Opinion: Is India ready for Electric Vehicles?

Written By: Prashant Agarwal
New Delhi, Delhi, India Published: Jan 29, 2018, 06:30 AM(IST)

Representative image Photograph:( Zee News Network )

The Ministry of Heavy Industry and Public Enterprises, Government of India released the National Electric Mobility Mission Plan, 2020. The Plan came the with a view to enhance national energy security, mitigate adverse environmental impacts, including CO2, from road transport vehicles and boost domestic manufacturing capabilities for electric vehicles. 


Urban transport planning in India has to address numerous challenges which include deteriorating air quality, rising greenhouse gas emissions, and adverse energy security risks. There is an increasing consensus among planners that a range of additional measures will be required, beyond the existing policies, to mitigate the adverse impacts of transport on these sustainability indicators. Electric vehicles (EVs) offer alternate mobility options that can help to redress these adverse impacts. 


EVs so far have remained on the fringe. However, technology and battery advancements are making EVs more attractive to the consumer due to convenience and affordability. The transport sector, which is amongst the largest energy consuming sectors, is globally overly dependent on liquid fossil fuels. 93% of all the fuel used in transport sector was oil based in 2010. The sector is also a major source of GHG emissions and accounts for 22 % of total global energy-related CO2 emissions.


Transport sector energy demand and CO2 emissions would increase at a rapid rate over the next few decades. Realising the threat it poses, emission mitigation and reducing energy consumption in the transport sector have been at the centre of national as well as global energy and environmental policy debates in the recent years.


One of the key ways in which future emissions can be avoided is through the development and use of low carbon technologies. In the context of decarbonising transport, Electric Vehicles (EVs) are one such option for CO2 mitigation from light-duty vehicle fleet.


However, the big question is ‘Would India be EV ready by 2030’?


The Indian Government wants to achieve the mission by 2030 and replace all the ICE(Internal Combustion Engine) with Electric Vehicles. However, Currently EV’s have less than 1% market share and 95% of this market is constituted by Electric Scooters.


In numbers, we have currently around 2000 EV’s while the number of Petrol or Diesel Cars is 30,46,727. We have only one manufacturer producing Electric Vehicle i.e. Mahindra, and the cost of its electric cars comes around Rs 6 lakhs to Rs 11 lakhs with a mileage of around 140 km on a full charge.


If we talk about the charging stations, India currently has around 500 charging stations. To make it scalable, however, Delhi alone will need around 3 lakh charging stations to make the EV’s a true success.


If we do a fact check with other countries, India has set a timeline of 2030 for the new ICE, Scotland has set it to be 2032, France and England have set the deadline to be 2040.


Which clearly shows that India has definitely set itself against a hugely ambitious target.


Will it be able to achieve it?


According to Mr Amitabh Kant, the CEO of Niti Aayog, “despite all these challenges, India has an advantage, per capita usage of cars in India is 20 per 1000 people while the same number for America is 800 per 1000 person, thus we will need to tweak our infrastructure at a very small scale in comparison to what the U.S. has to do”


Moreover, in India, 80% of the transportation happens within 5 km radius. Therefore, the first impetus of government would be to bring change in the public transport. According to him, in 2026, prices of EV’s will be equivalent to cars running on diesel or petrol.


So, while the current scenario gives a grim picture of Electric Vehicles and, on the other hand, the government has made big promises, Amitabh Kant of Niti Aayog believes that India stands at an advantage point when it comes to accepting EV’s.


Then, What are the challenges which manufacturers are facing currently?


Roadmap for EV: We still need a clear Roadmap for EV in terms of whether we are moving with the Battery Swapping or Charging stations.


Fiscal Incentive: Mahindra has a long-pending request for subsidy for its Electric Vehicle, however, Government is not in any mood for a subsidy and wants automobile manufacturer to figure it out.


We need to realise that China has become the 2nd biggest EV’s manufacturer in 2 years is because of its clear roadmap and the subsidy it provided for the Electric Vehicles.


Tax Parity: Currently, the Hybrid is taxed at 28%, EV are taxed at 12% and batteries are taxed at 28%. Therefore, if a manufacturer moves towards a battery swapping model then they have to pay 12% tax on car and separate 28% tax on the batteries and battery being a major component of EV’s, it will increase the cost drastically for the consumer.


Irrespective of, whatever happens, we should learn from our CNG experience and should not create a situation, where all the cars are standing in line at the charging stations to get charged at the night.


Moreover, the government needs to come up with a clearer roadmap and should think of every segment as a different trajectory i.e. In EV’S adoption – 2-wheeler will have its own pace, while 3-wheeler will have its own and similarly the passenger vehicles.


In the end, we should make sure that the power required by these EV’S is not produced by coal, else we will end up creating the same amount of pollution or more without ever solving the problem which we wanted to solve at the first step.


(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)  

Prashant Agarwal

Prashant Agarwal is a business analyst. He writes on Finance, Social Entrepreneurship, Education and health-related Initiatives.
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