PremiumTo effectively push the adoption of electric mobility in the coming decade, India should set an ambitious target for transition to electric vehicles like its European counterparts, encourage vehicle fleet operators to use more such vehicles, and liberalize regulations related to establishing and operations of charging infrastructure, said World Business Council for Sustainable Development in a report.
The report also mentioned that the Indian government should consider incentivizing customers who would scrap their combustion engine vehicles for an electric one and also offer non-fiscal incentives to customers besides financial incentives through the FAME scheme and tax benefits.
Employee transport, ride-hailing services, and goods delivery services have also been identified as sub-sectors where the adoption of electric two, three, and four wheelers could gather steam in the near future.
According to WBCSD, while the recent Indian electric vehicle policy advancements are encouraging electrification, the absence of ambition and mandates leaves ambiguity about the rate at which the Indian government is envisioning the EV transition.
“India is yet to come up with a national-level EV target that is supported by a regulatory framework of mechanisms. Past announcements and efforts between ministries and private bodies have been un-coordinated and subject to revisions," the report added.
It further noted that there is a need for an open-minded collaboration between businesses and governments to formulate India’s EV ambition. Putting together an ambition statement should be part of a larger industry dialogue that considers a systemic transformation towards sustainable mobility.
The Union government has been urging vehicle manufacturers to increase their investments in the development and manufacturing of electric vehicles to reduce pollution and import of crude oil. Besides traditional manufacturers, some of the electric startups like Ather Energy, Ola Electric, and other startups have ambitious plans of launching their respective products in the segment.
Earlier this month the Union government announced a 50% increase in incentives for electric two-wheelers to ₹15,000 per kilowatt-hour from ₹10,000 per kWh. According to the new rules, the cap on incentives will be limited to 40% of the total price compared to the earlier cap of 20%.
The ministry of heavy industries has also mandated Energy Efficiency Services Ltd (EESL) to procure 300,000 electric three-wheelers for use by different authorities. The public sector unit has been given the responsibility to procure electric buses for deploying across cities. India has also come up with an ambitious Production Linked Incentive scheme to promote the manufacturing of lithium cells in the coming decade.
WBCSD has also tried to make a strong case for subsidies in case a customer or an organization is scrapping its combustion engine vehicles and replacing them with electric ones. “Given that fleet operators are major buyers of vehicles and that their fleets reach the end of life (EoL) early compared to individual users on account of higher utilization rates, extending such incentives to fleet operators ensures a faster transition to e-mobility," the report noted.
Lack of proper charging infrastructure has been one of the biggest impediments to the successful adoption of electric vehicles in India and the easing of existing regulations is the need of the hour for the development of efficient charging infrastructure across the country.
“Private investors face a challenge in getting good locations at suitable prices. Due to regulatory distortions, charging point operators (CPOs) and fleet operators are often left with the choice of commercial real estate locations to set up charging infrastructure, where the value and cost of land are high," the council noted. “Revisiting governing market rules and instituting clear guidelines for both DISCOMs and fleet operators/CPOs/BSOs may accelerate the installation of EV charging networks in the country."
