The weekend read: India's electric future

An interview with Abhishek Saxena of NITI Aayog

The weekend read: India's electric future

Welcome to the first weekend edition of Lights On, a newsletter that brings you the key stories and exclusive intel on energy and climate change in South Asia.

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Traffic jam in Dwarka, Delhi - Image by Lou Del Bello

As Delhi braces for the extreme air pollution that has now become a fixture of its winters, people are increasingly talking about what it means to have a liveable city. India is betting on electric mobility to both reduce heat trapping emissions that are bad for the climate and remove air pollution from the streets. But what does it take to become a global leader in the electric mobility sector? And is India ready for the EV revolution that the government has been talking so much about?

I sat down with Abhishek Saxena, a public policy expert with the government’s policy branch NITI Aayog, who specialises in electric mobility and climate change. Over coffee in my favourite Delhi cafe, we talked about the future of the sector, on whether we should fear a lithium shortage and why ultimately walking is better than taking a car, even an electric one.

LDB: What’s the future of electric mobility in India? What will tomorrow’s cities look like?

Saxena: India as a market is very different from many Western countries, it is heavily dependent on walking, cycling and smaller forms of mobility. The data says that you have somewhere around 80 percent two wheelers on the roads, 15 percent of cars, the remaining 5 to 6 percent is shared by buses and three wheelers and other modes of transport. And if you look at how people actually move, 30 percent don't venture out for work, the next 30 percent move by foot, the next 20 percent use a bicycle.

In India you have only 17 cars per thousand population. Compare this to a city like Atlanta, in the US, where you have 900 cars per thousand people, the difference is huge. India is a developing economy, with a per capita income of $2,000, but we are growing rapidly and people will start to move a lot more.

Do you want to actually move them in cars? Electric cars may be cleaner but they still generate emissions and congestion on the road. That’s why we are focussing on the electrification of two wheelers, three wheelers and buses first.

We want to nudge people towards shared means of transport, with a lower carbon footprint, rather than promoting personal mobility. So we don't want to build an Atlanta, rather we are looking at something similar to Bogota, the capital of Colombia, where a lot of people are using buses and shared transport, and personal mobility is on the lower side. Countries like the Netherlands or Colombia have shown that this can be done.


Abhishek Saxena

Trying to navigate Delhi on foot can be a stressful business. I think we can agree that it’s not a city designed for bikes and pedestrians, and the same can be said for many other Indian cities.

Let’s be honest about it, Indian urban planning has designed roads for the movements of high speed cars. And it’s not just Delhi. If you go to Lucknow and Bhopal you will see flyovers and flyovers coming up, but you'll never see a footpath adjacent to that.

There is a strong disconnect between how we are trying to build our infrastructure for expressways and highways, and then we want people to walk, cycle or use electric scooters, which are the low speed ones.

I think a lot of it has to do with how Western cities, particularly in America, are shaping up. We're trying to follow that car-led urbanisation model, and a large urban sprawl happening. But in truth the most sustainable way to move is walking and cycling. It’s better from an individual perspective, because it’s healthy, and also from an ecosystem perspective, because it reduces pollution.

You said that electric cars still generate emissions. This is a thorny debate. Some people question whether electric vehicles (EV) are really much cleaner or just move the emissions goalpost away from the tailpipe. In which case, is an EV revolution even worth it?

Let's try to understand where the emissions are generated in the EV production chain. You have emissions on the mining side, when you're extracting lithium or cobalt. Emissions are also generated during the manufacturing activity, which includes the processing of raw materials. That said, a lot of studies have actually shown that from a life cycle perspective, electric vehicles are much cleaner than internal combustion engines.

For example, at this point of time, the Indian grid generates around 700 grams of CO2 per kilowatt hour (kWh). We at NITI Aayog have done an internal study, projecting a 2030 scenario in which the emissions factor comes down to somewhere around 580 gr per kWh, [because you have more clean energy in the mix]. So not only do you save a lot of emissions, but you also reduce air pollution. The savings are huge.

Internal combustion engines already on the road are not getting cleaner, but the electricity powering your EV is becoming cleaner, and so the footprint of any EV on the road today goes down over time.

Another open question when it comes to scaling up electric mobility in India is that currently we don’t know what happens to discarded batteries, which are full of potentially harmful chemicals. If we are going to add millions of such vehicles to the fleet we are staring at a potential environmental crisis. Is India going to regulate battery disposal and recycling soon?

I'm aware that currently a lot of batteries are not getting recycled in a scientific way. In the last six months the Ministry of Environment has come up with an ‘extended producer responsibility’ mandate for factories. This means that the battery producer is essentially required to take the product back at the end of its life and recycle it in a scientific way.

In India there are umpteen number of regulations, but implementation is the biggest challenge.

So, for that I think it is essential that automobile manufacturers themselves take a step in this direction, and that there is a business case for doing so. You will be surprised to know that this is not just a waste problem, but a mineral retrieval problem. Multiple stakeholders we spoke to say that we can recover 70 percent of the lithium from a battery. And that's a business case for them, because this way we don't have to import it from other countries.

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Speaking of raw materials such as lithium and cobalt, many see the availability of these minerals as a potential vulnerability of the EV manufacturing industry, because the vast majority comes from just a few countries such as Chile, or Democratic Republic of Congo. Where does India stand on this?

From a battery perspective, we did a study in 2017 exploring whether India can become a global leader in battery manufacturing. So what we found out was that only 19 percent of the value of the whole factory has to be imported, which is essentially lithium, cobalt, or probably high grade nickel. The rest can actually be domestically added and we have the capacity to do so. Having said that, you know, EVs are essentially a technology driven revolution, not a policy driven revolution. Currently, researchers across the world are at work to come up with better chemistries, and alternative industries. For example, we can look at a scenario where you have sodium ion batteries or aluminium ion batteries, where these materials would not be required. It's not as if lithium ion batteries are the be-all and end-all.

The government wants to boost electric mobility in India, and current policies such as the FAME scheme seem also focussed on creating a strong manufacturing base. According to some industry leaders, this can be damaging because it penalises imports at a time where there isn’t enough domestic capacity to meet demand. What’s your take on this?

You'll have to look at how EVs are used as a policy lever by different governments across the world. So a lot of governments in Europe are using electric mobility as an environmental policy lever. So they're saying that they'll reduce their emissions, they clean up their air, and it will help them meet their climate targets. Countries like China have used it as an environmental policy, but they have also used it as their industrial policy.

Now, in the automobile space India is a global leader, we are the largest manufacturer of two wheelers, three wheelers and tractors. We are the second largest manufacturer of buses and the fourth largest manufacturer of cars. And the automobile sector is giving employment to 30 million people directly. And now you are at the cusp of a technological revolution, and we wouldn't expect India to lose that relevance. It is also important that we keep those 30 million people employed. Once EVs overtake internal combustion engines, a lot of jobs will move to the new mainstream sector.

All stakeholders agree that domestic manufacturing is essential, but there is still disagreement on how fast Indian EV makers can be expected to take the lead. Too soon and the industry may not be ready, too late and India will lose the race to other countries. How fast do you think this shift should happen?

It's a chicken and egg situation, but as NITI Aayog we are firm believers that the localization [of manufacturing] should start right now when the industry is at the nascent stage, because a lot of countries are already building up their capacities and they have already captured the global value chain.

So, I think in the geopolitical scenario of today it is essential that we aim at a ‘first mover advantage’. And you must not forget that with its massive manufacturing capacity, India is producing two wheelers not only for its own roads, but also for many other countries in South Asia, Africa, Eastern Europe and South America. It is essential that we build our capacity right from day one, so, when these markets go electric, we'll be able to cater to them. We want environmental and industrial policies to go hand in hand.

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