January 24, 2018
Purchase of EVs by Government agencies will drive EV sales in the national passenger car market and come as part of an strategy to convert all national passenger vehicles to electric in future
Making India’s passenger mobility shared, electric, and connected can cut the national energy consumption by 64 per cent while reducing carbon emissions by 37 per cent by 2030
EV will augment indigenous manufacturing as well as technology innovation through the Government’s initiatives such as as Make in India, Skill India, Startup India and Digital India
Tata Motors and Mahindra have agreed to deliver around 350 vehicles and 150 vehicles, respectively, in the first phase of converting 55,000 Government vehicles over three-six years
The electric vehicle (EV) market will expand rapidly in 2018, backed by big acquisitions of the Indian Government. State-run Energy Efficiency Services Ltd (EESL), which is leading the country’s EV action plan, has placed orders for around 20,000 passenger EVs to replace the Government’s fleet of official vehicles. This development, which will drive EV sales in the passenger car market, comes as part of the Indian Government’s initiative to convert all national passenger vehicles to electric in future. To further aid the industry, the Government has laid down a detailed agenda to empower EV technology in India.
The National Institution for Transforming India (NITI Aayog), the Indian government’s policy think tank, is responsible for framing, and rolling out, EV-related policies in the country.The policies will concern incentives for green vehicles such as free parking for a limited timespan and waive-off of toll charges along with separate identification of zero-emission vehicles in form of green number plates, among other related factors.The policies will, in turn, be enforced by the government’s various ministries and departments, thus bringing a parity among the different Government entities in terms of EV policy implementation.
In May 2017, Niti Ayog along with Rocky Mountain Institute, a USA-based researcher, had published a detailed report that studied the scope of EV in India. Subsequently, discussions were conducted with around 75 leaders from Government, the private sector, and civil society to collectively identify solutions for India’s future mobility system. The report, titled “India Leaps Ahead: Transformative Mobility Solutions for All”, discussed three main purposes: Establishing a vision for India’s future mobility system; Detailing a set of near-term solutions to capture the vision; Proposing a model to support rapid scaling and deployment of the vision and initiatives already underway.
India’s EV action plan divides related initiatives under: Governance; Policies and incentives; Infrastructure; Business models; and Data access. Starting 2017, the plan aims to convert the nation’s entire passenger vehicle fleet to the electric platform in three phases over 15 years. Under the plan, EESL aims to float a tender of around 10,000 EVs before the end of 2017-18, to be followed by a proposal of another 10,000 EVs. This comes in close succession to a tender of 10,000 vehicles in September 2017.At the time, Tata Motors Ltd and Mahindra and Mahindra Ltd agreed to deliver around 350 vehicles and 150 vehicles, respectively, in the first phase.
The orders are aimed at replacing the Government’s fleet of around 550,000 vehicles, about 30% of which are leased, over a period of three to six years. While electric technology has steadily spread in the small commercial vehicle segment , it is yet to gain traction in the four-wheel market. Hence the government’s EV purchase may lead to a sales spike in the national EV sector. This will help achieve the Government’s goal of launching about 6-7 million electric/hybrid vehicles by 2020, on way to realising the all-electric goal. This movement will help India meet its environmental goals while reducing the increasing costs related to fuel imports.
Making India’s passenger mobility shared, electric, and connected can cut the national fuel demand by 64 per cent while reducing carbon emissions by 37 per cent by 2030. This would result in a reduction of around 156 million tonnes of oil equivalent in diesel and petrol consumption for that year. At crude price of US$52/barrel, this would imply net national savings of more than US$60 billion. The electric mobility revolution will also augment indigenous manufacturing activities as well as technology innovation through the Government’s initiatives such as as Make in India, Skill India, Startup India and Digital India.
For instance, Bengaluru-based Ather Energy Pvt Ltd is developing an e-bike, while Ola, a ride integrator, has tied up with the Government and Mahindra Electric Mobility to launch an shared EV fleet as a pilot project. JSW Group, a steel manufacturer and heavy engineering group, has announced an US$620-million integrated EV solution. Meanwhile, Government’s proactive initiatives, as well as India’s vast market potential, has attracted foreign investors. EV industry will require considerable investment and new technologies. As the government’s induction of EVs picks up, expansion of support infrastructure and increased public sales will also witness increasing foreign interest.
The Government is planning a combined task force comprising civil society, Government and private sector to strengthen the industry. This will be bolstered by the Government’s Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, which in turn is backed by the Centre’s Green Mobility Fund and Smart Cities Mission initiatives. Relevant departments are working on simplifying policies and regulations related to approval of foreign investment and collaborations in the EV sector.