Driving India to the Fore: Electric Transportation

India is charged to become a global hotspot for electric mobility. Electricity is a domestically produced fuel that can transform the transportation sector using electricity grid infrastructure. The technology exists to promote transportation applications that move both people and goods using electricity as a fuel. As cities and communities seek smart, sustainable mobility solutions, electric transportation becomes a significant component. This new generation of electric transportation will help the nation enter an era of clean transportation. It will curb pollution and reduce reliance on import dependent fossil fuels. The economy will thrive as it will create a diverse set of entrepreneurial opportunities and augments advanced skills and jobs. India is in a unique position to leverage electric mobility by  leapfrogging the historical evolution of personal mobility and finding synergy with strategic imperatives for energy security, renewable production and urban decongestion. Electric mobility holds tremendous promise for India. However, this transition to e-mobility is a typical “wicked policy” problem wherein there are many actors and a great degree of complexity in the arena of e-mobility.

Policy

India has announced a plethora of electric mobility policies and regulatory measures, including an allotment of INR 10,000 crore for faster adoption and manufacture of electric vehicles (EV) across the country. 10 States and Union Territories (UT) have published draft EV policies or notified final policies detailing fiscal, non-fiscal and other incentives to accelerate a value chain of electric mobility activities.

Government of Andhra Pradesh has introduced Andhra Pradesh Electric Mobility Policy 2018-2023 to encourage and support electric mobility in the State. Andhra Pradesh has set an ambitious target to be the best Indian State in EV by 2029. The State aims to have 1,000,000 EVs on the road by 2024. The policy focuses on the production, services and customer sides of the EV value chain and infrastructure value chain. Bihar Electric Vehicle Policy 2019 is aimed at creation of manufacturing eco-system for e-vehicles in the State, fulfil sustainable development goals in the transport system and make Bihar the most preferred investment destination for EV sector. Mission of the State policy, inter alia, is to supplement the Government of India (GoI) in its mission to bring 100% e-mobility by 2030. Delhi Electric Vehicle Policy 2018 has a number of provisions to reduce air pollution. It has included pollution cess, an air quality parking surcharge and an environment compensation charge for existing petrol/diesel vehicles. It also provides scrappage and deregistration incentives for a few internal combustion engine (ICE) vehicle categories that will be applicable if someone buys an EV in the same financial year. Two-wheelers (2Ws), three-wheelers (3Ws), public transport buses and taxi fleets shall be prioritised, and will benefit from a governmental push in the form of a purchase incentive. Delhi plans to add 50% e-buses to public transport by 2023. Karnataka was the first State in India to release its own EV policy, titled “Karnataka Electric Vehicle and Storage Policy 2017”. The policy kicked into force on 25-11-2017 for 5 years. Karnataka aspires to be the electric vehicle capital of India. The State sees the EV sector as an employment opportunity and wants to create a conducive environment for transitioning from ICE vehicles to EVs. To encourage local manufacturing, the State is planning to provide a special package of incentives and concessions for ultra mega and super mega EV enterprises. The State will reimburse 100% of land conversion fees for converting land from agricultural to industrial use for setting up EV/component manufacturing units. Kerala aspires to promote eco-friendly tourism. Localised manufacturing within the State will focus on complete vehicle, electric drivetrain, power electronics, energy systems and storage and will provide viability gap funding for e-buses and government fleets. One aim of EV policy is to procure 6000 electric buses for the State Road Transport Corporation by 2025. Maharashtra policy does not distinguish between private and commercial vehicles in the categories of 2Ws, 3Ws and 4Ws. The State has mandated that planning authorities and electricity supply agencies should provide approvals for setting up of charging stations as a priority. The policy specifies 25% capital subsidy (with a few caps) for commercial public charging stations. The EV policy of Telangana emphasises the promotion of skills development and innovation in e-mobility. Self-certification shall be a part of single-window clearance. The State has prioritised the vehicle segment for EV transition: cabs, public transport and institutional transport as well as freight, logistics firms, delivery services, intra-city goods delivery, etc. Tamil Nadu aims to partner with the public and private sectors to set up charging stations. Uttarakhand has outlined its intention to promote clean fuels as an alternative to battery-operated EVs, especially in the transition period. Develop a battery disposal strategy and offer incentives for companies engaged in battery disposal to minimise negative environmental impact. Uttar Pradesh is adopting single window system in place for all approvals required for EV and battery manufacturing units along with EV testing centres with 24/7 power back-up accessible to manufacturers and service providers. The effective implementation shall be directly monitored by the chief minister’s office.

Role of Government

The role of Government is important in accelerating adoption, diffusion and deployment of electric mobility. Government of India approved the National Mission on Electric Mobility in 2011 and subsequently National Electric Mobility Mission Plan (Nemmp), 2020 was unveiled in 2013 with the purpose to address the issue of energy security, vehicular emission and domestic manufacturing EVs and it targets seven million electric and hybrid vehicles by 2020. As part of the mission, Department of Heavy Industry (DHI) has formulated a scheme, namely, FAME India [Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles in India] for implementation with effect from 1-4-2015, with the objective to support hybrid/electric vehicles market development and phased manufacturing programme. The amendment in building bye-laws is proposed to set up charging infrastructure by the Ministry of Housing and Urban Affairs and the public charging station guidelines by the Ministry of Power. Ministry of Road Transport and Highways has issued Notification No. GSR 643(E) dated 19-8-2015 vide which the mass emission standards for Bharat Stage Emission Standards (BSES) IV shall come in to force all over the country in respect of four-wheeled vehicles manufactured on or after the 1-4-2017. The Government has agreed upon the auto fuel policy for implementation BS V and BS VI emission norms across the country by 2020 and 2024 respectively.

The Transformative Mobility Mission for India by NITI Aayog and the Nemmp 2020 has laid down the principles and strategies for the transition to e-mobility. The NITI Aayog has proposed that only electric vehicles should be sold in India by 2030. The Commission has also proposed piloting an e-highway programme with an overhead electric network to enable trucks and buses to ply on select national highways. The proposal also includes a plan to manufacture 50 gigawatt hour (GWh) batteries by 2030. The object is to initially work upon 80 per cent of components of two and three-wheelers and buses and also push manufacturing of batteries. The Government think tank believes that such a move will expand India’s clean fuel vision. Investments in zero emission technology will enable local manufacturers to gain global leadership in the e-mobility space .

Overall, the Government endeavours outline strategies for demand creation, technology development, robust charging infrastructure and pilot projects. So that Indian automotive industry will be among the top three of the world in engineering, manufacture and export of vehicles and components, and will encompass safe, efficient and environment-friendly conditions for affordable mobility of people and transportation of goods in India comparable with global standards growing in value to over 12% of India’s GDP and generating an additional 65 million jobs. India aims to become a 100% EV nation by 2030.

Challenges

Despite various policy incentives and non-fiscal measures taken by Government, numerous barriers prevent widespread adoption of EVs. There are various constrains related to these vehicles. The uptake of electric vehicles is slow because the vehicles are costly — not only upfront but also on a life cycle cost basis, or in other words, total cost of ownership (TCO). The high purchase cost of the EVs is the biggest hindrance in the way of adoption of these vehicles. EVs are comparative new. Most of the EVs at present are imported or partially imported and then assembled, which makes it quite costly due to different type of taxes levied on these. As this technology is comparatively new for India, there has not been much choice of vehicle models.  The technology is not proven which is somewhere stopping the users to go for electric vehicles as they opt for conventional vehicles. Travel range is limited. The payback over the lifetime of the EV is inversely correlated with the Vehicle Kilometers Travelled (VKT). Incentives provided for purchase of EVs are lower in comparison to other countries. Life cycle cost of batteries is still not measurable; the economic viability of total life cycle cost of EVs is yet to be ascertained and determined. The overall performance of these vehicles and safety, working limit of battery and its charging is the major hindrance in the way of adoption of such vehicles.

Partakers

All stakeholders—including electric companies, automakers, charging network providers, transit agencies, large commercial customers, transportation planners and others — will help drive transportation electrification. Electric companies have to invest in smart grid technologies that provide the capability to manage EV charging in a manner that benefits the energy grid and for electric transportation. Deliver the solutions to customers who have adopted EVs, and also providing charging infrastructure in homes, workplaces, and public places.

Manufacturers have joined in by launching diversified products in various categories: rickshaws, 2Ws, 3Ws, passenger vehicles, buses and power trains. Fuelled by the national agenda of electrification and bolstered by government-led initiatives, the public and private sectors alike have commenced their transitions to electric mobility. Startups are developing viable products for battery technologies, charging infrastructure and more.

Way Ahead

India needs to make a transition to EV, as  internal combustion electric vehicle (ICEV) is one of the significant sources of air pollution and Indian cities already have alarming Air Quality Index (AQI) levels. India is obliged to reduce its global emissions, owing to the Paris Climate Agreement as signed in 2016. Expanding the use of electricity in transportation shall save money, improve the environment, and enhance the quality of life for everyone. The rules and directives for local parking standards for charging station accessibility, limited access to urban areas or roads has to be designed. Purchase grants, tax benefits for consumers of EVs, government funding for battery research, subsidies on home chargers or free electricity for public charging shall encourage demand. Communication of persuasion, education and government information campaigns can influence the value chain of e-mobility. Actions by Government that provides the physical ability to act directly, using its own forces to achieve policy goals including the allocation of means, capital, resources and the physical infrastructure and acting as a launching customer, buying own fleet of EVs, Government installing public chargers, etc. has to be endeavoured as an organisational need. In addition to EVs, electrification must take hold in public transit, delivery vehicles, ridesharing applications, ports and airports, and more. For a price-sensitive market of India, developing incentives for electric (clean) kilometers run versus electric vehicles purchased shall make economic sense. The downstream fiscal and non-fiscal incentives sunset, long-term investment in R&D will create sustained growth. India has a significant potential to become one of the largest EV markets in the world.

Harsha Rajwanshi is Assistant Professor of Law, Dean, External Relations and Centre Director, Gujarat National Law University & Faculty Advisor to GUVNL-GNLU Research Fellowship  on Energy Law and Policy.