What we must do to spur sale of electric vehicles
Give tax breaks, make special driving lanes and push private players to develop charging infrastructure
In 2014-15, India’s transport sector was responsible for 7.5% of the total greenhouse gas (GHG) emissions, and it consumed 23.58% of petrol and diesel. According to the NITI Aayog, India can save ₹3.900 trillion by 2030 if it switches to green mobility.
In 2013, the Centre announced the National Electric Mobility Mission Plan (NEMMP) with an aim to deploy six to seven million electric vehicles (EVs) by 2020. If this plan succeeds, the Centre estimates, 9,500 million litres of fuel will be saved and there will be a reduction of 2 million tonnes of GHG emissions by 2020. In 2015, under the Faster Adoption and Manufacturing of Electric Vehicles scheme, the government announced incentives of up to ₹6.6 million per unit for electric buses and ₹138,000 per unit for four wheelers. The government is now aiming for 100% EVs by 2030. To achieve this, it has announced that new EVs will be floated by 2017.
The Atal Mission for Rejuvenation and Urban Transformation (AMRUT) has also given the EV sector an indirect push. Out of the ₹1 trillion allocated for AMRUT, a significant amount will beCen spent on modernising the transport sector, targeting mass-scale EV penetration in the future.
Yet these initiatives are not enough to increase EV adoption. The reasons: First, absence of proper EV charging infrastructure. India has only 222 public charging stations. This is low compared to the 22,000 EV sales in 2015-16. Second, the cost of ownership of EVs is much more than the cars we use today. The battery pack of a pure EV run by lithium ion battery constitutes 40% of a vehicle’s cost. The cost of the battery pack, however, is declining gradually.
To stimulate the sales of EVs, the government need to take some important steps: First, it must give additional benefits to consumers such as exemption from road taxes, value-added taxes and service taxes. Second, parking permits in dense urban areas, special driving lanes, and exemption from toll fees and free parking. Third, reduce GST on EVs, which is now at 12%. Fourth, since April 2017, the Centre has withdrawn incentives for mild hybrid vehicles as it is fuel inefficient and more polluting as compared to electric and heavy hybrid vehicles. This will open up the incentive amount of the FAME scheme for the benefit of electric mobility.
Fifth, individual cities must have their own EV roadmaps to meet their targets.
Sixth, the Centre should encourage private investors to develop charging infrastructure under public-private partnerships.