Home >Auto News >China is racing ahead of India in adopting EVs

Electric vehicles (EVs) may be the future of mobility but at present form a minuscule portion of the vehicles sold in India. In comparison, electric two-wheelers are a huge market in China and the electric car market is picking up as well. Mint examines the reason behind this.

How does moving to EVs help?

India imports 85% of the oil that it consumes annually. Moving towards EVs reduces this dependence. “If India were to reach electric vehicles sales penetration of 30% for private cars, 70% for commercial cars, 40% for buses, and 80% for 2 and 3 wheelers by 2030… [this] can cumulatively save 474 million tonnes of oil equivalent over their lifetime, worth 15.21 lakh crore," the NITI Aayog and the Rocky Mountain Institute point out in an April 2019 report. Nearly 20% of carbon dioxide emissions and 30% of particulate emissions in India are caused by two-wheelers running on petrol and diesel.

How many EVs does India have?

The bulk of EVs in India happen to be two-wheelers. India had about 600,000 electric two-wheelers as of March 2019, according to the International Energy Agency’s (IEA’s) report titled Global EV Outlook 2020. In 2019-20, 152,000 units of electric two-wheelers were sold, taking the number to a little more than 750,000 units. When it comes to cars, as of end 2019, the world had 7.2 million electric cars, a 40% jump over 2018, according to IEA. India had only 0.07% or a little more than 5,000 of these. China is the world leader when it comes to EVs, whether we talk about cars or two-wheelers.

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How many EVs does China have?

China has 3.4 million electric cars or 47% of the total number of electric cars in the world. It had close to 300 million units of electric two-wheelers as of end 2019. The production of two-wheelers in China in 2019 stood at 36 million units. Thus, neither India nor any other country in the world is anywhere in the picture on this front.

Why does China like electric two-wheelers?

“China’s incentive programme granted roughly 6.5 lakh per vehicle no matter the type," according to the NITI Aayog report referred to earlier. This incentive was modified in June 2018, with no incentive being provided for vehicles of a range of under 145km. Also, as per IEA, in 1999, the government designated electric two-wheelers operating at a low speed and having a low weight as bicycles. This exempted them from registration requirements and allowed them to be ridden in bicycle lanes.

Why is India so behind China on the EV front?

An income tax deduction of 1.5 lakh is available on interest paid on loans to buy EVs. Nevertheless, of the 17.4 million two-wheelers sold, only 0.9% were EVs. As per the Economic Survey of 2018-19 that adoption of EVs has been low “due to the lack of charging infrastructure…and the time taken for… charging". Also, India remains dependent on China, Japan, and Taiwan for import of lithium-ion batteries, on which EVs run.

Vivek Kaul is the author of Bad Money.

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