India must focus on the electrification of commercial car fleets
As rising oil prices, air pollution, and falling battery costs make a case for electrification of road transport stronger by the day, it is important to remember that this is still an infant industry that needs sustained public support. While the Government of India (GOI) and many state governments have come up with impressive policies on the electric vehicle (EV) sector, there is yet another aspect that needs attention: The commercial car fleet segment, which includes both conventional and app-based taxis and large corporate fleets.
Focusing on the electrification of commercial car fleets has benefits. For one, commercial vehicles get utilised a lot more than private cars, yield a quicker payback, reducing oil consumption and urban pollution significantly. In addition, faster payback and absence of credit constraints for large-fleet owners mean lesser subsidy per vehicle than private cars.
In a recent study, researchers led by the first author at the University of California, Los Angeles, analysed data from over 700,000 taxi trips (covering 15 million vehicle kilometres) in New Delhi on the Ola platform. They concluded that a fleet of about 23,000 EVS, supported by a network of 3,000 50-kilowatt charges, would be enough to satisfy New Delhi’s entire present ride-share demand.
The upfront investment in vehicles and infrastructure would be recouped in less than two years through savings on fuel and maintenance costs, even after taking into account factors such as the cost of charging infrastructure, including the rental cost of land used for installing charging stations and the current market price of popular EVS (post GOI subsidies).
More significantly, the study estimates that electrifying the entire ride-share fleet could eliminate 180 metric tonnes of tailpipe nitric oxide emissions and 0.14 metric tonnes of particulate emissions annually.
State and city governments would do well to take full advantage of the support offered by GOI for production and adoption of EVS and lead the way in enacting ambitious policies to both push and help (mostly in non-fiscal ways) large and wellfinanced commercial and corporate fleets to move away from diesel and petrol cars.
Two critical next steps needed to accelerate this initiative would include major original equipment manufacturers (OEM) delivering a variety of car models and the emergence of an effective and adequate fast-charging infrastructure. OEMS would do well to design cars for interoperability across different charging networks owned and operated by OEMS or third-party charging service providers. In addition, to overcome range anxiety issues, it would be imperative to set up fastcharging stations.
Initially, public-charging stations will need government financing, concessional or rentfree land, necessary changes in regulatory provisions of urban planning and building bylaws, and differential power pricing.
From a policy perspective, a critical missing element is mandates requiring large fleet owners to transition to EVS and for OEMS to begin to meet a particular share of annual sales through EVS. Policymakers can reduce the cost of compliance through a credit-trading system that allows fleets to both trade credits across firms and across vehicle segments (between cars, buses and e-delivery trucks) to a limited extent. Furthermore, to ensure this transition minimises reliance on vehicle components and chargers imports, policymakers could consider additional credits to OEMS in proportion to the domestic value content in a given vehicle or charging infrastructure.