New Delhi: According to the World Health Organisation (WHO), out of the 20 most polluted cities in the world, 14 are in India. Cities like Kanpur, Delhi, Gurugram (Gurgaon), Varanasi, Patna, among others are making India one of the most polluted nations in the world. As per the Centre for Science and Environment (CSE), vehicular emission is one of the biggest reasons behind the toxic air quality of many cities in India. A study conducted by Energy Alternative India (EAI), a research firm based in Chennai, says that the Indian transport sector contributes about 13 per cent of total carbon emissions in the country. The study also says that this sector contributes over 60 per cent of the total air pollution of the country.
— World Bank (@WorldBank) March 13, 2019
As the central and state governments struggle to find a solution, deploying vehicles with less or no emissions is one of the ways to combat pollution, say experts on air pollution from CSE and Greenpeace India. Also, by 2030, India, a signatory in Paris Climate Agreement aims to reduce emissions by 33-35 per cent from 2005 levels. Along with this, the country also aims to increase electric power capacity from new and renewable sources to 40 per cent in the next 10 years.
Vehicular Exhaust Contains Following Toxic Gases:
Experts from around the world have acknowledged that Electric Vehicles (EVs) can prove to be a viable weapon in the fight against pollution as these cause zero tailpipe emission and will also benefit the environment if powered by renewable energy sources like solar and wind energy.
Status Of Electric Vehicles In India
According to Society of Manufacturers of the Electric Vehicles (SMEV), a network of Indian manufacturers of EVs and its components, about 1.2 lakh EV units (excluding the unregistered e-rickshaws) were sold in Financial Year (FY) 2018-19 which is double of the 56,000 units sold in 2017-18, and a big jump from mere 25,000 units sold in FY 2016-17. However, in the country which ranks fourth globally in automobile manufacturing, electric vehicles make less than one per cent share of the automobile market which comprised over 20 crore vehicles in 2018.
Of the total EVs sold, nearly 90 per cent were two-wheelers. On the other hand, electric cars and four-wheelers accounted for less than 10 per cent of the total sales, according to an estimate made by SMEV. A study conducted by the group projected that 6,878 were sold in Uttar Pradesh (UP) in 2017-18 which is an increase of more than 100 per cent from the sale of 2,467 in the FY 2016-17. Along with UP, higher EV sales were also recorded in Haryana with a sale of 6,307 units, 5,010 units were sold in Gujarat, followed by Maharashtra, West Bengal, Rajasthan, Tamil Nadu, Delhi, Kerala, and Andhra Pradesh.
SMEV predicts that more than 2.5 lakh EVs will be sold by the end of the Financial Year, 2019-2020. According to Sohinder Gill, CEO of Hero Electric and Director General of SMEV,
Traction has been observed in electric two-wheelers despite drawbacks like withdrawing of incentives on low-speed lead-acid powered electric two-wheelers since October 2018 (in order to encourage advanced technology lithium-ion battery vehicles, the central government stopped offering subsidy on lead acid vehicles which are comparatively more affordable compared to lithium-ion battery vehicles). It is expected that more than 2.5 lakh EVs will be sold by the end of this FY.
Globally, the stock of electric vehicles is increasing by more than one million units every year. The sale of EVs surpassed three million vehicles in 2017 after crossing the one million threshold in 2015 and two million mark in 2016, as per the Global EV Outlook, 2018. According to Narasimhan Santhanam, Director of EAI,
India is a global market leader in electric-rickshaws and other three-wheelers but needs to grow its market share for electric two-wheelers, cars, and buses.
He further says that in the short run, electric two-wheelers will become more popular in the automobile market and electric four-wheelers will be able to grab a big share of the market only in the long-run, when the ecosystem for EVs would have been created including a robust charging infrastructure. In the meantime, he says, the transition towards electric mobility will be taken up by four-wheelers used for commercial purposes like taxis, along with public transport like buses and shuttles.
Many state governments in India like Uttar Pradesh, Andhra Pradesh, Karnataka, Delhi, West Bengal, and Jammu and Kashmir have already started deploying electric buses in their public transport fleet and e-cars as part of government office fleet for their officials.
As shown in the table above, except for electric three-wheelers, India is yet to catch up with the world when it comes to electric vehicles. According to the players in EV industry, the biggest reason behind fewer sales is the higher cost of these vehicles compared to conventional vehicles, because of high cost of batteries. Lithium-ion, a chemical used for building cells for batteries is found in abundance in China, Chile, Brazil, and Australia. Thus, India needs to import these cells which increase the cost of the vehicles. As per experts, 40 per cent of the price of an EV is the cost of the battery itself. However, the government of India is taking measures to encourage indigenous manufacturing of batteries in order to bring the cost of EVs on par with conventional vehicles. Another major hurdle for EVs in India is the lack of charging infrastructure.
India’s EV Mission 2030: Government’s Push To Electric Vehicles Through Incentive
The government of India and the state governments have undertaken a number of electric vehicle-related policy initiatives over the past few years to encourage electric mobility in order to reduce the vehicular emissions and carbon footprints. In 2012, the central government announced the National Electric Mobility Mission Plan (NEMMP) to promote electric and hybrid vehicles in the country. Under NEMMP, the government launched an incentive scheme, Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME), in 2015 to reduce the purchase price of hybrid and electric vehicles by offering subsidies to the buyers and to stimulate the faster adoption of clean mobility. Since April 1, the subsidies are being provided according to the provisions of the second phase of FAME or FAME II. The government is providing a subsidy of Rs. 10,000 per kilowatt of the battery fitted in an electric two, three and four wheelers to the buyers. While FAME I, which ended on March 31, the subsidy offered to the buyers was flat Rs. 22,000.
In May 2017, the National Institution for Transforming India (NITI Ayog) drafted a vision for the transformation of mobility in the country, proposing a set of actions to accelerate India’s transition towards e-mobility. After this, in 2018, the central government announced a target of having at least 30 per cent of the total vehicles on road as electric by 2030. In the same year, to increase the market for EVs and to build an ecosystem for it, the central government mandated that at least 20 per cent of the fleet of all government offices and ministries will be electric. The total number of vehicles used by the government and its agencies is estimated to be more than five lakh, as per an official of the Ministry of Road and Transports.
In 2019, the government made a declaration of its commitment towards Mission 2030 for EVs by including EVs as one of the 10 guiding principles for the next 10 years mentioned by Piyush Goel, Interim Finance Minister while presenting the budget in February.
In a bid to improve the charging infrastructure in the country, in 2018, the government made installation of charging stations a license-free activity. Apart from making it license free, the has government also decided in to set up at least 27,000 EV charging stations by 2024 under FAME II and aims to build one EV charging point in every 3 km square area in the cities and one charging station at every 25 km stretch of major highways and intercity connecting roads by 2030.
Favourable Tax Regime For EVs But Not So Favourable For The EV Components
In order to encourage electric mobility, the government of India has adopted a favourable tax regime for EVs. Under the current Goods and Service Tax (GST) regime, EVs are taxed at 12 per cent while hybrid and fuel combustion vehicles are being taxed at 28 per cent. However the industry players like Ather Energy, Hero electric, and Jitendra EV advocate for a lower GST on all kinds of EVs to make these more affordable for an average middle-income buyer.
The GST on the components required to build EVs like batteries is levied at 18 per cent. Priyank Agarwal of Exicom, a Gurgaon based firm that makes batteries for EVs and provides charging solutions said,
Government has done a lot to give a push to electric mobility in India. But we think tax relief is extremely important for the component providers. We are currently paying 18 per cent GST on the battery that we sell to the vehicle manufacturer who pays 12 per cent GST on the battery fitted vehicle which he further sells to the customer. So there is a 6 per cent GST differential. If EVs are being encouraged by levying a 12 per cent GST then its components should also be charged at 12 per cent GST.
According to Energy Efficiency Services Limited (EESL), a Public Sector Undertaking (PSU), the battery takes up about 40 per cent of the cost of an EV. Thus to make battery cheaper, indigenous assembling of the battery pack needs to be encouraged for which the government has recently withdrawn the customs duty exemption to battery packs for EVs in a bid to discourage imports and drive domestic manufacturing. The government has lowered the import duty on other components like motor, rotator, brake system from 15-30 per cent to 10-15 per cent range.
Recently, the government has launched a Mission for transformative mobility under which it has decided to increase import duties on lithium-ion cells, batteries, and unassembled EV parts up to two times the current rate from April 2021 in order to encourage indigenous manufacturing of EVs.
To encourage adoption of electric vehicles further, in January, NITI Aayog CEO, Amitabh Kant recommended that there should be no road tax on electric vehicles to bring the ownership cost of electronic vehicles at par with combustion vehicles. Apart from the exemption on the road tax, Mr. Kant also recommends for exemption from parking charges and registration fees. According to a spokesperson of the Ministry of Heavy Industries and Public Eeterprises, the government is planning to impose a green cess on the polluting vehicles soon.
Energy Efficiency Services Limited (EESL): A Catalyst To Achieving India’s Mission EV Of 2030
EESL has been tasked by the government to implement the EV programme in the country and to facilitate the building of an ecosystem for EVs in India by promoting bulk procurements. The aim of bulk procurements is to escalate demand for EVs in the country. EESL initiated contracts to procure 10,000 electric vehicles in 2017 and issued a new tender for procuring another 10,000 electric cars by the end of 2019. The electric cars procured by EESL are Mahindra electric’s e-Verito and Tata Motors’s Tigor. These are being deployed as part of the government’s fleet for the commute of officials. EESL has also taken up the task of building charging infrastructure in partnership with battery and charger manufacturers like Exicom, and Fortum in the places where it will be deploying the cars procured by it. The new cars will gradually replace the entire fleet petrol and diesel cars used by the government and its agencies in the near future, as per SMEV.
Mighty impressed to see commitment to electric mobility in our Government. Drivers told me how now all cars here are electric and how they love them ! ???????? @NITIAayog ???????????????? #EESL pic.twitter.com/AGOqKqvt9k
— Vijay Shekhar Sharma (@vijayshekhar) March 20, 2019
While electric vehicles have not yet achieved the market share in a country that is driven majorly by petrol and diesel vehicles due to higher purchase costs, however, in the recent years, because of the ambitious plans and initiatives of the government, the electric vehicle market is gaining a gradual momentum in India, as per the estimates of EAI and SMEV. According to the spokesperson of EESL,
Although we are late as a nation to implement electric vehicles, we are on the right path. It will take time but we will be able to bridge the price gap between the electric vehicles and the combustion engine vehicles.
India’s Push To Go Electric
India’s Push To Go Electric
- How Is The Country Pushing For E-Mobility
- Things You Must Know About Electric Vehicles Before Buying One
- Five Start-Ups That Can Help You Switch To Clean Mobility From Your Polluting Vehicles
- Five Places Where Electric Vehicles Are Bringing Change
- How Is India Building Charging Infrastructure For Electric Vehicles
India’s Push To Go Electric is a special series by NDTV-Banega Swachh India team. Through a series of five articles, we aim to demystify the concept of electric mobility in India as it targets to achieve at least 30 per cent of vehicles on road to be electric by 2030. The series provides an overview of the current status of the electric vehicles sector in India and the challenges faced by it in terms of infrastructure and technology.
NDTV – Dettol Banega Swachh India campaign lends support to the Government of India’s Swachh Bharat Mission (SBM). Helmed by Campaign Ambassador Amitabh Bachchan, the campaign aims to spread awareness about hygiene and sanitation, the importance of building toilets and making India open defecation free (ODF) by October 2019, a target set by Prime Minister Narendra Modi, when he launched Swachh Bharat Abhiyan in 2014. Over the years, the campaign has widened its scope to cover issues like air pollution, waste management, plastic ban, manual scavenging and menstrual hygiene. The campaign has also focused extensively on marine pollution, clean Ganga Project and rejuvenation of Yamuna, two of India’s major river bodies.