There is no four-wheeled Indian electric car, why does it dare to reject Tesla?
In India, electric mopeds and three-wheeled taxis cost as little as $1,000 (about 6,900 yuan) for speeding down crowded city roads. Such vehicles are supported by environmentalists and the government. The smog in India is severe and unbearable. They see it as a way to get rid of some of the haze. At the same time, India’s success in the development of low-cost electric vehicles also provides a template for developing countries: In the absence of expensive electric vehicles, they can also ditch the internal combustion engine to fight climate change.
Take Kuldeep Singh, who drives a sky-blue Piaggio-branded electric three-wheeled taxi. Twice a day, he goes to swap stations near New Delhi to replace depleted lithium-ion batteries with fully charged ones.
Singh drives an electric three-wheeled taxi
“The best part is that there is no pollution,” Singh said. He paid about half as much for a new battery as to fill up a conventional tricycle. “I’m proud of it, India will be stronger.”
Electric vehicles account for less than 5%
Indian automakers sold 430,000 electric vehicles in the 12 months to March, more than triple the number in the same period last year. Industry data show that most of them are two-wheeled and three-wheeled vehicles, and the number of electric vehicles is only 18,000, accounting for only 4%. By comparison, Americans bought about 487,000 new electric vehicles in 2021, a 90% increase from 2020, according to the Kelley Blue Book, an automotive research group.
“The Modi government’s ‘Make in India’ strategy has not been successful, exacerbating India’s dependence on imports, especially on China,” said R. Nagaraj, visiting professor at the Kerala Development Research Center in southern India. Nagaraj), “The slogan inspires the country well, but you can’t just stop there.”
India’s attitude towards electric vehicles appears to reflect the lessons learned from these missteps. Instead of offering small subsidies to dozens of industries as before, the government is directing funds to a few key areas to help Indian companies build an electric vehicle ecosystem.
Modi also appears to have given up on trying to get Tesla to build a factory in India. Tesla CEO Elon Musk has said he will build a factory in India only if India lowers tariffs on imported cars, so he can first build a market for Tesla by importing cars from Shanghai .
However, the Indian government has also taken a tough stance, rejecting Tesla’s request for a tax cut. India’s Minister of Highways and Transport Gadkari said that if Tesla wants to enter the Indian market, it cannot sell Teslas made in China. In addition, he also emphasized that Tesla should be manufactured locally in India, not only for the Indian market, but also for sales to other markets around the world.
Musk and Indian Prime Minister Narendra Modi
Analysts said Modi would be wise to stop pursuing Tesla. Tesla’s cheapest car costs around $40,000, but most cars in India are priced under $10,000.
Auto industry executives say the country is lagging behind in EV adoption because batteries are too expensive. “The economy is not going to work,” said R.C. Bhargava, chairman of Maruti Suzuki, India’s largest automaker.
Core Competitiveness: Cheap
About 15 years ago, Indian artisans and small businesses began importing electric motors and lead-acid batteries from China to assemble cheap electric vehicles. With little regulation, such electric vehicles have become popular, creating safety and other problems. But they also create room for startups and established automakers looking to build more durable products.
Now, the Indian government and the auto industry are betting heavily on low-priced electric vehicles. Competition and subsidies have made electric mopeds and three-wheeled taxis as cheap as, or even cheaper than, ICE models. For just a few hundred dollars, some startups can convert internal combustion engine models to battery-powered. At the same time, the recent surge in oil and gas prices has made the use of combustion engine models significantly more expensive.
“There are many parts of the world that don’t buy a $60,000 car,” said Bhavish Aggarwal, 37, founder and chairman of Ola Electric, an Indian electric two-wheeler maker in southern Thailand. A factory in Milnadu that makes electric mopeds, “There’s a big difference in the technology used in hotter, dustier climates or more bumpy roads. India is like a very good one in the rest of the world. Microcosm. If we can develop this model here, it will be a good reference for other regions as well.”
Indian female worker making electric car
For India, starting with small cars makes economic and environmental sense. Two- and three-wheelers use most of the country’s transportation fuel, and car ownership is incredibly low: India has just 22 cars per 1,000 people, compared with 980 cars per 1,000 people in the US.
China is the leader in small electric vehicles. The Wuling Hongguang Mini sold by a joint venture of General Motors, SAIC and Wuling is priced at $4,500. With a top speed of about 60 miles per hour (97 kilometers per hour) and a range of 100 miles (161 kilometers), it’s perfect for city driving.
For taxi drivers like Singh, the main appeal of electric cars is the extra gas savings they can bring home with them.
“It provides a livelihood for our customers,” said Suman Mishra, CEO of Mahindra Electric, maker of electric tricycles and other electric vehicles. “So, it has a huge social impact. “
Electric vehicles are a livelihood for many
Manufacturers say their biggest problem is keeping up with demand. Ola built the factory in a large field of palm trees in Pochampalli, a town near Bengaluru. The factory employs about 2,000 people, all women. Few women work in manufacturing in India, and the company wants to prove they can. With the help of robots, the women test battery cells, produce battery packs, assemble mopeds that start at about $1,200, and ship them directly to customers.
India is proving that there is a huge market for even cheaper electric vehicles. But it is unclear whether India will be able to scale up production to revamp its own transportation system and help bring cheap electricity to other developing countries. The raw materials to make batteries are in global shortage, and Indian automakers have to compete with bigger companies like Tesla and General Motors.