The Dark Side of Electric Vehicles.

Electric Vehicles (EVs) are hailed and promoted by governments and car manufacturers as the technology decarbonizes the transport sector. In India, transportation sector emits an estimated 261 tonnes of CO2, of which 94.5% is contributed by road transport. According to World Health Organization (WHO), among the 20 most polluted cities in the world, 14 are Indian cities. Moreover, the fuel prices have increased sharply since the last year and are predicted to increase further because of the Russian invasion on Ukraine.

All these reasons have made people to turn to electric vehicles as the government has provided incentives to people by introducing subsidies. Under section 80EEB, a total tax exemption of up Rs 1,50,000 can be availed when paying off the EV loan. This tax exemption is available for both 4-wheeler and 2-wheeler EV purchases. So, the future looks bright for EVs; but this future will not arrive without an environmental cost. The market for EVs, in the developed world has increased rapidly in not less than a decade.

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The EV manufacturers market them as ‘clean and green’ technology that hides the dark side of EVs, which consists of embodied emissions, lithium, cobalt and many sustainability and ethical issues.

While EVs produce no direct exhaust pipe emissions, the production, distribution and disposal of EVs are highly poisonous. The production of an EV involves many of the same polluting processes as an Internal Combustion (IC) engine but the only difference is that it uses lithium-ion and cobalt batteries to power the shafts. The processes involved in making EV batteries is where the ‘green’ image of EVs starts to fall apart.

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The lithium-ion battery supply chain stretches from Europe to Latin America and Africa. Over half of the earth’s lithium resources are found in the so-called Lithium Triangle which spans across Bolivia, Argentina and Chile. Lithium mines have an environmental impact through their destructive extraction processes. Landscapes are dug up and scarred, habitats can be destroyed, and chemical runoff can cause severe water pollution. Mining for lithium also consumes a tremendous amount of water, about 2000000 litres per tonne of lithium. This has caused water shortages in Chile, leaving them no enough water for daily-public use.

Cobalt is another key ingredient for the lithium-ion battery. Cobalt resources are concentrated in the Democratic Republic of Congo where numerous cases of human rights abuses have been filed in the country’s cobalt mines: unmitigated health risks from the working environment, child labor etc. Battery sustainability issues do not end there. At their end-of-life, the batteries mostly end up in in landfills. No effective disposal technique is adopted because it is currently cheaper to extract new raw materials for batteries than it is to reuse old batteries.

Putting things into perspective, EVs are much better for the environment compared to IC engines as the decarbonize transport sector, but we should be careful about their framing as a solution. So, EVs cannot be regarded as the ‘perfect’ replacement for fossil fuel-run engines in contrast to what they are advertised of being but awareness calls for the fact that the nature is letting people choose between bad and worse at this point of time in history.

COVID-19 CHANGE THE WAY WE WOULD TRAVEL?

In the face of an unrelenting pandemic that continues to ravage the world, it doesn’t take a fortune teller to predict that urban mobility will change dramatically.

Concerns about hygiene and social distance are at an all-time high, especially in India’s densely populated metropolises. The concept of shared mobility and public transportation has been especially tarnished by the second wave. Uber and Ola, for example, are fighting back, with the former offering 9,000 free online medical consultations to drivers and their families. Uber also announced a decision to vaccinate 1,50,000 of its drivers in the next six months. Even automobile brands like Maruti Suzuki and Tata Motors have extended their warranty and service packages for newly purchased vehicles, ensuring that car ownership does not feel like a burden during lockdowns.

The need for personal transportation is obviously greater than it has ever been. However, economic uncertainty, as it was last year, is providing the same need, especially at the entry level, preventing buyers from securing funds for such a large purchase. Given that social distancing and passenger health will remain associated for the near future, the rise in fuel costs is also acting as a significant deterrent for first-time car buyers, a customer segment that should logically grow in size. So, how do both consumers and automakers break the impasse?

The ideal thing for brands, especially entry-level carmakers like Maruti Suzuki and Hyundai, is to offer customers more innovative financing options. But it isn’t just carmakers who must change their ways. Used vehicle portals, taxi aggregators, and electric two-wheeler startups, among others, all have the potential to offer novel solutions. For car companies, this begins with appealing subscription models that have the same advantages as private car ownership without the associated overall costs.

Leasing

Leasing is not a new phenomenon, even in India, where car ownership is seen as a sign of upward mobility. Since most car buyers find the idea of making a down payment too overwhelming in these financially unstable times, leasing allows them to simply rent to a car for a set period of time. Maruti Suzuki and Hyundai, two of India’s top-selling car brands, offer attractive leasing options, especially for entry-level models like the Grand i10 Nios and Santro. Maruti Suzuki has partnered with Orix Auto Infrastructure Services India for a subscription programme that is gaining traction in the Delhi NCR and Bengaluru areas. There’s no down payment, no registration, insurance, or annual maintenance fees; all you have to pay is a monthly sum that’s equal to or less than your EMI costs.

Used Cars

The used car market remains the most disorganised of the bunch, with proper certification and websites providing legitimate price estimates previously serving as roadblocks. According to Statists, the size of the used car market in India in 2020 was greater than the size of the new car market (as reported by Hindustan Times). The market, which has increased by 50% year over year, is expected to continue even after we ride out the second wave and reopen. Greater clarity and better funding options, on the other hand, may help the segment.

Shared Mobility

With cab aggregators like Uber and Ola taking strong steps to alleviate our collective fear of entering a cab, it’s only natural that they build thoroughly sanitized compartments, separating not only the driver and the rider, but also any other co-passengers who might be sharing the journey. When the medical system isn’t overburdened, the aggregator may also display the driver’s vaccine credentials, as well as the outcomes and dates of regularly administered Covid-19 studies. A simple temperature check won’t suffice.

The rise of Electric Scooter

Electric two-wheeler startups have the ideal opportunity to revolutionize urban freight mobility, with the e-commerce industry projected to expand exponentially. Electric scooters and cycles are well positioned to replace the traditional modes of mobility used to make deliveries in geofenced urban confines, where long distances are not a major concern.

According to P&S Intelligence, the new Bharat VI norms have increased the prices of petrol-powered two-wheelers by 7-15 percent, further incentivizing e-commerce brands to adopt more sustainable modes of transportation. Since low-cost scooters are also low-speed, swappable battery options would be favored over charging batteries.

The growth of the electric two-wheeler market would help more than just e-commerce. According to a PRNewswire survey, demand for e-scooters and motorcycles in Tier I, II, and III cities is growing at the fastest rate in Karnataka and Uttar Pradesh. Ather Energy, a local brand, has already started manufacturing scooters in its new 4,000-square-foot factory in Hosur.

Though India’s public transportation infrastructure varies by city, a survey conducted by The Energy and Research Institute (TERI) India found that 35% of respondents are likely to switch modes of transportation after Covid19. Although this is good news for an ailing automotive industry that is expected to rise in the single digits in the future, it could exacerbate traffic and pollution in most Tier I and II cities. Although we don’t know how widely non-motorized modes of transportation would be adopted, it’s critical that cyclists and walkers be considered for short distances, as they could be much more preferable to public transport.