A new draft report by Indian government established policy think tank, Niti Aayog might be indicating towards a crucial change in India’s current mobility paradigm.
The report, Transformative Mobility Solutions for India, carries recommendations of how the Indian subcontinent should electrify all its vehicles by the end of year 2032. The soon to be released report, which has US-based consultancy Rocky Mountain Institute as its co-producer, lays down a 15-year plan to make achieve the 2032 target. In order to achieve the target, the report has broken down the action plan into three different phases, with the first one beginning in 2017 itself.
Along with suggesting an all-electric fleet on Indian roads by 2032, the report also suggests decreasing the taxes and interest rates for loans on electric vehicles. This could incentivise the Indian population to go for the electric cars over the conventional ones available in the market currently. If these suggestions made by Niti Aayog are successfully realised, it could mark a major change in India’s mobility scene.
According to the 90-page report charted out by the think tank, in order to electrify all of its vehicles by the end of year 2032, the government needs to start working on opening a battery plant by the end of next year and invest the money coming in from petrol and diesel tax revenues to set up charging stations for electric vehicles across the country.
One look at the draft report and one can sense a change in India’s focus from incentivising both electric cars and hybrid vehicles (cars that combine fossil fuel and electric power) to just electric cars.
With this move, India seems to be following the footsteps of China which had also launched an aggressive campaign last year to encourage people to adopt plug-in vehicles. The country introduced subsidies, rules discouraging fossil-fuel cars in big cities and research funding to make electric cara more better and modern.
A part of the draft version of the Niti Aayog report reads, “India’s potential to create a new mobility paradigm that is shared, electric and connected could have a significant impact domestically and globally.”
Earlier this month, we had reported how India’s power minister Piyush Goyal had announced that the government is aiming to have an all electric-car fleet on Indian roads by the year 2030. Speaking at the CII Annual Session 2017 held in New Delhi recently, he had said, “We are going to introduce electric vehicles in a very big way. We are going to make electric vehicles self- sufficient like Unnat Jyoti by Affordable LEDs for All (UJALA). The idea is that by 2030, not a single petrol or diesel car should be sold in the country.”
According to experts, India’s decision to change its focus from both hybrid and electric cars to just electric cars could be encouraged by the commitment the country made to the Paris climate treaty wherein it has to cut down on its oil imports to 50 per cent by 2030 and significantly reduce emissions.
While the sudden change in policy focus might be future forward and environmentally conscious, but it has definitely got the car-manufacturers in the country extremely worried. According to some Niti Aayog officials, the blueprint charted out by the report does present some major challenges as high battery costs will spiral up car prices and an unavailability of significant number of charging stations and other infrastructure needed for electric cars would result in car manufacturers, who were consulted on the proposals ahead of its publication, could hesitate a little in making the necessary investment in the technology. This could prove to be a major bump in the road for faster adoption of electric vehicles in the country as in order for this disruption of the Indian auto sector to occur, it requires some plump investments to come its way.
It is interesting to note that in 2015, the Indian government had launched a scheme called Faster Adoption and Manufacturing of Hybrid and Electric Vehicles aimed at encouraging people to sign up for clean fuel technology cars by offering them incentives. The scheme aimed to boost the sales of such vehicles by up to a whopping 7 million vehicles by the year 2020. While the paper sounded good on paper and offered the public incentives as high as Rs 1,40,000 rupees on some models, the scheme has failed to make a significant impact as the sale of electric and hybrid cars formed just a little fraction of the big 3 million passenger vehicles that were sold in India in 2016.
The scheme, which expired on March 31 this year, has now been extended for another six months period, as a new future policy around the same is being deliberated.
According to the new Niti Aayog report, the country now needs to get into a full force mode and procure bulk electric vehicles and build standardised, swappable batteries for two- and three-wheelers that could help in significantly cutting down their costs. It also suggest having reasonable tariff structures for charging of these electric cars.
I guess, it is now time for us to prepare for India’s new mobility paradigm.