What Makes EVs The Right Choice For Future Mobility ?

Why is the central government promoting the adoption of electric mobility?

Electric vehicles promise zero tailpipe emissions and a reduction in air pollution in cities. The Indian government has created momentum through its Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles schemes that encourage, and in some segments mandates the adoption of electric vehicles (EV), with a goal of reaching 30% EV penetration by 2030. The scheme creates demand incentives for EV and urges the deployment of charging technologies and stations in urban centers. If these aims are realized by 2030, they will generate an estimated saving of up to 474 million tonnes of oil equivalent (Mtoe) and 846 million tonnes of net CO2 emissions over their lifetime. To scale the deployment of EVs, state government and local transport authorities are critical. To complement this central government thrust, 10 states and union territories have published draft or final policies aligned with the economic and demographic realities of each region.

The central government wants to reduce the import of crude oil significantly and thus help curb increasing levels of pollution. India has 22 of the world’s 30 most polluted cities. NITI Aayog, the government think tank tasked with devising a mass electric energy-based transport system in India, has devised a plan to stop the registration of internal combustion engine (ICE)-driven three-wheelers by 2023 and two-wheelers under 150cc by 2025. The central government has approved an outlay of ₹10,000 crores for three years till 2022 to subsidize electric vehicles and drive the adoption of electric mobility in the country. The central government initially wanted to stop the registration of electric vehicles by 2030, but later decided to put it on the back burner. Similarly, the central government didn’t want to offer subsidies to hybrid vehicles but then changed its stand following intense lobbying by Japanese vehicle manufacturers.

Various fiscal demand incentives have been put in place to spur the production and consumption of EVs and charging infrastructure — such as income tax rebates of up to INR 150,000 for customers on interest paid on loans to buy EVs. To scale the production of lithium-ion cell batteries, there will be an exemption from customs duties to bring down their cost. Assuming the appropriate infrastructure is in place, 90% of car owners in India are willing to switch to EVs, according to a survey by the Economic Times in May 2019. At present, however, EV market penetration is only 1% of total vehicle sales in India, and of that, 95% of sales are electric two-wheelers.

Bringing transportation decisions closer to the people is understandable and necessary. Transport challenges such as congestion, affordability, infrastructure, and transit systems availability are localized issues. Consumer preference for more expensive EV would highly depend on citizens’ income levels. Since investment in local research and development is necessary to bring prices down, it makes sense to leverage local universities and existing industrial hubs.

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