Electric Mobility In India

2023 NOV 29

Mains   > Economic Development   >   Indian Economy and issues   >   Urban transportation

Syllabus: >GS 3> Economic Development   >   Indian Economy and issues   >  Urban transportation

REFERENCE NEWS:

  • According to a recent report by credit ratings agency ICRA, the electrification of India’s bus fleet is expected to ramp up significantly in the coming years, with 11–13% of all new bus sales expected to be electric by the financial year ending March 2025.
  • Also, there are reports that India is closing in on an agreement with Tesla Inc. that would allow the US automaker to ship its electric cars to the country starting next year and set up a factory within two years.

BACKGROUND:

  • In 2021, the Minister of Road Transport and Highways (MoRTH), announced the government's target to achieve a 30% sales penetration of electric vehicles (EVs) for private cars, 70% for commercial vehicles, and 80% for two and three-wheelers by 2030.
  • Manufacturing and putting the electric cars on road is the vision to make India pollution free along with saving billions of dollars in fuel cost and creating new job opportunities.

WHAT ARE ELECTRIC VEHICLES?

  • Electric vehicles are powered by one or more electric motors, using electricity stored in batteries, rather than internal combustion engines like petrol and diesel vehicles.
  • There are different types of electric vehicles. It includes fully electric vehicles and hybrid electric vehicles (Electric Motor + Combustion Engine).

SIGNIFICANCE OF ELECTRIC VEHICLES:

  • Mitigating Climate Change:
    • India ranks seventh among countries most affected in 2019 by climate change, according to the Global Climate Risk Index, 2021.
    • This makes it all the more reason for India to make electric cars and vehicles a priority in the fight against the reliance on fossil fuels.
  • Controlling air and noise pollution:
    • Vehicles with Internal combustion (IC) engines cause half of the pollution in the cities as they emit harmful gases like Carbon Monoxide, Nitrogen Oxides >> this leads to air pollution
    • IC engines also cause noise pollution in cities.
    • On the other hand, Electric Vehicles are 100% environment-friendly as they do not emit toxic gases or smoke in the environment
    • Therefore EVs will help India in its commitment to the Paris Climate Agreement.
  • Health:
    • The air pollution induces deadly diseases particularly for elderly people, pregnant women, and children. This can be reduced by promoting EVs.
  • Economy:
    • Reduce oil imports:
  • India ranks as the third-largest crude oil importer in the world as of 2023, following the United States and China.
  • Most of the consumption of oil is in the transport sector.
  • Therefore, electric vehicles can significantly reduce India’s oil imports and reduce current account deficits.
  • Cost-effective:
  • With the advent of advanced technology and dedicated R&D, the cost and maintenance of electric vehicles have gone down.
  • The government is also incentivizing the use of electric vehicles by providing subsidies and lower motor taxes on EVs.
  • Global competitiveness:
    • Tesla's potential entry into India, Toyota's Flexi-Fuel vehicle project, and Ola Electric's expansion into four-wheeler EVs are poised to enhance India's auto sector with advanced technologies. These developments are expected to boost India's global competitiveness in automobile manufacturing.
  • Less maintenance:
  • Less fluids (for oil and transmission) to change + Less Moving Parts in EVs = Less Maintenance.

DEMERITS OF ELECTRIC VEHICLES:

  • Range Anxiety:
    • Range anxiety in EVs arises from their limited mileage, long recharge times, and the scarcity of quick charging stations, causing worry about running out of battery before reaching the destination.
  • Less Power:
    • The top speed of electric cars is at 70 mph (even less for smaller electric vehicles) which makes them a poor bet with highway driving.
  • Costly:
    • Electric vehicles are costlier than gasoline-powered vehicles within the same range due to the hefty price of the lithium-ion batteries.
    • Moreover, the insurance cost will be estimated to be higher for electric vehicles than conventional ones due to the danger of running out of power in a bad spot, its higher cost, and the dangers associated with electricity. 
    • Lastly, maintenance costs as a result of new technology and developing skills make electric cars even more costly.
  • A small amount of pollution:
    • Even though electric vehicles are classified as green cars, the toxicity of batteries is high and not all electricity is derived from renewable energy sources.

 CHALLENGES FOR INDIA IN IMPLEMENTING ELECTRIC MOBILITY:

  • Market Penetration:
    • Currently, the Indian electric vehicles’ market penetration is one of the lowest in the world. For instance, EVs make up only about 2% of total automobile sales in India in 2022.
  • Building charging infrastructure:
    • A big challenge is the development of charging infrastructure which will need to be combined with existing refuelling stations and at alternative locations closer to homes.
  • Limited grid capacity:
    • According to a Niti Aayog report, India’s EVs market needs a minimum of 10 GW of cells by 2022, which would need to be expanded to about 50 GW by 2025.
    • However, currently, India is able to add only 20 GW every year to its grid for all of our other increasing energy needs
  • Lack of battery cell manufacturing:
    • There is a complete absence of primary battery cell manufacturing in India which poses the risk of increasing trade deficit.
    • At the moment, most manufacturers rely on batteries imported from Japan, China, Korea and Europe.
    • India's latest discovery puts its lithium reserves among the world's largest, but it is uncertain whether they can be profitably mined.
  • Policy issues:
    • In India, the electric vehicle (EV) sector faces significant challenges due to policy inconsistencies, including varying state-level subsidies and incentives, frequent changes in GST and taxation policies, and uneven implementation of infrastructure development and manufacturing policies. This lack of uniformity across different regions and aspects of the EV ecosystem hampers the sector's growth and adoption rates.

GOVERNMENT INITIATIVES:

  • The National Electric Mobility Mission Plan (NEMMP) 2013:
    • It seeks to achieve national fuel security by promoting hybrid and electric vehicles in the country. It sets an ambitious target to achieve 6-7 million sales of hybrid and electric vehicles every year from 2020 onwards.
    • The government has also announced the scheme named Faster Adoption and Manufacturing of (Hybrid&) Electric Vehicles (FAME India) under NEMMP
  • Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME India)
    • The scheme was launched in 2015 and presently, Phase-II of FAME India Scheme is being implemented. It aims to promote early adoption and market creation of both hybrid and electric vehicles in the country through upfront incentive on the purchase of electric vehicles and also by way of establishing a necessary charging Infrastructure for electric vehicles.
  • PM-eBus Sewa:
    • The Cabinet approved “PM-eBus Sewa” for augmenting city bus operations, with priority given to cities without organised bus service. 10,000 e-Buses are to be deployed on the PPP model in 169 cities.
  • Production Linked Incentive (PLI) scheme:
    • To boost domestic manufacturing and attract global companies to invest in the Indian EV market?.
  • Other initiatives:
    • Taxation:
  • Indirect tax: GST on electric vehicles has been reduced from 12% to 5%; GST on chargers/ charging stations for electric vehicles has been reduced from 18% to 5%.
  • Direct taxation: The government has extended an additional income tax deduction of Rs 1.5 Lakh on interest paid on loans to the buyers of Electric Vehicle.
  • For charging infrastructure:
  • Made-in-India EV charging standard:
    • Recently, the Bureau of Indian Standards (BIS) has approved an indigenously developed AC and DC combined charging connector standard for light electric vehicles (LEVs) such as scooters, bikes, and rickshaws.
  • Ministry of Power has allowed the sale of electricity as ‘service’ for the charging of electric vehicles. This would serve as an incentive to attract investments into the charging infrastructure.
  • Green number plate:
  • MoRTH has issued a notification for the Green Number plate for the use of Electric Vehicles.
  • Battery swapping policy:
    • The NITI Aayog proposed a battery swapping policy for electric vehicles to address urban space constraints and reduce vehicle costs.

EV30@30 campaign:

  • The EV30@30 campaign is a global initiative focused on accelerating electric vehicle (EV) deployment, aiming for at least 30% new EV sales by 2030.
  • India is part of a handful of countries that support the campaign.

WAY FORWARD:

  • Increasing R&D in EVs:
    • Creating a vibrant battery research and development ecosystem domestically to develop alternative technologies containing minerals with low supply risks and battery recycling techniques to recover the raw materials in the batteries.
  • Increase demand:
    • More focus should be given towards the creation of demand by making it easy and cheap for consumers to switch to electric vehicles.
  • Rationalize subsidies:
    • The focus should also shift from subsidising vehicles to subsidizing batteries as batteries take up 50% of EV costs.
    • And more incentives should be given for electric two-wheelers and three-wheeler segments than four-wheelers.
  • Retrofitting:
    • Retrofitting (addition of a new component/technology) existing small vehicles can be considered for a nominal cost for consumers.
    • Example: CNG fleet of Delhi’s auto-rickshaws can be turned into an all-electric/hybrid fleet at a very low cost to owners. But it will require some innovative finance on the part of the government.
  • Sensitizing public:
    • Breaking away the old norms and establishing a new consumer behaviour is always a challenge.Thus, a lot of sensitisation and education is needed, in order to bust several myths and promote EVs within the Indian market.
  • Raw material:
    • Acquiring lithium fields in Bolivia, Australia and Chile could become as important as buying oil fields since India needs raw material to manufacture batteries for EVs.
    • India could also diversify the supply risk by including lithium in existing Preferential Trade Agreements (PTAs) or creating new PTAs with other lithium producing countries.
  • Charging points:
    • A wide network of charging stations is required for attracting investments.Tech Parks, public bus depots and Multiplexes are some of the potential places to install charging points.
    • Corporates shall invest in charging infrastructure under Corporate Social Responsibility (CSR).
  • Address the technical concerns:
    • Address the technical concerns such as AC versus DC charging stations, handling of peak demand, grid stability, etc. should be addressed promptly.
  • Financial incentives:
    • Government should provide a waiver of road tax and registration fees, GST refunds and free parking spaces for EVs.

PRACTICE QUESTION:

Q. Examine the significance and challenges associated with electric mobility in India. Also, discuss how to drive the growth of electric vehicles in India.(15 marks, 250 words)