Electric vehicles are in our future
Ownership costs and range anxiety could deter buyers
This is a piece of news that will thrill the growing tribe of Elon Musk acolytes. This week, a government-appointed panel recommended that electric car users in the country be permitted to pay through digital means for charging their vehicles. This is the latest in the series of incentives being offered by the State to discourage ownership of vehicles which run on fossil fuels and encourage those who want to make the shift to electric vehicles (EVS). According to India’s draft national energy policy, EVS have the potential to dramatically cut the demand for fossil fuels. “If most Indian vehicles are electric by 2030, pollution levels in cities could drop 80%-90%, and India could save $100 billion...,” says the draft policy. In one dramatic move, electric vehicles could also help address several major issues confronting India: energy security, climate change and noxious emissions.
Already, the government seems to be eyeing an electric future. By 2020, the National Electric Mobility Mission Plan wants to ensure a vehicle population of 6-7 million electric and hybrid vehicles in India. By 2030, it is envisioning a scenario in which all vehicles on the country’s roads are powered by electricity. Lower GST on electric vehicles at 12%, compared to 43% for hybrid vehicles, is a step in that direction. But the feasibility and ownership costs of EVS are the big question marks that may prove to be road blocks on the way to realising this dream. The number of privately-owned vehicles in India is likely to reach 500 million by 2030. Charging them will need the creation of an enormous infrastructure. In EVS, the battery is the most expensive item. The batteries use nickel, cobalt, aluminium, graphite and lithium, whose availability is far more scarce than coal and oil. An innovative suggestion to mitigate high battery costs is to lease the batteries.
Electric vehicle buyers often suffer from range anxiety: EVS cover just a small distance on a single charge. Buyers, some of whom have monstrously long daily commutes, won’t invest in EVS unless the need for charging stations at short distances can be met. According to a Bloomberg report, India has only about 350 charging points, compared to China had about 215,000 installed at the end of 2016. Perhaps public-private partnerships with clearly fleshed out revenue models could encourage car makers. But they must get the backing of a supportive tax structure and policies. This still seems a long way down the road.