How the EV push is reshaping the energy and auto sector and benefiting the environment

Electric vehicles are reshaping the automotive industry. Sales of electric vehicles have increased by 85% between 2020 and 2021, where sales of plug-in hybrid vehicles have more than doubled, with an increase of 138% compared to the previous year. Sales of electric vehicles are expected to grow steadily in the coming years. Booming in an otherwise slow market, battery-powered vehicles are certainly a plus for the environment, but pose a big threat to automakers and their parts suppliers who are slow to react to the inevitable change. The transition journey from conventional petrol models to electric vehicles has begun for India’s automotive and energy sector, with an initial focus on 2Ws and public mobility vehicles. Currently, the conversion rate of 2W to electric vehicles is 2%, which is expected to reach 38% by 2030.

Why renewable energies?

The transition to electric vehicles is now a reality and, with it, all associated industries must evolve and innovate. More importantly, the energy and power sector is now making massive investments to switch to renewables from the conventional method of generating electricity by burning fossil fuels. The benefits of renewable energy over the devastating effects of fossil fuels are undeniable: from reduced water and land use, less air and water pollution and reduced greenhouse gas emissions. Greenhouse effect. Moreover, their local and decentralized character as well as the technological development would be beneficial for the economy and the population in general.

To undo the effects of climate change, India aims to achieve net zero emissions by 2070 and meet fifty percent of its electricity needs from renewable energy sources by 2030. In January 2022, the India’s installed renewable energy capacity stood at 152.36 GW, or 38.56% of the total installed capacity. Leading power producers in India like NTPC, Tata Power, Adani, JSW Energy and many more are making a decisive and long-term foray into the sustainable source of power generation. Reliance has set an ambitious target to achieve net zero carbon by 2035 and is investing over Rs 75,000 crore in renewable energy.

The battery industry plays an important role in this transition of the energy sector. The demand for lithium-ion batteries to power electric vehicles, smart phones, laptops, etc. and storing energy has grown exponentially, from just 0.5 gigawatt hours in 2010 to around 526 gigawatt hours a decade later. Large groups create industries to manufacture and supply Li-ion batteries. Amara Raja, Exide, L&T, Lucas TVS and Ola Electric are among 10 companies looking to set up gigafactories in India. Reliance also recently acquired a sodium-ion battery manufacturing company, namely Faradion Ltd.

Impact of electric vehicles on the automotive industry and the environment

The auto industry is on track to invest half a trillion dollars over the next five years to transition to electric vehicles, according to one estimate. This money will be spent on remodeling, refurbishing and building factories, training workers, writing software, upgrading dealerships and more. The companies are planning dozens of new electric cars and battery factories around the world.

But not everyone will benefit. Manufacturers of parts such as fuel injection systems, mufflers, etc. could go bankrupt, leaving many workers unemployed. Millions of jobs are there to make, sell and service cars and auto parts, and industry experts predict that producing electric cars will require fewer workers because the cars have fewer components. Perhaps most at risk are small industries that produce parts like piston rings etc. At the moment, these companies are busy with their regular operations. They must plan and reshape for the future.

The huge battery market would simultaneously lead to increased demand and possibly a shortage of key materials like lithium, cobalt and nickel. Already, the prices of these materials have risen sharply and companies are lining up to grab their source.

Conventional vehicles are one of the main sources of air pollution. Although electric vehicles do not pollute the air, the indirect impact on the environment cannot be ignored since the main source of energy currently is thermal energy produced by burning fossil fuels, which again causes Pollution. Yet the pollution caused indirectly by electric vehicles is less than that caused directly by conventional fuel-powered vehicles. The harsh reality is that switching to electric vehicles would not be enough to save us from the effects of climate change and global warming. We urgently need to switch to renewable and sustainable energy sources.



The opinions expressed above are those of the author.


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