By Gurpreet Pannu
The electric vehicle (EV) market in India is in a very nascent stage. Yet, even with a market share of less than 1%, it grew rapidly at 37.5% for the year 2015-16. Under the vision stated by the National Electric Mobility Mission Plan (NEMMP) 2020 and Faster Adoption and Manufacturing of Electric Vehicles (FAME), India has set an ambitious target of selling 6 million electric vehicles by 2020. With 22,000 vehicles sold in the previous year, we are considerably lagging behind.
India has registered 125,000 electric vehicles. This results in fuel savings of 30,000 litres and CO2 emissions reduction of 76,883 kg per day. We are not much behind some of the fast-adopting European nations such as Norway, which has a combined fleet of 135,000 EV. The difference is in the fact that Norway has attained the figure of 1 electric car per 100 people. This is the highest market concentration in the world. We are a long way behind and the road is definitely arduous and long.
Different dimensions of the problem
The problem of under-adoption of electric vehicles in India has various attributes. Only two of the automotive companies manufacturing in India have dedicated electric vehicles division. These are Hero Electric and Mahindra Reva Electric Vehicles Ltd. Hero Electric primarily produces electric two-wheelers, whereas Mahindra Reva Electric Vehicles Ltd is the leader in the electric car market.
The government offers a price subsidy of INR 29,000 on electric two-wheelers and INR 150,000 on four-wheeler electric cars. Apart from this, the excise duty on EVs is half of that of other cars. Certain states such as Delhi, Rajasthan and Uttarakhand do not levy VAT on its purchase. Delhi even offers a further subsidy of 15% on the base price of select electric cars such as REVA. There is also an exemption from road tax and registration fees. The average car-buyer is unaware of these range of subsidies. Additionally, the high base price of the electric vehicles acts as a major deterrent to prospective purchase.
Role of the government
Apart from the general ignorance, the expenditure by government on infrastructure specific to EV is minuscule compared to the requirement to achieve its decadal goals. The government has allocated merely 20 Cr (2016-17) for the development of EV charging stations, which is grossly insufficient. The official number of charging stations in India is 3 with a total of 5 plugs. We can contrast this with Norway with just 10% more EV than India. Norway has 2041 charging stations with 9,000 plugs. The battery EV sold in India has a maximum range of 100-140 kilometres. Therefore, intermittent charging stations are crucial to make them a more viable option.
The government needs to expedite its infrastructure spending on charging station installations immediately to attain the NEMMP 2020 goals. Nitin Gadkari, current Minister for Road Transport and Highways and Shipping, has initiated a pilot project in Nagpur in February 2017. Under this project, EV will be used for public transport. This includes EV buses as well as taxis in partnership with cab-hailing firm Ola. Mr Gadkari has done away with all national permits requirement for public transport vehicles if EVs are used. Subsequently, he has urged all the states to follow suit. If this pilot project becomes successful, it could pave the way for cleaner and sustainable future city transport solutions.
Incentivising green choices
An EV over the same range of kilometres produces less than half the global-warming emissions of comparable gasoline powered vehicles. However, this is not sufficient to tackle the problem of greenhouse gas emissions effectively. We can have a considerable reduction in emissions from transport sector to meet our sustainable development goals only when the electricity used to power EVs comes from renewable sources. Since renewables have nearly zero marginal costs, this will also massively reduce the incremental costs upon the electricity transmission grids due to a wider adoption of EVs.
Massive increase in government spending and secondary infrastructure building are vital to the achievement of NEMMP 2020 goals. Also, there has to be immediate information dissemination to future car buyers to enable them to make greener choices. The policies are in place but the implementation is required to take the policies the extra mile.