How shared mobility may encourage electric vehicle adoption

Given the high fuel costs for taxis and other vehicles, batteries typically offer drivers long-term savings compared to imported fossil fuels petrol or diesel. Plus, there are the environmental benefits of going electric. Although electric vehicles (EVs) are still pricey with fewer options available, that is changing. Startups and mobility companies are heavily investing in the field.

One idea that seems to be gaining traction is shared mobility, whereby users swap and share transportation, accessing it on an as-needed basis.

Anand Shah, the co-founder of Ola Electric and senior VP with Ola, is co-creating infrastructure that effectively meets transportation demands. His team has launched several pilot projects with different brands of electric vehicles and charging solutions. The goal is to work with automobile OEMs to ease EV costs and operations for drivers.

One of the models Shah and his team are testing is battery swapping, which lets OEMs supply vehicles without an expensive battery designed to last the vehicle’s lifetime. Instead, drivers quickly replace a discharged battery with a new, fully-charged one, typically at a “swapping station.” According to Shah, it solves the cost and convenience problem for drivers operating EVs. Swapping eliminates charging wait times and the vehicles would use smaller batteries.

Currently, the pilot projects are running in various cities, but with two and three-wheelers. The goal is to start small and then gain a better understanding of how to scale successfully to regularly sized vehicles.

However, costs are not the only factor to consider with batteries. Performance is typically linked to weather and environmental conditions, for example. Also, each battery has a different life span depending on its chemistry, conditions, and the number of times it’s charged. Battery chemistry, loading speed, density, and the availability of charging points are key factors to consider if EVs are ever going to outnumber conventional vehicles on the road.

As OEMs launch new electric vehicles, however, they will become less costly and more effective. Shah’s mission is to also release 10,000 new electric vehicles on the road by 2022 as a push for cleaner transportation.

Imports & incentives
The Indian government anticipates the demand for electronic products to reach USD 400 billion between 2023 and 2024. This could lead to a valuable foreign exchange outflow in the country, which may widen the trade deficit with other countries. The government is, therefore, incentivizing local electronics manufacturing in hopes of reducing import costs.

The Ministry of Electronics and IT has published a draft electronics policy, which aims to create a USD 400 billion turnover in the electronics manufacturing environment by 2025. However, the strategy is strongly based on the success of mobile phones and related components. Case-in-point: the policy aims to double the target of cellular phone manufacturing from 500 million units in 2019 to one billion by 2025.

Many believe there should be recommendations and benefits for other electronics manufacturing sectors, too — and there is hope. For example, the draft policy includes direct tax benefits for manufacturers establishing new facilities or renovating existing ones.

The administration also intends to promote a forward-looking tax rule, which includes investments in different segments of electronics with a sunset clause. Plus, it’s considering increasing income tax benefits on investments relating to R&D in the electronics sector.

Additionally, in 2012, the Indian government approved a special incentive package that promotes large-scale manufacturing in the electronic system design and manufacturing (ESDM) sector. Under this modified special incentive package scheme or M-SIPS, a subsidy of 20 percent is provided to companies on capital investments in special economic zones (SEZs) and 25 percent on capital investments in non-SEZs.

M-SIPS has helped incentivize local manufacturing for products, such as TVs, mobile handsets, and LED products (such as light bulbs), which had previously been too costly to produce in India. The exclusion of duty and other incentives has made it much easier for international companies to set up operations in India.

The government also plans to incentivize component suppliers through investment-linked deductions and subsidies. The goal is to make India an export center for electronics goods — which means all local manufacturing will likely benefit for the next few years, and this is good for EV OEMs.