Niti Aayog recommends carrot and stick policy for EV push
In a game-changing move for India’s mobility, energy and environment needs, Niti Aayog has recommended fiscal incentives for electric vehicle (EV) manufacturers and discouraging privately-owned petrol- as well as diesel-fuelled vehicles.
The other key recommendations made by Niti Aayog and Colorado-headquartered Rocky Mountain Institute, in its report released on Friday, include incentivizing efficient new vehicles by penalizing inefficient ones and setting up “a manufacturer consortium for batteries, common components, and platforms to develop battery cell technologies and packs and to procure common components for Indian original equipment manufacturers”.
This comes in the backdrop of the ambitious government plan for a mass scale shift to electric vehicles by 2030.
A case for a three-pronged approach comprising of system integration, shared infrastructure development and scaled manufacturing has been made in the report, titled “India leaps ahead: Transformative mobility solutions for all”.
While such a strategy will help check pollution and fuel imports, it will have a far-reaching impact on the Indian automobile market. Quite understandably, automobile manufacturers such as Toyota Motor Corp.’s India unit is lobbying with the government to adopt a calibrated approach to adoption of green vehicles instead of India’s radical plan to become an all- EV market by 2030, reported.
The other key recommendations made in the report include setting up a unified metropolitan planning authority and creating standardized swappable batteries for two- and three-wheelers “to electrify these important vehicle segments as quickly as possible through a pay-per-use business model and an integrated payment, tracking, and smart-charging system”.
The government has been trying to push the sales of EVs. The Centre is exploring measures ranging from leasing of EVs to transferring technology to firms for commercial production of lithium-ion batteries developed by the Vikram Sarabhai Space Centre for use in automobiles. It is also exploring a strategy that involves reducing the battery size to bring down EV prices,
reported.
The report said India can save 64% of the energy demand from the road sector for passenger mobility and 37% of carbon emissions in 2030 through its EV programme.
“This would result in a reduction of 156 Mtoe (million tonne of oil equivalent) in diesel and petrol consumption for that year (2030). At $52/bbl of crude, this would imply a net savings of roughly ₹3.9 trillion (approximately $60 billion) in 2030,” the report said.
Rising oil prices present a challenge to India’s growth, said the Economic Survey presented earlier this year. The concern over crude oil prices stems from India’s energy import bill. India paid ₹4.16 trillion to buy 202.85 million tonnes of crude oil in 2015-16.
Given that solar power projects generate electricity during the day, the EV batteries can be used to store that energy.
“With a larger share of the fleet running on electricity, it leads to lower local emissions, improving public health. This has significant implications for India’s electricity sector and economy, supporting India’s ambitious renewable energy goals,” the report said, while pitching for non-fiscal incentives such as easier registration and preferred electricity tariffs for faster EV adoption.
The EV plan will also help create the demand for electricity generated by India’s power generation plants.
Also, India’s current installed capacity and projects under construction are expected to meet the country’s electricity demand till 2026. This is the trigger for the power sector to scout for new growth areas.
“Design regulations that enable electric vehicle supply equipment (EVSE) deployment and vehicle-grid integration (VGI), empowering a Forum of Regulators (FOR) to create regulatory frameworks that make EV charging ubiquitous, affordable, and a grid asset,” the report recommended.