These are the best of times. Even if you are a climate change denier, one thing is becoming more apparent: the race towards adaption of climate change mitigating technologies is happening faster than we thought. One simple evidence: the world’s quest for electric vehicles.
The trend of electric-powered cars has grown far beyond initial hybrids like the ubiquitous Toyota Prius. In fact, it would not be wrong to say that the world will move beyond these initial hybrids in the future because of their dual costs of having two separate systems in place. Nonetheless, the initial test of hybrids has helped the transition to fully electric vehicles which is still happening at a faster pace. For instance, earlier in the year, Ford Motor Company announced that it is developing hybrid versions of its strong F-150 pickup and muscular Mustang, one of the best-selling vehicles in the US, and taking the first step to a possible all-electric version in the future. Then last month, Volvo said starting 2019, all its newly released models would be hybrid or all-electric. This was followed by the news from Britain and France, both of which plan to ban the sale of new petroleum burning vehicles by 2040.
Then there was an unexpected announcement from India. Rather, the most ultra-ambitious announcement so far. India, which is the world’s fifth-largest automobile market, plans to sell only electric vehicles by 2030 in a bid to slash its oil bill by some $60 billion and emissions by 37%. To kickstart this project, the Narendra Modi government has decided in May to purchase 10,000 electric vehicles through the Energy Efficiency Services (EESL), a state-run agency, in two separate tenders. The tenders that will be floated by EESL is touted as the world’s single-largest EV procurement tender brought forward by any government so far. The first tender has already been floated and, earlier this month, EESL announced that Mumbai-based Mahindra and Mahindra (M&M) would join Tata Motors to sell as many as 500 electric cars to the Indian government. Tata Motors, which owns Jaguar Land Rover, will supply 350 and the rest will come from M&M. It was Tata Motors earlier which was selected as the winner of a global bid for the EESL project, but subsequently, M&M joined the race after agreeing to match the price offered by Tata. In perspective, this may be huge.
India has clearly signalled that it wants to leapfrog in this technological game, knowing well that it has enough engineering expertise, domestic investments and a huge market to propel the home grown push to the innovation rather than relying on the global manufacturers such as the likes of Tesla to solidify its position in five years. What it will do in the future is also a transition to quality R&D in the domestic market, providing employment opportunities to thousands of young graduates with advanced engineering degrees and propelling domestic mass market of spare parts, technicians, vendors, and merchants.
The behind-the-scenes work to prepare the leapfrog is visible just after the announcement of EESL’s first tender. A new auto policy is in the works and will include a roadmap for electric vehicles and is likely to be made public before the year-end.
The message from Indian policymakers is clear: car manufacturers will have to diversify and the policy to transition to electric vehicles is here to stay.
Nonetheless, the biggest player in the EV space is going to be none other than China. In September this year, it already announced its ambition when it said it would eventually ban the sale of gasoline and diesel-powered cars at an unspecified date. China is making all out efforts to be at the center of all EV R&D — not only from domestic players but from international players as well. Volkswagen, the German auto giant, after its disastrous diesel gate scandal, is preparing for a swift expansion in its output of electric cars next year — and the biggest jump in production will be in China. General Motors is making China the hub of its electric car research and development. Renault-Nissan, the French and Japanese carmaker, and Ford Motor Company have hustled to set up joint electric-car ventures in China. The biggest players are shifting significant R&D work to China as the country invests heavily in car-charging stations and pushes automakers to embrace battery-powered vehicles. The Chinese regulator has made its pitch clear: if global manufacturers want to sell their old internal combustion engine cars in China, they must sell the latest EVs too. Many are puzzled by this regulation but it makes sense and is in the best interest of the Chinese.
What our neighbors are doing, Pakistan is nowhere close. We announced an auto policy last year with an emphasis to welcome new entrants and to allow one-off duty-free import of plant and machinery for setting up an assembly and manufacturing facility. It permitted import of 100 vehicles in the form of completely built units (CBUs) at 50% of the prevailing duty for test marketing after the groundbreaking of the project. The new policy also reduced 10% customs duty on non-localised parts for five years against the prevailing 32.5%. This is all good. But it still lacks the punch of innovation and a call to move towards newer technological horizons. Our auto policy implies that we will stick to petrol and diesel, not decreasing our addiction to oil imports and not rejuvenating R&D and better-paying jobs for our graduates. It also implies that we will continue to provide a way to global manufacturers to rule our markets instead of extending ‘made in Pakistan’ tag.
In all cases, the EVs have become a global phenomenon and are here to stay. Imagine the mass-production impact of EVs which could mean that in the future renewable energy technologies can power our cars.
Imagine what could be achieved if spending half our budgeted amounts per year on oil and diesel, we spend it on solar, wind, geothermal and tidal generation, on smart grids and microgrids and on more small and efficient appliances and devices self-powered by solar energy. Calculating the potential of such transformation would require policy direction, smart regulation and a faith in newer more powerful technologies. Such a future may have hurdles but such a future is worth attempting.
After all, the future is electric.
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