Monday, July 29, 2019

Promoting Electric Vehicles — Are We Doing Enough?

by Rajesh K P,

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India is home to 14 of the 20 most polluted cities in the world, and given the role of pollution caused by vehicles, there is a greater emphasis on moving to green energy sources. Electric vehicles are seen as a sustainable alternative to the traditional vehicles which rely on fossil fuels. Indian policy on electric vehicles targets the introduction of such vehicles in most commonly used means of transportation. Based on 2016 data, 79 per cent of vehicles on Indian roads are two wheelers (NITI Aayog 2018). Three wheelers, trucks and buses take up another 7 per cent. Most of the advanced technologies in electric vehicles are available in premium cars segment (cars priced over `10 lakhs and above), which is only 2 per cent of the total vehicle population. India’s Electric Vehicle policy aims at developing technology to suit two-wheeler and three-wheeler segments, which addresses a significant portion of India’s transportation needs, so that India could play the role of technology leader in this segment as well as reduce its own emission levels. Government has launched a scheme called FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) which promotes purchase of electric vehicles by providing incentives. There is also a proposed import duty on electric vehicles to promote manufacturing these under the “Make in India” programme. There is also a plan to improve the charging infrastructure across the country, the target of that being a charging station every 25 kms.

Kerala’s electric vehicle policy also aims at providing shared transportation and clean mobility. Kerala State Road Transport Corporation(KSRTC) will start employing electric vehicles in a move to save operational cost besides reducing emissions. There is also a goal of achieving manufacturing capability within the state especially in this segment and a plan of moving the entire fleet of KSRTC to Electric Vehicles by 2025 (Government of Kerala 2017). State is targeting to adopt battery packs that could last 50 kms and is also looking at adopting ‘docker’ charging setup which would recharge the battery automatically, every time a bus returns to the bus station.The state is targeting to have a million electric vehicles by 2022 and is aiming to have a pilot fleet of 200,000 two wheelers by end of 2020. Kerala’s policy also looks at developing centres of excellence in the state which would work on developing technology to cater to the local demands as well as global ones. State is trying to use its startup ecosystem to further boost the skill development. KSRTC has already started the service of electric vehicles on a trial basis as of now. 

National budget for the year 2019–20 comes up with multiple proposals to promote usage of electric vehicles. True to the ‘nudge’ aspect mentioned in economic survey, budget proposes a tax exemption of 1.5 lakhs for individuals on purchasing electric vehicles. This might potentially nullify the emphasis on using public transport. However, the idea of switching over to renewable energy sources is a welcome move. One of the major concerns India has with respect to electric vehicle mobility is the charging infrastructure. Green Energy Corridor scheme is aiming to provide this infrastructure. This scheme was launched by the Ministry of New and Renewable Energy in 2015. Budgetary allocation for this scheme has remained static at `500 crore and given the targets we are trying to achieve, this may not be adequate (CBGA 2019).

Manufacturing electric vehicles was given a push through incentives and subsidies under FAME India. Current market share of electric car stands at 0.06 percentage of the total and this indicates that the scheme has not had the success we expected it to have. Once we move our road transport to predominantly electric vehicles, we should also ensure that adequate amount of power is generated via renewable sources. However, the share of renewables in power generation stands at 7.8 per cent, which is another cause for concern (CBGA 2019). A long-term policy in this regard should be more holistic in its approach. We should put more emphasis on power generation and distribution to ensure mobility, otherwise the nudge for buying electric vehicles need not have the expected impact.

(Rajesh K P is Research Intern at Centre for Public Policy Research. Views expressed by the author is personal and need not reflect or represent the views of Centre for Public Policy Research)

NITI Aayog. 2018. “Zero Emission Vehicles.”
Government of Kerala. 2017. Policy on Electric Mobility. Policy Draft, Thiruvananthapuram: Government of Kerala.
CBGA (Centre for Budget and Governance Accountability). 2019. Promises and Priorities An Analysis of Union Budget 2019-20. New Delhi: Centre for Budget and Governance Accountability.

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