Electric vehicles sparking interest, says PricewaterhouseCoopers

NEW DELHI, 19 November, 2008: Due to the progress of enabling technologies and a host of positive drivers, pure electric vehicles (PEVs) are garnering plenty of attention from manufacturers and suppliers. The auto sector is now attracting strong venture capital interest in nascent companies providing this technology. To make it into the mainstream globally, however, further technological and infrastructural barriers need to be overcome first.

Pure electric vehicles are not a new phenomenon in the auto industry. In the early 20th century, they were produced in greater numbers than internal combustion engine powered vehicles. Until recently, the lack of suitable battery technology has prevented manufacturers investing in them. While technological issues move closer to solutions, the lack of infrastructure for electric vehicles usage has stunted growth.

Current discussions around climate change are indicative of an ever increasing receptive business environment for electric vehicles. Advancing battery development in this area will however, compete with the industry’s already over-burdened R&D needs while current high battery costs dictate the level of consumer demand.

Jayaraman Sekar, India leader for automotive practice, PricewaterhouseCoopers said, “While electricity is cheaper than existing automotive fuels, and running an electric car costs less, acquisition costs are the main hurdle. Incentivising, subsidising and promoting electric vehicles are all contributing factors to their success while letting the auto manufacturers concentrate on expanding their mobility.”

In India, the Delhi government has decided to extend relief to the extent of approximately 30% of cost to those opting for battery operated vehicles. Prospective buyers of these vehicles will get 15% subsidy and 12.5% VAT reimbursement. In addition, the registration charge and one time road tax will also be reimbursed. These are funded under the Air Ambience Fund. Incentives such as these should be the main stimulus for PEVs.

“Lithium batteries are the most preferred choice for PEVs as it allows more energy to be stored in lighter, smaller space than most alternatives. Reva Electric Car Company is an Indian front runner in PV technologies and they offer the 2 seater Roadster. The recently launched electric 2 wheeler by Murugappa Group re-emphasis the emerging trends in India too,” Jayaraman added.

Battery costs vary significantly depending on the technology so tempering these costs will be crucial. The sustainability of electric vehicles is heavily dependent on the energy mix of a country’s electricity. Using non-renewable resources to generate electricity is unlikely to achieve net reductions in CO2 emissions. Only when pilot programmes sponsored at state level become more widespread will the full market potential for electric cars be unlocked for the next auto generation.



PEV Forecast Scenarios
Assembly volume (k units)


Source: PwC Automotive Institute, Q4/2008


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