The government plans to order commercial fleet owners, who operate cab services and delivery services, to transition to electric vehicles in a phased manner.
The Centre aims to enable taxi aggregators, such as Uber and Ola, which operate hundreds of cars in the nation, to turn 40% of their vehicle inventory into electric vehicles (EVs) by April 2026.
Companies that use two and three-wheelers for delivery and other commercial purposes will also have to transition to Electric Vehicles (EVs) by April 2023, which stands to directly impact companies like Swiggy, Zomato, and similar service providers.
The idea was reportedly discussed during a meeting held in Delhi in May.
According to Reuters, Uber and Olaboth backed by the Softbank Groupwould have to start altering their vehicles as early as next year to achieve electrification of their fleet of cars in a phased manner: 2.5% of their fleet of cars by 2021, 5% by 2022, 10% by 2023, and 40% percent by 2026.
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This will have a massive impact on the future of shared mobility and help reduce India’s oil imports and carbon footprint. This is a welcome step at a time when six of our cities rank the highest in terms of global vehicular and air pollution.
But there are some factors that need to be reviewed closely to ensure the targets set by the government are attained on time.
Challenges aplenty
The primary challenge for India pertains to the lack of infrastructure to support battery technology, and the minuscule percentage of EV sales compared to traditional cars.
In the most recent fiscal year, only 3,600 electric vehicles were sold in the country, compared to 3.3 million diesel and gasoline cars.
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Ola’s past attempts to add electric vehicles to their fleet saw little success due to the lack of infrastructure, high operating expenses, and maintenance required by electric vehicles. Charging stations across the country are not fully optimised and have long waiting times, its drivers reported.
Moreover, electric vehicles, despite the incentives and subsidies, are expensive compared to their traditional counterparts, and will cost upwards of the price-point that people are willing to pay.
Some elements that are used to create the batteries are not available abundantly in India and are imported, further increasing the final cost of EVs.
This problem is exacerbated by the fact that in India, a majority of the Uber and Ola vehicles are owned by the drivers themselves, who may not be able to afford these vehicles.
How can the government help?
Last year, Prime Minister Narendra Modi urged industrialists and automobile companies around the world to work with the government. He laid down the seven Cs to develop a new mobility ecosystem that is in true equilibrium with nature, and based on “common, connected, convenient, congestion-free, charged, clean, and cutting-edge” technology.
Also read: India makes a sudden U-turn on a separate policy for electric vehicles
With millennials opting for app-based ride-hailing services rather than purchasing personal cars, the passenger vehicle segment has been severely affected on a global scale. Vehicles are increasingly being sold for commercial purposes today.
The central government has, therefore, stepped up its efforts to achieve 30% e-mobility by 2030.
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At the meeting in May, NITI Aayog officials and the Ministries of Road Transport, Electricity, Renewable Energy, and Steel, as well as the Ministries of Heavy Industry and Trade, proposed that every new car sold for commercial purpose must be an EV from April 2026.
The Department of Heavy Industries recently invited proposals from state transport departments to fulfill the deployment of 5K electric buses.
According to Inc42, state governments are also taking several initiatives to boost e-mobility. Recently, Delhi’s AAP government announced it would incentivise the use of electric vehicles by various online consumer service companies such as Amazon, Zomato, LensKart, and Grofers for deliveries to consumers.
Also read: Ola will let riders be their own drivers
Manufacturers
There is no shortage of options for electric scooters in India. Hero Electric and Okinawa, two major electric scooter manufacturers already have a range of products in the market.
Two-wheeler startups like Twenty-Two Motors, Ather Energy, and the upcoming Revolt Intellicorp electric scooter, are also gaining popularity.
However, only a few manufacturers presently produce electric cars completely in India. The only three fully electric cars that are plying on Indian roads include TataTigor EV, Mahindra e2o Plus, and eVerito.
Indias largest car manufacturers Hyundai and Maruti Suzuki are scheduled to launch the Hyundai Kona EV in India on July 9, and Electric WagonR by 2020, respectively. Nonetheless, the cost factor remains.
Moreover, Uber has started cutting back on its Indian operations since the launch of its IPO.
The company currently does not have any electric vehicle programme in India, but it did announce a limited pilot project last month with the supplier of electric scooters Yulu.
On the other hand, Ola is leaving no stone unturned to stay ahead in the EV race. In its first-of-a-kind trial two years ago, Ola had piloted EVs in Nagpur; this initiative was not immediately successful.
The company initially raised $58 million in initial equity from third-party shareholders to evolve its electric car business, named Ola Electric Mobility.
This venture recently found support from investors like Ratan Tata and Arun Sarin, while reporting new investments and funding worth Rs 400 crore. In fact, it aims to introduce the electric version of Tata Nano, the world’s cheapest car, to its fleet.
The company aims to bring a million electric vehicles on Indian roads by 2022, and tackle charging infrastructure gaps with solutions like battery swapping stations. Recently, Ola raised additional funds of nearly $300 million, from Hyundai KIA to operate together to build bikes and electric vehicles.
Why this matters
China is currently the worlds biggest automobile market as well as the global leader in terms of electrification, setting aggressive targets for its vehicle manufacturers. The country is also offering benefits for taxi operators to have more clean fuel vehicles in their fleet.
Compared to EV sales in China which rose by 62% to 1.3 million in 2018, in India it tripled in FY2019, and yet accounted for only 0.1% of all vehicles bought.
Also read: Countries are declaring climate emergency, but are we ready to ditch fossil fuels?
The EV proposal comes weeks after the inter-ministerial committee recommended electrifying most motorbikes and scooters for private use, as well as all three-wheeled auto rickshaws within the next six to eight years.
New Delhi seeks to promote this new strategy to accelerate the sales of EVs that will serve as an important stepping stone towards fulfilling the pledge of reducing oil imports and pollution, as laid down by the Paris Climate Change Treaty in 2015.
Given the current geopolitical climate, electrification of vehicles will help India reduce its dependence on foreign oil, especially now that it faces a major oil shortage with the US curb on importing Iranian barrels.
With the future shinging bright for shared mobility, the move to upgrade to EVs makes perfect sense. Forcing ride-hailing services like Uber, Ola, and app-based delivery services to transition to electric vehicles is a very efficient approach in promoting EVs in India.
The push by the government will convert a large section of cars into electric vehicles, with a significant impact on how we will navigate in the future, provided all stakeholders approach the challenges, especially those related to costs, head-on.
Prarthana Mitra is a Staff Writer at Qrius