li-Ion cells have been a major constraint in electrification in India. At present all cells are imported and assembled into battery packs. Once cell manufacturing starts in India, the industry will gain immensely in technology as well as cost.Govt. has already made plans towards this. As per Niti Aayog report (RMI EV Report 2020) Govt. has a very ambitious target to produce 175 GWH by 2022. This would certainly be achieved in phases. Govt. has already allocated an investment of Rs. 30,000 Cr.to create a capacity of 50GWh in phase1. (CSTEP report on indigenisation of Li-Ion batteries 2019). Another major change in the cell manufacturing supply chain is the changing technology. Globally the industry has been looking to move away from Co to Ni. Also Lithium sources are in limited countries and a huge cost of energy and efforts is required in mining. In order to make the cells cheaper and efficient there are new technologies coming up. Out of all of these Solid state Li-Ion cell technology is most promising where the liquid/gel electrolyte is replaced by a solid one. This improves the charge density, battery safety at the same time reduces cost. We see this would be the next big change in the battery industry. Solid state battery manufacturing in India is being planned from year 2022 onwards by an USA based company C4V batteries and these would be used in 2 and 3 wheelers by Omega Seiki P Ltd., a leading OEM in India.
To summarise we will see Indian EV landscape changing fast in the near future. On the supply side with the introduction of solid state batteries manufacturing we will see currentissues like low charge density, cost and high charging time being replaced by more than double charge density, charging under 30 min (for a typical 3-4 wheelers) and a lower cost. On the demand side we will have major highways like dedicated freight corridors, Eastern and Westernside being completed connecting major markets within India. These will encourage major logistics hubs around them within a radius of 100 Km from major cities which would be served by feeder services run on electric vehicles. Both these initiatives are huge enablers of the electric transition and important milestones on the India’s EV journey.