Better public transport to reduce dependence on China’s EV supply chains

India’s dependence on foreign supply chains such as China for critical components of electric vehicles (EVs) will continue and to counter this, the world’s third largest energy consumer should invest in expanding its public transport network, the Economic Survey suggested on Friday.

It pointed out that in countries like Brazil and China more than 50 per cent of urban residents enjoy convenient access to mass transit. However, in India, only 37 per cent of urban residents have easy access to public transportation.

“Expanding the public transportation network is another avenue of reducing dependence on overseas supply chains that e-mobility entails and will entail for quite some time to come,” theSurvey said.

Indian cities are making heavy investments—and rightly so—in metro rail networks and expanding their coverage, it added.

To replicate the success of other nations, the Survey suggested that India must focus on developing integrated transport systems that efficiently connect buses, metro rails, and other modes of transit.

Investing in making public transportation more efficient, reliable, comfortable, accessible, and safe will also be a significant step towards achieving net-zero goals while reducing our dependence on imports.

“Moreover, a robust public transportation system will also help reduce traffic congestion, promote energy efficiency, and ensure that the benefits of clean mobility are accessible to all socio-economic groups, unlike private e-mobility solutions, fostering a more resilient and equitable energy transition,” the Economic Survey pointed out.

Mitigating road transport emissions, which comprise nearly 75 per cent of the emissions from the transportation sector, 23 is critical to India in achieving its net-zero goals by 2070.

EVs and China

Electric mobility is an important element in India’s path to net-zero and India has made impressive strides in promoting the domestic manufacture of Electric Vehicles (EV). However, to sustain the growth momentum, there are some important considerations to keep in mind.

For instance, the Survey said manufacturing an EV, relative to a conventional car, requires nearly 6 times more minerals to produce, most of which are utilised in producing the EV battery.

“This is an important consideration as many minerals crucial to EV manufacturing are scarcely available or processed in India while simultaneously being concentrated in very few countries. The Ministry of Mines has analysed the 33 critical minerals vital to India’s economic security and found that 24 are currently at high risk of supply disruptions,” it pointed out.

China commands a significant share of critical mineral processing and production globally. Besides, the lack of viable alternative battery technologies reinforces China’s dominant position in Lithium-ion batteries.

Leading EV manufacturers have noted an increasing proportion of Chinese imports in their total material expenditures, reflecting a significant dependence on China for certain resources and technical know-how.

Inward-looking policies

“Going forward, policies for EVs must focus on de-risking supply chains by promoting a more self-reliant ecosystem powered by increased R&D in advanced battery technologies, such as sodium-ion and solid-state batteries. Securing intellectual property in this domain can prove invaluable,” the survey said.

Additionally, facilitating investment in battery recycling infrastructure can yield greater long-term gains for the Indian automotive sector, it added.

In the interim, PLI schemes can also reward the making of EV cells (lithium-ion cells), as most manufacturing and value addition happens up to the cell-making stage.

“Furthermore, India must aim to establish technology transfer agreements with other nations that are also seeking to diversify their supply chains. Partnerships with other aspiring nations can help distribute the high costs of securing a comparative advantage in the global market,” the survey recommended.