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CURRENT AFFAIRSEDITORIAL BRIEFSTHE HINDU : SEPTEMBER 2019

Editorial Brief: What is the economics behind e-vehicle batteries?

Electric Vehicles : What it is?

An electric vehicle, also called an EV, is one which uses one or more electric motors or traction motors for the propulsion. An electric vehicle may be self-contained with a battery, solar panels or an electric generator to convert fuel to electricity.

What has been the story of electric vehicles in India so far?

In May 2019, the NITI Aayog proposed to ban the sale of all internal combustion engine (ICE) powered three-wheelers post March 2023 as a measure to switch to electric vehicles. It was also suggested that all new two-wheelers below 150cc sold after March 2025 should be electric vehicles.
Later this year in July, the Union Budget announced tax incentives for early adopters of electric vehicle in consonance with these proposals.

How are cost structures of conventional vehicles different from that of electric vehicles?

Comparing the costs involved, the portion of the costs of the drive-train of electric vehicles (the system which connects the transmission to the drive axles) in comparison to the cost of the entire vehicle is 4% lower when compared to ICE vehicles.

electric vehicles


This is because of the lesser number of parts present in the electric drive-train. However, nearly half the cost of an electric vehicle is covered by its battery pack. In order to achieve any meaningful reduction in the physical value of the electric vehicles, the cost of battery packs has to be decreased significantly.
READ MORE : Editorial Brief: RBI- A CENTRAL BANK OR GOVERNMENT PIGGY BANK?


What makes up the battery pack in an electric vehicle and what is the cost involved?

Lithium-ion batteries (Li-ion) are generally used in the electric vehicles as no new technologies are available for immediate commercial usage.

About 60% of the total cost of the battery is covered by its key-components i.e., cathode, anode, electrolyte, separator, among others while the remaining 40% is covered by the Labour charges, overheads and profit margins. However, labour comprises a relatively small component of the overall cost. If any reduction is to be made in the cost of the battery pack, that will have to come from a reduction in materials cost or the manufacturing overhead.

What has been the trend about the cost of the Li-ion battery pack over the last decade?

There has been a fall in the price of these battery packs over the past few years. A number of reasons owing to this decrease are the technological improvements, economies of scale and increased demand for lithium-ion batteries.

However, it is quite uncertain about the further reduction in the cost of the batter, as the raw materials account for 60% of the cost of the battery pack used in the electric vehicles, and hence, the room for further cost reduction is rather limted.

What is India's stand on adoption of electric vehicles?

According to the NITI Aayog, 79% of vehicles on Indian roads are two-wheelers. Hence, in India, adoption of electric vehicles will be driven by two-wheelers rather than cars in high numbers. Further, the three-wheelers and cars costing less than Rs.10 lakh account for 4% and 12% of the vehicle population, respectively.

As an additional advantage, two-wheelers will also require smaller batteries as compared to cars and hence the overall affordable cost.

What need to be done is that India should manufacture Li-ion cells in-house. Now, cells are imported from other countries and “assembled” into batteries. It is true that setting up a Li-ion manufacturing unit requires high capital expenditure, but battery manufacturing in India is expected to grow as electric vehicles grow.
GET MORE IN: THE HINDU EDITORIAL BRIEFS


Are these electric vehicles completely environment friendly?

Unlike other conventional ICEs, in which petrol or diesel fuels the engine, the electric vehicles uses batteries and hence electrons supplied by the battery fuel the vehicle. And as we all know, the battery is a device that stores electrons/energy which is sourced from electricity and hence, can be considered as eco-friendly.

Talking about the India's electricity generation, presently, most of India’s electricity is generated using conventional sources. To talk in numbers, over 90% of India’s electricity was generated from conventional sources in 2018-19, including coal, and around 10% was produced from renewable sources such as solar, wind and biomass. Thus, the Electronic Vehicle charging infrastructure needs to be powered through renewable sources to make it truly sustainable.



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