End User News - Automobiles (cars)

India's ambitious plan to shift to only electric cars by 2030 may spur demand for aluminium

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According to a government statement in March citing Power Minister Piyush Goyal, Indian government would take measures to ensure that by 2030 almost all vehicles in the country are powered by electricity in order to cut oil imports and pollution. India’s fast growing economy and rapid urbanization has become a key driver of global energy growth in the coming years and this has given rise to the need to reconsider the energy sources in the country.  The idea is to stop selling of all gasoline or diesel cars by 2030.

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According to the International Energy Agency, India's plan to sell only electric cars by the end of next decade would require nearly eight times the global stock of electric vehicles. According to the 2015 data, there are 1.3 million electric cars on the road worldwide.  India would need to sell more than 10 million electric cars in 2030, if they go ahead with the energy strategy.  The goal is equal to about 10% of the global target for electric vehicles on the road in 2030 as agreed to in the Paris climate talks.

The details for the project plan are yet to be worked out, "it is an ambitious plan nonetheless," the IEA said. "Regardless, the exact formulation of the target and the extent of its long-term achievement, it is a good step that will help India to be among the global leaders in deploying a technology that is crucial to temper increasing oil import needs, local air pollution in cities, and limit CO2 emissions."

"These are the types of ambitious targets that drive transformations,'' said Clay Stranger, director at U.S.-based Rocky Mountain Institute, which has prepared a report on India's mobility sector with the government's policy think tank NITI Aayog.

The target would cut almost 10%of India's 2030 forecast oil consumption. Still, the country would remain a key center of global oil consumption, second only to China, as road freight transport, petrochemicals and the residential sector continue to push demand higher, the IEA said.

Commenting on the plan, Tushar Bansal, director at energy consultant Ivy Global Energy Pte said,

"The electric vehicles today can only go a limited distance before requiring recharging…Because of the number of infrastructural additions and changes required, replacing gasoline cars with electric vehicles is expected to be a longer drawn-out affair as the market will take time to adjust."

India had close to 5,000 electric vehicles on the road by the end of 2016, according to the IEA in comparison to more than 3 million passenger vehicles sold in the country in FY2016, according to data from the Society of Indian Automobile Manufacturers. Companies like Mahindra & Mahindra Ltd., Volvo Cars, BMW AG and Toyota Motor Corp. sell electric or hybrid cars in India.

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Another issue that makes the conversion difficult is the higher cost of electric vehicles because of the kind of material and components used to make the cars lighter and energy efficient. This however brings about positive prospect for the aluminium producers and makers of aluminium parts and automotive body sheet in India. Aluminium is one of the most preferred metals to be used in electric cars for lightweighting and cosmetic benefits. If we consider government’s Make in India policy, this plan will open up huge business prospects for the domestic OEMs.

 

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