Govt explores buy and lease strategy to boost electric vehicle usage

The goernment is exploring a strategy to task an automaker with buying electric vehicels in bulk and lease them to taxi firms, such as Ola


The Mahindra Reva plant in Bommasandra, Bengaluru. Government firms such as Bhel and Power Grid Corp. have evinced interest in making electric vehicles and electric cars, and charging stations for them. Photo: Aniruddha Chowdhury/Mint
The Mahindra Reva plant in Bommasandra, Bengaluru. Government firms such as Bhel and Power Grid Corp. have evinced interest in making electric vehicles and electric cars, and charging stations for them. Photo: Aniruddha Chowdhury/Mint

New Delhi: The government is exploring a strategy to task a company with buying electric vehicles (EVs) in bulk and then leasing them to companies such as taxi aggregators, in an attempt to bring down the cost of such vehicles.

The strategy is to encourage more manufacturers to make electric vehicles. The number of electric vehicle purchases may range between 200,000 and 1 million.

The government has been exploring the leasing model for electric vehicles, Mint reported on 15 April.

“There is a lot of interest in this plan. At least two companies each from the private sector and public sector space have evinced interest,” said a person involved with the government’s electric vehicles push. He declined to name the firms.

SoftBank Group Corp. chairman Masayoshi Son said in a statement in December that ANI Technologies Pvt. Ltd, which runs cab-hailing service Ola, in which the Japanese firm is an investor, may introduce a fleet of 1 million electric cars in partnership with an electric vehicle maker and the government.

“Volumes help in reducing costs. We are also looking at improving km per kilowatt hour (kWh) and efficiency of electric vehicles in terms of motor, tyres, aero dynamics and lightweight material,” said the person quoted above.

The National Democratic Alliance (NDA) government is exploring measures ranging from leasing of electric vehicles 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 electric vehicle prices.

According to the business plan for electric autos and buses reviewed by Mint, the battery cost is expected to be Rs18 per km, with the charging cost per km being Rs0.99.

Abdul Majeed, partner and national auto practice leader, PricewaterhouseCoopers, said, “It sounds like a good step aimed in the direction of bringing some momentum to the sales of electric vehicles. It will help build scale. Once scale gets build, rest of the issues such as infrastructure challenges, etc., will be taken care of.”

Shifting to electric vehicles will check pollution and reduce fuel imports. India’s energy import bill is expected to rise from around $150 billion currently to $300 billion by 2030. The centre has set a target of 6 million electric vehicle sales by 2020.

Queries emailed to the spokespersons for NITI Aayog, department of heavy industry; and ministries of road transport and highways, and new and renewable energy on Sunday evening remained unanswered.

The electric vehicle programme is slowly coming together. The Economic Times newspaper on 25 April reported that Indian Institute of Technology-Madras professor Ashok Jhunjhunwala will spearhead the government’s electric vehicle programme.

While Bharat Heavy Electricals Ltd (Bhel), India’s largest power generation equipment maker, wants to manufacture electric vehicles such as buses, cars, two-wheelers and boats, Power Grid Corp. of India Ltd, the power transmission utility responsible for establishing green energy transmission corridors, is considering setting up charging stations for electric vehicles.

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