For EV charging to take off at traditional pumps, companies will need to come up with a viable business model. Government think tank Niti Aayog has asked the oil ministry to help set up electric vehicle (EV) charging infrastructure at 1,000 fuel stations across the country.
Auto ancillaries would also be impacted on account of the slowdown in demand and production cuts across OEMs. Easing prices of key raw materials such as plastic, rubber (average 8% decline YoY), aluminum (14% decline YoY) are expected to provide some solace on the margins front.
The national budget 2019-20 had an outlay of Rs 10,000 crore for Phase-II of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles scheme to boost electric mobility and increase the number of EVs in commercial fleets.
As a member of Electric Vehicle Initiative (EVI) – a multi-government policy forum – India aims to achieve 30% EV penetration in new vehicle sales by 2030. The journey so far has been quite bumpy, though.
We believe, Indian Auto companies are likely to report another quarter of weak sales and PAT growth during Q4FY19. Sales growth challenges include weakness in overall consumer demand for auto products in domestic market.
About 85 per cent of the outlay would be as a demand incentive applicable to buses, passenger vehicles and three-wheelers registered for commercial usage and public transport, along with privately owned two-wheelers.
Different government departments should consider a bouquet of potential policies, such as congestion pricing, ZEV credits, low emission/exclusion zones, parking policies, etc. to drive adoption of EVs.
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