Green number plate

Issue related to Environment and Energy

Source: The Indian Express

Context:

The author talks about the significance of electric vehicles for India, against Delhi’s EV policy experience.

Editorial Insights:

It is almost a year for Delhi’s EV policy which has set the most ambitious target for any Indian state i.e. 25 % share of EVs by 2024, from a baseline of 1.2 % in 2019-20.

The Delhi government put out a comprehensive policy framework that for the first time for any state EV policy in India focused squarely on demand and targeted incentives at the most polluting vehicle segments

Delhi & Its Experience with EV policy:

Fifteen months later, Delhi has managed to turn the tide on EVs by demonstrating a firm political will to address the three key barriers that have plagued the adoption of EVs across India.

The first barrier: high upfront cost of EVs.

Even after factoring in subsidies under FAME, there is still a wide gap between the upfront cost of petrol/diesel vehicles and comparable models of EVs.

The action:

The Delhi government decided to give maximum subsidies for EVs as compared to other states but targeted them at the most polluting vehicle segments.

Delhi became the first state to fully exempt road tax and registration fees for all EVs.

Further, the eligibility criteria were simplified and made universal so that more people can avail of subsidies.

At the same time, making sure citizens can avail of it in a time-bound manner by putting in place a completely faceless and online system for transfer of these subsidies directly to the buyer’s Aadhaar-linked bank account within seven days of an EV purchase.

The second barrier: Unavailability of Charging Infrastructure.

The Action:

With a vision of providing public charging within 3 km anywhere in Delhi, the government and Discoms have facilitated setting up 201 charging stations with over 380 charging points across Delhi in the past two years.

Another 600 public charging points are to be added by mid-2022, the majority at metro stations and bus depots.

The process of setting up private charging points has also been radically simplified.

In partnership with the Discoms, the Delhi government recently launched India’s first single window facility to install EV chargers faster and cheaper than anywhere else in India.

The third barrier: the low public awareness of EVs and their benefits both economic and environmental

The Action:

Delhi became the first state in India to launch a widespread campaign like 8 weeks long Switch Delhi that targeted outreach to RWAs, youth, and corporates.

The campaign created a huge buzz on EVs not just in Delhi but the entire country.

Lesson from Delhi’s Experience:

The experience of Delhi’s EV policy shows that the need of the hour is for a strong political will to fight pollution, creating comprehensive reform roadmaps and following them up with diligent implementation.

It is high time for all other units of India to show a similar resolve and emulate the actions Delhi has taken to transition to clean mobility.

Additional Info:

 Electric Vehicle Ecosystem in India            

India is the 5th largest car market in the world & has the potential to become the top 3 in the future because India needs to cater mobility solutions for 40 crore customers by 2030. At the same time, India needs a transportation revolution for many reasons.

Electric Vehicles & Need for Transportation Revolution for India:

An EV operates on an electric motor instead of an internal combustion engine & has a battery instead of a fuel tank.

EVs have low running costs as they have fewer moving parts & are also environmentally friendly.

In India, the fuel cost for an EV is approx. 80 paisa per km.

Contrast this with the cost of petrol which is today Rs 107 per liter in Delhi or Rs 7-8 per kilometer to operate petrol-based Rs 7-8 per kilometer to operate a petrol-based vehicle.

The consistent increase in fuel prices in the real state plan to encourage all Indians to switch all-electric vehicles.

At the same, the current demand trajectory for cars cluttering up the overcrowded cities that are suffering from infrastructure bottlenecks & intense air pollution is unfeasible.

To make the Indian transport sector decarbonizing, the transition to electric mobility is a prerequisite.

Further falling battery costs & rising performance efficiencies are fuelling the demand for EVs globally.

India & EV:

India is among the few nations that support the global EV30@30 campaign that aims for at least 30% of new vehicle sales to be electric by 2030.

Additionally, Indian’s advocacy of 5 elements for climate changes i.e. Panchamrit  for leading a secure & prosperous future, espouses ideas like:

Renewable energy catering to 50% of India’s energy needs,

Reducing carbon emission by 1 billion tonnes by 2030,

Achieving net-zero by 2070.

The push for EVs is driven by the climate agenda established under Paris Agreement to reduce carbon emissions to limit global warming.

It is also projected to contribute to improving the overall energy situation as India imports over 80% of its crude oil needs.

It is also expected to play a vital role in the domestic EV manufacturing industry for employment creation.

Further EVs & their support services while maintaining secure & stable grid operations, are expected to strengthen the grid & help accommodate higher renewable energy penetration

The real challenge:

For the consumer is the lack of charging infrastructure in India.

EVs are powered by lithium-based batteries that need to be charged for every 200-250 km.

Because of that India needs a dense proliferation of charging points.

Also, a home-based charge has the issue of slow charging.

But India has only 400 charging stations around the country, which is very inadequate in a country as large & densely populated as India.

Further India’s cumulative demand for batteries would be 900-1100 GWH, but India lacks a manufacturing base for batteries & leading to sole reliance on imports to meet rising demand.

Batteries & India:

According to official data, even with very low penetration of electric vehicles & battery storage in the power sector, India had imported more than $ 1 billion worth of lithium-ion cells in 2021.

Though India is yet to grab the opportunity, the global manufacturers are investing huge on battery manufacturing & moving fastly from Gigafactories to Terafactories in India.

With the recent technology disruptions, battery storage has a great opportunity in promoting sustainable development in the country.

With rising levels of per capita income in India, there has been a tremendous demand for consumer electronics that makes the manufacturing of advanced batteries one of the greatest opportunities.

EV policy in India:

In 2013, the GOI formulated the National Electric Mobility Mission Plan that committed to ensuring that by 2030, at least 30% of vehicles on Indian streets would be electric.

The Faster Adoption & Manufacturing of Hybrid & Electric Vehicles (FAME II) scheme commits to providing incentives in terms of subsidies & supporting technology to encourage the manufacturing & purchase of electric vehicles.

FAME with an outlay of $ 1.5 billion provides a mixture of road & registration tax subsidies for EV purchasers.

Finally, the recently launched PLI scheme for Auto & Automotive components for manufacturers of electric vehicles.

At the same time, the private sector has appreciated the inevitability of EV dominance.

The EV market in India is projected to reach $700 million in 2025, a dramatic jump from $71 Million in 2017.

Way-Forward:

To survive in the new world of EVs, grand old American car companies are establishing EV manufacturing factories.

At the same time, Chinese companies are already are the largest supplier of lithium-based EV batteries.

Together will create a new global order that will replace OPEC.

It is high time for India to plan for its place with better charging infrastructure, batter-making factories & small incentives for car companies & consumers to go electric.

The foremost thing India needs to achieve is an uninterrupted electricity supply.

Conclusion:

The forward & backward integration mechanisms in the economy will achieve robust growth in the coming years & enable India to leapfrog to environmentally cleaner electric vehicles & hydrogen fuel cell vehicles.

The efforts will not only help the nation conserve foreign exchange but also make India a global leader in manufacturing EVs & better comply with the Paris Climate Change Agreement.