Issues with EVs, and possible hybrid solution
- HSBC Research recommends that India should prioritize the adoption of hybrid vehicles over the next 5-10 years on the way to full electrification.
Why are Hybrid Vehicles Preferred?
- HSBC believes that hybrids are a practical solution for India's decarbonization drive due to their lower emissions and cost of ownership.
- Currently, total carbon emissions (WTW) from hybrids are 16% less than electric vehicles (EVs), making them a more environmentally friendly choice.
- The analysis considers not only tailpipe emissions (TTW) but also emissions from crude mining, refining, and power generation.
Duration of Hybrid Advantage
- HSBC estimates that it could take 7-10 years for emissions from EVs and hybrids to converge, assuming non-fossil power generation in India increases to 44%.
- By 2030, even if India’s share of non-fossil fuels is 40%, hybrids will still release 8% less emissions than EVs.
Current State of India's Electric Mobility Plan
- India is largely focused on replacing internal combustion engine (ICE) vehicles with battery electric vehicles (BEVs), with Li-ion batteries considered the most viable option.
Challenges for Battery Electric Vehicles (BEVs)
- Upfront Subsidy
- Global experiences suggest that state subsidies are crucial for EV adoption.
- However, there's a concern that subsidies may disproportionately benefit the middle or upper-middle class.
- Electricity Source
- Unlike some countries with renewable-heavy grids, India's electricity generation relies largely on coal-fired thermal plants.
- This raises concerns about the overall environmental impact.
- Charging Network: Building charging infrastructure is crucial for EV adoption; however, India faces challenges due to its vehicle mix being dominated by two- and three-wheelers, each with different charging requirements.
- Value Chain Dependency: India's dependence on a small pool of countries for lithium-ion batteries raises concerns about the sustainability and viability of the EV supply chain.