New Delhi: Environmentalists and auto industry executives are both wary of the Modi government’s recent push towards rapidly promoting electric vehicles. On Friday, transport minister Nitin Gadkari indicated that a cabinet note on electric cars was ready and warned the domestic auto industry that they either needed to go green or “get bulldozed”.
Although most stakeholders within the industry are supportive, they also fear that without adequate planning, a rapid shift towards green technology could lead to massive disruptions without tangible results.
Gadkari’s recent statements , made at the annual convention of Society of Indian Automobile Manufacturers (SIAM), that there was a need to “move towards alternate fuels” and that “the government has a crystal-clear policy to reduce imports and curb pollution” has consequently gotten a cautious response from both industry and environmentalists.
Incidentally, Gadkari’s exhortation comes on the heels of another call for a shift towards electric vehicles from Niti Aayog CEO Amitabh Kant who at the same meet had observed that it was easier for India to make the move since it had a lower per capita penetration of private vehicles. Doing some number crunching, he had pointed out that while India has a low per capita car ownership of 20 vehicles per 1,000 citizens, the number stands at 800 vehicles per 1,000 citizens in the US and 85 per 1,000 citizens in China.
Kant had, however, acknowledged that for large scale electric vehicle adoption challenges such indigenisation of battery production and creation of charging infrastructure would have to be first met.
When incentives went to the polluters
What is wrong with the government’s electric mobility policy? Anumita Roychowdhury, executive director (research and advocacy) at Centre for Science and Environment, which conducted the evaluation of the first phase of the policy for moving towards electric vehicles said the policy “initially actually promoted hybrids rather than electric mobility”.
Moreover, the evaluation, she said, had revealed that “60% of the incentives that were meant for the electric vehicles and the real hybrids had actually gone to diesel electric vehicles.”
Stating that “it was the wrong thing to do to pass them onto what were almost diesel cars,” Roychowdhury said the government had, however, amended the framework and then in March this year they disqualified the non-deserving beneficiaries.
Advising caution in dealing with the programme, she said “now we need an incentive programme with clear milestones and accountability. But for that we need to design the policy well for which we will have to prioritise. So we have to bring electric mobility into public transport system and para-transit to create a win-win situation.”
With the need of the hour being moving “beyond the intent to have a more enabling environment for its implementation”, she said that a clear roadmap is needed.
With batteries being at the core of electric vehicles, Roychowdhury also noted that while electric vehicles require a much bigger application of battery use and disposal structure, the current fleet of motor vehicles also have batteries and therefore in any case India needs a strong disposal system to avoid environmental consequences. “Other than that other approaches are also needed for use of the batteries like the kind of charging infrastructure, battery swapping strategy and disposal system,” she said.
Is this move planned or disruptive?
Considering several plans of the Modi government do not take off as desired despite their huge billing – as has been seen with demonetisation, smart cities and Swachh Bharat Abhiyan – the question arose if the shift to electric vehicles is also being pushed without adequate planning.
To this Roychowdhury responded saying that it is early days yet and what is needed first is a roadmap of the kind that was created 15 years ago to user in the use of compressed natural gas (CNG) for public transport.
“As for the electric vehicles,” she said, “what is encouraging is that the informal sector has already taken the lead through e-rickshaws and the like.”
Roychowdhury said the move shows right intent but now needs to be backed by right and consistent policy, enabling infrastructure and adherence to timelines. Earlier, she said, even the policy intent was not there.
With there being several key elements such as “the need to quickly move out of the conventional technology and go for the new paradigm of zero emission; and the need to look at alternative energy solutions as a means of also boosting energy security”, she said it is now time to roll out the infrastructure and the policies to enable that. “The next phase on the policy or the new policy should be looking at the rollout of the infrastructure so that we can scale up the electric vehicles programme.”
Make the most of economies of scale
“As with any new technology, be it in the renewable energy market or the electric vehicles market space,” she said, “initially the cost hurdles are there. But there is going to be a steep decline in the cost curves. So the sooner we would scale up, the economies of scale would come into play and it would becoming more enabling.”
From the industry too this issue of economies of scale was flagged by Sumit Sawhney, MD and CEO of Renault India, who was quoted as saying that: “Cost is high but it will come down to one-third or less in coming times. Over period of time with research, the cost will reduce. There is fast charging, 80 per cent of battery is charged in 20-30 minutes.”
He had also spoken about how a new ecosystem was needed to drive the change towards electric cars, noting that “once policy is defined…. research, cost and fast charging are three key factors in development of an electric car.”
Industry seeks definite roadmap
Several other industry leaders have demanded a stable policy regime and a definite roadmap as a pre-requisite to the move at the SIAM meet. Critical of the Centre’s recent move to bring an ordinance to amend the Goods and Services Tax (GST) (Compensation to States) Act, 2017 for increasing the cess on vehicles over 4 metres in length or over more than 1,500 cc engine capacity to 25% from the present 15%, they claimed that such moves are not good for the industry. Similarly, the industry cited the example of ban on sale of diesel vehicles in Delhi NCR, imposition of green cess on diesel vehicles, and transition from BS III to BS-1V emission norms from April as examples of a highhanded approach toward the sector.
While Tata Motors MD and CEO Guenter Butschek called for a “platform to ensure a well-orchestrated, collaborative and participative approach from the government for a policy framework”, Pawan Goenka, MD of Mahindra and Mahindra warned against any “sudden change”.
Impact on electricity demand
While in India, it is not immediately known what impact the policy may have on future electricity demand, a study conducted in the United Kingdom stated that a proposed complete shift to electric vehicles there by 2040 would add only 10% to the country’s power demand.
By that yardstick, in India the demand may be even lower considering the lower ownership of vehicles. However, this aspect is still some way off in India as the EV policy strives for having only electric vehicles on roads by 2032 and zero tail-pipe emissions by 2040. Read more
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