The government has an ambitious plan for a mass scale shift to electric vehicles by 2030 so that every vehicle on Indian roads by then—both personal and commercial—are powered by electricity. Photo: AFP
The government has an ambitious plan for a mass scale shift to electric vehicles by 2030 so that every vehicle on Indian roads by then—both personal and commercial—are powered by electricity. Photo: AFP

Niti Aayog calls for electric vehicles push while discouraging petrol, diesel cars

Niti Aayog has recommended fiscal incentives for electric vehicles (EV) manufacturers and discouraging privately-owned petrol and diesel vehicles

New Delhi: Policy think-tank Niti Aayog has recommended offering fiscal incentives to electric vehicle (EV) manufacturers and discouraging privately-owned petrol- and diesel-fuelled vehicles, potentially far-reaching moves for India’s mobility, energy and environment needs.

Niti Aayog and Colorado-based Rocky Mountain Institute, in a report released on Friday, recommended 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 government’s ambitious plan for a mass scale shift to electric vehicles by 2030 so that every vehicle on Indian roads by then—personal and commercial—is powered by electricity.

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".

“India could leapfrog the conventional mobility model," the report said.

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 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, Mint 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 Indian government has been trying to push 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, Mint reported.

The report said that India can save 64% of 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 USD 52/bbl of crude, this would imply a net savings of roughly Rs3.9 lakh crore (approximately 60 billion USD) 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 Rs4.16 trillion to buy 202.85 million tonnes of crude oil in 2015-16.

There are other benefits as well.

The government plans to generate 175 giga watt (GW) of renewable energy capacity by 2022 as part of its commitments to the Paris climate change agreement. Of this, 100GW is to come from solar power projects. With storage being the next frontier for India’s clean energy push from sources such as solar, the batteries in EVs offer a solution. 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. Of the country’s installed power generation capacity of 326,849MW, only half is operational at any given point of time due to muted demand. 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.

The issue assumes importance as the Electricity Act, 2003 doesn’t allow electricity sales unless one obtains a discom licence to distribute power from the respective state electricity regulatory commission.