Srushti Parekh

FY MMS B-117
Managerial Economics

PROJECT 1-Charged-Up Companies Seek To Electrify E-Vehicle Plan

Source: The Economic Times
Dated: 11th September 2017

Six leading car makers Tatas, M&M, Hyundai, Nissan, Renault and Maruti are eyeing the
government’s plan to buy 10,000 electric vehicles. Broadly the aim is to put on roads 1 million
electric three- wheelers and 10,000 electric city buses by mid- 2019. The country strives to shift
entirely to battery- powered transportation by 2030.

The tender has already attracted these 6 companies and would be awarded by the end of this
month. Along with competitive tendering which has already begun, the government is also
considering fiscal incentives for e- vehicles. These include zero duties and cheaper electricity to
charge them. Apart from e-vehicles, EESL (Energy Efficiency Services Limited) has also invited
bids for 4,000 battery chargers.

The Principal advisor in the ministry of power and new and renewable energy Ashok
Jhunjhunwala said that with battery costs coming down in 5 years, the capital costs of an electric
vehicle with an acceptable range will be lower than that of a petrol vehicle. The procurement of
these e-vehicles will start in 2 phases in Delhi- NCR region.

Procurement of 1,000 cars in the first phase has now been reduced to 500 vehicles as Mahindra is
the only manufacturer. EESL may also introduce the Make- In- India angle to the procurement of
e- vehicles depending on the success of the initial bid, and in case of larger bids where some
portion of what companies use would be manufactured locally.

To make electric cars even more viable (more than half the cost of which is on account of the
price of the battery) a proposal has also been made to separate the vehicle business from the
battery business. The batteries can be swapped or charged at established stations. The formal
bidding of the tender is supposed to take place on 25th September 2017 and the letters of award
will be given by 30th Sept 2017.