| Introduction: Give brief context to the question Body: What is the role of such minerals in the EV industry and how does government policy influence the EV ecosystem? Conclusion: Way forward |
Critical minerals play a vital role in advancing and expanding the electric vehicle (EV) industry in India. EVs are reliant on a variety of minerals and metals that are essential for their battery systems, electric motors, and other crucial components. These minerals are fundamental for manufacturing lithium-ion batteries and permanent magnets used in electric motors.
Role of such minerals in EVs
- Lithium: Lithium is a key component in EV batteries. India lacks significant lithium reserves, which makes it dependent on imports. Jammu and Kashmir has the largest deposit of lithium in India.
- Cobalt and Nickel: These metals are equally essential in the manufacturing of batteries. India is actively working to diminish its dependence on these resources by exploring alternative chemical formulations and promoting recycling practices.
- Niobium: It is used in electric vehicles for battery improvement, lightweight, enhancing motor efficiency, emissions reduction, and durability.
- Rare earth elements: Rare earth elements are used in electric vehicles for powerful motor magnets, catalytic converters, battery technologies, and lighting systems.
How have recent policy changes influenced the EV industry?
- FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) Scheme: The FAME II scheme provides financial incentives and subsidies to promote the adoption of EVs in India. These incentives can help reduce the upfront cost of EVs and stimulate demand.
- Encourage domestic mining: The Centre has specified new royalty rates by amending the Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957. The lowering of the royalty rates effectively aligns India’s royalty rates with global benchmarks and paves the way for commercial exploitation of strategic minerals through auctions, which can be conducted by the Centre or states.
- Exemption from tax: EV car owners are exempted from the registration fee and road tax as per new rules of the Government and the government is committed to gradually phasing out the sale of internal combustion engine (ICE) vehicles.
- Charging Infrastructure: The government is investing in charging infrastructure to address range anxiety and promote EV adoption. The government is also promoting the recycling and reuse of EV batteries to extend their lifespan and reduce the need for raw materials.
Conclusion
The availability and access to strategic minerals are vital for the development and proliferation of electric vehicles in India. Addressing the mineral supply chain remains a crucial aspect of ensuring long-term sustainability and competitiveness in the EV market.
