Page 94 - Nuvama | IC Report 2023

• MANUFACTURING • NEW ENERGY • URBANISATION • CONSUMPTION PREMIUMISATION • EQUITY SAVINGS CULT

correcting rapidly as well (down 22% in CY22). This potentially gives FCEVs (hydrogen-based vehicles)
a further edge over BEVs.
Furthermore, silicon (from sand) is the second most abundant element. It is 26% of earth’s crust
compared with 0.0025% for cobalt and 0.002% for lithium. This suggests that silicon supply can adjust
relatively quickly to rise in demand, whereas cobalt and lithium prices may permanently rise if EVs
become the mainstay.
What makes more sense in India: FCEVs or BEVs?
A fuel-cell electric vehicle is essentially a hybrid electric vehicle, wherein the internal combustion
engine is replaced with a fuel-cell stack. H2, stored in its pure form in high-pressure tanks, is sent
through a fuel cell, wherein it combines with oxygen to produce electricity, which powers the FCEV.

Exhibit 14: 750
Silicon prices have
fallen rapidly over
past few months 600
Index to 100 450

300

150

0
Feb ’19 May ‘19 Aug ‘19 Nov ‘19 Feb ‘20 May ‘20 Aug ‘20 Nov ‘20 Feb ‘21 May ‘21 Aug ‘21 Nov ‘21 Feb ‘22 May ‘22 Aug ‘22 Nov ‘22

Lithium Silicon Cobalt
Source: Nuvama Research, Bloomberg
Unlike BEVs, which need to be charged from external sources, FCEVs produce electricity on-board,
FCEVs boast thereby drastically reducing heavyweight battery capacity. Furthermore, BEVs essentially have a
greater range and driving range of about 400km on a single charge, assuming 30–50kWh battery packs.
shorter ‘refuelling’
time than EVs On the other hand, an FCEV can travel a distance of up to 650km with a battery pack of less than
2kWh. In addition, refuelling of hydrogen tank takes about five minutes as against at least 30 minutes
on a fast charger for BEVs. Besides, hydrogen can be stored for longer durations; in contrast batteries
in BEVs tend to discharge relatively quickly.
Risks: i) High cost involved in the production of hydrogen, fuel-cell stacks and setting up hydrogen fuel
stations. ii) Safety concerns since hydrogen in its pure form is highly reactive.

H2 ecosystem: Development in India
The Government of India announced the National Hydrogen Mission in the Union Budget 2021, thereby
laying down a hydrogen road map for the country. The Ministry of Petroleum & Natural Gas is committed
to augment the hydrogen supply chain infrastructure in the country. The government is working jointly
with several companies on pilot projects on Blue Hydrogen, Hydrogen CNG (H-CNG) and Green

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