Source: IE Relevance: GS-III (Environment, Science and Technology) Context: HSBC Research advises that India should focus on hybrid vehicles as a transitional measure in its decarbonization initiatives over the coming 5-10 years.

Exploring India's Automotive Strategy: Embracing Hybrid Technology

Hybrid Vehicles as a Key Transition Step:

  • The combination of electric motors and internal combustion engines in hybrids is globally recognized as an essential transition towards full electrification.

  • Companies like Tata Motors and Mahindra & Mahindra are focusing on Electric Vehicles (EVs), while Maruti Suzuki, in partnership with Toyota Kirloskar, is emphasizing hybrid technologies.

  • Tax policies in India currently benefit certain vehicle categories, disadvantaging other technologies due to higher taxation.

Support for Hybrids by HSBC:

  • HSBC recommends hybrids and compressed natural gas vehicles as sensible options for India over the next decade, aiding the shift to full electrification.

  • Hybrids, beyond being cost-effective, are crucial for reducing carbon emissions in India, with a 16% lower carbon output compared to EVs when considering well-to-wheel (WTW) emissions.

  • A comprehensive view of emissions, including factors like mining and power generation, positions hybrids as a more eco-friendly choice in the current context.

Emission Trends Over Time:

  • Analysis suggests that the emission differences between EVs and hybrids will balance out within 7-10 years.

  • With India's non-fossil power generation at 26%, the emissions parity between hybrids and EVs hinges on achieving a 44% non-fossil power generation share. Predictions for 2030 suggest hybrids could emit 8% less than EVs even with a 40% non-fossil power share.

Global EV Adoption Barriers:

  • Subsidy Effectiveness: While successful in countries like Norway, the US, and China, in India, subsidies often benefit the more affluent, leaving out the broader population.

  • Charging Infrastructure: Investment in charging stations is far more effective than subsidies. India's challenge is exacerbated by its unique vehicle composition, heavily skewed towards two- and three-wheelers, and a lack of adequate public charging facilities.

Power Source Dilemma: The dependence on coal for electricity generation for EVs introduces a paradox, reducing direct emissions but perpetuating overall pollution.

Challenges Specific to India's Market:

  • The prevalence of two- and three-wheelers requires innovative approaches to develop sufficient charging infrastructure.

  • Subsidy schemes need to be inclusive, targeting not just the affluent but also middle and lower-income groups.

  • The environmental impact of relying on coal-fired power plants for EV charging underscores the need for a greener energy strategy.

  • Lithium import reliance highlights the urgency for India to seek domestic production avenues or diversify import sources.

Conclusion - A Balanced Approach to Electrification:

  • Given the outlined challenges, including subsidy distribution biases, infrastructure gaps, environmental concerns, and import dependencies, hybrid vehicles stand out as a practical interim solution.

  • Their comparatively lower carbon footprint makes hybrids an appealing option, fitting well with India's specific needs and the emission reduction trajectory outlined by HSBC.

Advait IAS