One of the starkest ways the coronavirus pandemic has upended daily life is its impact on transit: simply put, we have stopped moving around. Flights and cruises are being canceled, public transport is banned and highways have become eerily empty as commuter traffic peters out. The coronavirus outbreak has stalled the electric vehicle (EV) market. The battery raw materials market must contend with both operational disruption and challenging mine economics.
The coronavirus outbreak in China is going to have an effect on the green energy sector, including renewable energy sources, battery energy storage, electric vehicles, and renewable heating and cooling. China is a world leader when it comes to renewable investments, which can be seen in the country’s wind power installation, wind turbine manufacturing, and solar photovoltaic (PV) manufacturing. The country is increasing its portfolio of renewable, decreasing coal consumption, and enhancing efficiency to deal with carbon emissions.
How bad has the supply disruption from China been?
The industry’s over-dependence on China has been showcased recently with the coronavirus outbreak leading to disruptions in the supply of components. China accounts for 27 percent of India’s automotive part imports and major global auto part makers such as Robert Bosch, have factories located in the Hubei province. Owing to the closure of the factories of these companies, there has reportedly been a delay in the production and delivery of vehicles like Bharat Stage Four (BS-IV) compliant models. In March 2020, all OEMs witnessed a sharp drop in wholesales due to COVID-19 related lockdown and Bharat Stage Emission Standards (BSVI) transition. COVID-19 led to supply chain disruptions and production halt in the latter half of March 2020. According to a report released by Fitch Solutions, vehicle production in India is likely to contract by 8.3 percent in 2020 following an estimated 13.2 percent decline in 2019. Covid-19 will also make the transition to BSVI emission norms difficult.
How does the future look for the Indian EV Market?
There has been a spurt of electric vehicle development activity post the FAME-II scheme. Mass adoption of EVs is expected only in the medium term though. As EV technology evolves and ride-sharing services make inroads into tier-II cities, the growth rates for 2-wheelers will be impacted over the medium term. Passenger vehicles will adopt alternate technologies such as hybrids on the winding road to electrification, while commercial vehicles are early adopters of EV technology, led by state incentives under the FAME-II scheme. Limited charging infrastructure and elevated product prices is a key constraint though.
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