Home / Politics / Policy /  Government goes slow on procurement of electric vehicles, limits sourcing

NEW DELHI : India’s largest electric vehicle (EV) procurement programme could come to a halt amid the economic slowdown, with state-run Energy Efficiency Services Ltd (EESL) planning to curb its sourcing to less than a third of the 10,000 sedans it originally tendered due to lack of demand.

EESL gave out a sourcing contract in September 2017 to Tata Motors Ltd and Mahindra and Mahindra Ltd. While 1,500 such EVs have been sourced so far, EESL now plans to limit the final order to around 3,000 vehicles by March 2020.

While 40% of the vehicles were supposed to have been supplied by M&M, the rest were to come from Tata Motors.

Only 500 sedans have been supplied by Tata Motors. M&M has delivered 1,000 units.

The change in EESL’s plan comes amid the worst slump in passenger vehicle sales in nearly two decades.

“I don’t think this EV procurement plan will continue going forward and maybe after March 2020, EESL will close the tender. In the tender it was mentioned that while 10,000 units was the overall allocation, vendors will only manufacture after a demand for the same was raised," said a person aware of EESL’s strategy, requesting anonymity.

These EVs were to replace petrol and diesel cars used by the government and its agencies, which together have a fleet of around half-a-million cars, a third them leased.

“EESL couldn’t aggregate the demand successfully. Andhra Pradesh was the biggest problem. The moment the Telugu Desam Party (TDP) government changed, everything went for a toss. They had signed for a delivery of 10,000 electric vehicles and EESL has even deployed 500-600 vehicles there," said the person cited above.

After the Y.S. Jagan Mohan Reddy-led YSRCP government assumed charge on 30 May, it has been revisiting the decisions taken by the previous government, including a move to revise clean energy power purchase agreements (PPAs).

The EV procurement plan has had its share of problems. Mint reported in June 2018 about senior government officials refusing to use EVs made by M&M and Tata, citing poor performance and low mileage.

Queries emailed to the spokesperson of M&M on Tuesday evening weren’t immediately answered. A Tata Motors spokesperson said: “We do not comment on speculations." An external spokesperson for EESL declined to comment.

The development comes even as the Narendra Modi government prioritizes a shift to electric mobility in view of India’s commitment to reducing its carbon footprint by a third from 2005 levels. India aims to achieve this target by 2030. Besides, the transition to EVs is expected to reduce India’s oil import bill and generate new avenues of employment.

The government wants to see six million electric and hybrid vehicles on Indian roads by 2020 under the National Electric Mobility Mission Plan 2020.

Going forward, EESL plans to deploy the balance 1,500 EVs to cab firms such as Meru, Ola and Blu Smart, among others, on dry lease (i.e without a driver). “EESL will supply them the vehicles and also provide then with charging infrastructure. They can procure these vehicles from somewhere else but they don’t have the charging infrastructure which EESL has.

EESL will install 300 charging stations in Delhi and now we have around 60. All over India we will set up more than 1,000 charging stations," said the person cited above.

The shift in EESL’s plans comes against the backdrop of differing voices within the National Democratic Alliance government on India’s ambitious plan for a transition to electric mobility. While this year’s Union Budget provided an impetus to EVs, transport minister Nitin Gadkari is of the view that the government will neither set a specific deadline for automakers to switch to EVs, nor ban production of petrol and diesel vehicles.

EESL' playbook was to prove that a EV programme can work in India. It has proved that," said the person cited in the story.

Utpal Bhaskar
"Utpal Bhaskar leads Mint's policy and economy coverage. He is part of Mint’s launch team, which he joined as a staff writer in 2006. Widely cited by authors and think-tanks, he has reported extensively on the intersection of India’s policy, polity and corporate space.
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