MUMBAI -- Prime Minister Narendra Modi has kicked off India's race to turn all new light-vehicle sales electric by 2030. The largest order has gone to a company that hasn't commercially started producing the vehicles.
Tata Motors hasn't sold a single electric car yet, though CEO Guenter Butschek says its late-mover status is an advantage at a time when technology advances are leading to a fall in costs.
Tata along with Mahindra and Mahindra -- India's sole electric carmaker that plans to boost its vehicle manufacturing capacity to 5,000 units a month -- underscore the distance to be covered when compared with China and the U.S.
Ramping up production of electric vehicles in a country where automakers sell 2.5 million fossil fuel powered units annually is just one part of the problem, finding uninterrupted power supply is another.
In addition, nonexistent charging infrastructure further widens the gap between India and China, the current global leader. It had 336,000 new registrations in 2016, more than double of 160,000 in the U.S., while India had just 450 cars hitting the roads, according to the International Energy Agency.
"The government needs to set up charging infrastructure to make this electric business model sustainable," said Ram Kidambi, partner at consultancy firm A.T. Kearney. "Indian automotive companies may be able to supply electric vehicles meeting the deadline. But the problem is what do the car owners do without the charging infrastructure?"
The pursuit for all electric new car sales in less than a decade-and-a-half is part of Modi's plan to champion the cause of combating climate change. Bloomberg New Energy Finance predicts the target will be "incredibly difficult" in the absence of a clearly defined policy and without subsidies. Chinese firms have benefited from generous funding offered by various regional governments.