Electric vehicles (EVs) are considered the future of mobility, but they aren't cheap. For Indian consumers, what's cheap is cars running on compressed natural gas (CNG).
Automakers worldwide are fighting off lithium prices and other raw material costs to produce EVs. This is resulting in high prices of EVs. They are still expensive for the Indian market. Hence, the market is moving towards CNG cars. With the recent turbulence in the crude oil market, the next best option is CNG cars, and some companies are expanding their city gas distribution (CGD) network to help with the demand. CNG vehicle sales continued to grow, with passenger vehicle (PV) sales in FY22 up by 55% compared to FY21.
Another alternative for EVs is fuel flex vehicles, which can run on 100% petrol or 100% bio-ethanol. They are flexible vehicles that can operate in any gasoline or blend of gasoline and ethanol. The government is already boosting ethanol use. It approved changes in the biofuel policy for 20% ethanol blending with gasoline by 2025-26. The benefits of flex-fuel vehicles are a better use of foodgrains and increased income for farmers.
Are EVs Not A Viable Option?
The biggest problem with EVs is that they aren't cheap, and there aren't charging stations yet in India. With power cuts in most parts of India, EVs are taking a backseat in the current automobile scenario. Indian consumers are still going for fuel vehicles as they are cheaper and fuel is available everywhere. That's why the Indian government has taken it upon itself to introduce alternative fuel vehicles to cut carbon emissions.
What Lies Ahead?
EVs by Indian automakers like Tata Motors and Mahindra & Mahindra is doing great only in the cities. A section of the Indian population still can't afford EVs. Hence, there's still time for EVs to play big in the Indian auto market.