Future of Mobility in India

Future of Mobility in India

India’s transport system is undergoing rapid transformation due to rapidly reducing technology costs and increased connectivity. However, the adoption of electric vehicles in India has been slow; mainly due to price, selection range, ease of charging and customer awareness. With the aim of addressing these challenges, the government is focusing on developing infrastructure in urban and rural areas. One such initiative is the “Smart Cities” initiative. Under this, the government has allocated funds to the tune of US$7.5 billion to be provided to 100 selected smart cities. This indeed has provided an opportunity to promote various technological interventions in the field. There are 4 key technology trends that are driving the change: electrification, connectivity, autonomous driving and shared mobility. Nitin Gadkari the Union Minister of Road Transport stated that the passenger vehicle sector, electric and connected mobility could help save US$300 bn (INR 20 Lakh Cr) in oil imports and nearly 1 gigatonne of CO2 emission by 2030.

The trends the industry is experiencing could impact the automotive companies in different ways; from overlaps of value chain to a few components being made obsolete. For example, parts that gasoline vehicles use may no longer be the core value component for electric vehicles i.e. engine and transmission. Parts like e-motors and battery services will take over and become more relevant.

With the urban population nearly doubling in the next decade to approximately 600 million and almost 500 million trips per day by 2030, there is a need for policy support by government. It is forecasted that by 2027, four wheel EV sales will exceed the sales of Internal Combustion Engine (ICE) vehicles. For this to happen, Karnataka is all set to procure and ply 40 electric buses, 100 four wheelers, 500 three wheelers and charging infrastructure across the city of Bengaluru. Moreover, through the FAME II scheme, government eyes 100% electric public transport and promote e-mobility. Through Expression of Interest (EoI), department of Heavy Industry has selected 11 cities out of 47 proposals from 44 cities. Once the tendering process is finalized by these 11 cities, Department of Heavy Industry is expected to spend about Rs. 437 crore under the FAME India (Phase I) scheme which includes, Rs. 40 crore as incentives for installation of charging infrastructure.

Several MNC’s have already taken steps in supporting the government’s e-mobility vision. Uber has partnered with Mahindra for electric vehicles, Suzuki and Toyota have partnered to roll out electric vehicles, Toyota has also partnered with Panasonic to create electric vehicle batteries. In addition, these companies have also shown interest in autonomous driving technology. This is the ideal time for any automotive MNC’s to exploit their strengths by joint ventures and/or greenfield investment in India.

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