In order to pave the way for a green future, small but stringent efforts are to be employed with amalgamated stakes to make it feasible
Overwhelmingly, India is aiming to make a swift shift towards electric mobility. The reason behind it is the alarming rise in atmospheric pollution levels. Standalone emissions from transport are estimated to increase 84 per cent by 2030. Disturbingly, the capital solely accounts for a population of 22 million inhabitants, which is about 12 times denser than New York. Consequently, the last several years have witnessed an incessant increase in the number of owned registered vehicles in the city. The same leaves a very minuscule scope for the usage of public transport like buses, metros, cabs, and autos. As the demand for non-commercial vehicular use increases, the per hectare vehicle density in the city is only anticipated to increase.
Ambitiously, the Government of India has mooted a roadmap for reduction of import of crude oil dependence to the tune of 10 per cent by 2021-22 and slicing off 33 to 35 per cent of the intensity of energy emissions by 2030 as per the Nationally Determined Contribution (NDC) targets agreed at COP21 in Paris. This can be achieved by increasing production of natural gas; promoting energy efficiency and conservation measures; giving thrust on demand substitution; capitalising untapped potential in biofuels and alternative fuels/renewables; and implementing measures for refinery process improvements (SIAM White Paper 2019). The government has even adopted several steps towards curbing pollution such as switching over to CNG transportation along with various policy initiatives like FAME I and now FAME II to substitute existing status quo with Electric Vehicles (EVs). Very recently, the government announced its desired intention to move to mandate mass adoption of electric two and three wheelers. Due to failed precedents, most of the affected auto makers have to face grave concerns due to the absence of thoughtful policy implementation by the government. So, there are still many questions. What has been done so far globally or nationally to incentivise citizens? And, is the existing push by the Indian government sufficient to adopt and do mass production of EVs? Is it a realistic approach or another added discontent and risk? What could be the possible challenges of benchmarking global economy for India? Let’s try and explore the above.
The adoption of EVs requires the willingness and commitment of producers, industrial partners, public authorities, government and consumers. Globally, nations are using multiple strategies to promote the adoption of EVs. For instance, in Norway, there is an exemption of several statutory tax reliefs in the form of registration tax, VAT, vehicle licence fees, road trolling charges, free parking on municipal parking and easy access to bus lanes. Other countries like UK, US, Sweden, France, and Canada have embraced relaxed statutory norms such as road tolls, point of sales incentives, declaration of tax credits, purchase incentives and higher fossil fuel-based energy sourcing. Some of the welcoming steps are undertaken in India too, like waiver of road tax and toll charges, income tax benefits, free parking and 50 per cent reduction in power tariffs. Additionally, very recently, the sale of EVs has been subsidised with a GST levy at five per cent instead of 18 per cent. However, the spare parts associated with the production need a careful exploration.
Here, the underlying question is the readiness of India in terms of infrastructure back-up (like charging stations) till the proposed year (2025) of transition to EV mode. For EV adoption at the mass level, there has to be a healthy grid infrastructure in rural India. Besides, India is not equipped and experienced enough to create a battery plant set-up to obtain economies of scale from the associated players. It seems that the target set by the government is highly ambitious, yet impractical in a way. Moreover, since the auto sector contributes to half the GDP, most of the spare parts of EVs are to be still imported from China and other neighbouring nations, only to strain Indian foreign reserves and greater dependence on imports. Indian citizens mainly focus on value for money which remains a dream with existing associated battery and maintenance costs. In the initial phase, the move has to be steady, since anything in haste would be deleterious to the initiative as a whole and further may cause displeasure among the users. Another drawback would be the speed dynamics of EVs in comparison to conventional vehicles. Needless to mention, India may have to incur a huge replacement cost of conventional vehicles.
Against this backdrop, it is quite relevant to evaluate the principal benefits of the transition to EVs. One of the recent reports has mentioned that India has the potential to shift to 100 per cent electric mode by the year 2025 that would, in turn, save 1 gigatonne of emissions. Further, it could minimise dependence on crude energy sources and hence could reduce the existing burden on foreign reserves. In a way, the evolution of an electric set-up may prove to be a business opportunity for charging station infrastructure operators. As per FAME II guidelines, both end-users and manufacturers may be rewarded in the form of zero road toll tax, subsidies in manufacturing, free municipal parking with supplementary purchase discounts and so on.
At the same time, it is quite relevant to note that sectoral transport carbon emission accounts for only 11 per cent in comparison to 47 per cent emissions from the power industry and 25 per cent from other industrial combination (IEA, 2018). With the higher demand of fuels in future, it is expected that the contribution could rise to 346 TMT by 2022 in a business-as-usual case, an increase of about 150 per cent. This can potentially result in an increased contribution to overall CO2 from the transport sector, which is around seven per cent against global averages of 20 per cent (SIAM White Paper 2019). This is in stark comparison with global sectoral composition, making transport the fifth largest of the total after emissions from land use changes (forestry). Does it pose a serious question? Is our targeting righteous to contain gross carbon emissions? Are we budging in the right direction or not?
Much said and done, the government’s foundation to ensure future electric mobility in the form of FAME I and FAME II policy guidelines cannot be questioned. Recently, the Central government has shown certain improvements along the same lines by way of declaring income tax reduction of up to Rs 1.5 lakh on the EV purchase loans along with various exemptions such as custom duty on EVs manufacturing. But a lot needs to be still covered.
Certainly, e-mobility can’t be considered an item of luxury but remains indispensable for our very survival in these toxic times. The only alternative left for us is to switch to green sources and transmission of energy in the near future. Additionally, India needs to involve a greater number of private players along with suitable related infrastructure. Surely, to encourage Indian manufacturers, new industries for batteries (used in EVs) would make India a globally competitive player, otherwise it could only adversely affect our export competitiveness. Especially for three-wheelers, CNG penetration could be increased and by the year 2030 the gasoline powered vehicles ought to be made exclusively compatible, depending upon the sustained availability of fuels. Further, second phase transformations could be by promoting the use of EVs by the cab-hailing services (Ola, Uber) and retail delivery chains (Swiggy, Zomato).
In order to pave the way for a green future, small but stringent efforts are to be employed with amalgamated stakes to make it feasible.
(The authors are Research Scholar, University of Delhi and Assistant Professor, Daulat Ram College for Women, University of Delhi)
