Mint, June 12, 2017
The article says that questions are already being raised about the government’s strategy of prioritising electric vehicles, with the stated objective of having no diesel or petrol car sales in India by 2030. Why can the government not push for hydrogen-powered fuel cells instead? Or CNG vehicles? These are cheap, almost as clean as EVs, and the related infrastructure is already in place. The article asks why the government is picking the “winner”.
While the article raises doubts about the feasibility or judiciousness of choosing the electric vehicle (EV) as the primary policy tool to tackle the emissions-transportation dichotomy, it does not take into account the overall impact of the EV and the policy being shaped around it. The article overlooks the benefits of the policy, and of the full process undertaken to implement it, which would appear to be borne out by the following facts about the FAME India Scheme as well as the parent NEMMP-2020 plan.
FAME India Scheme:
- The FAME India Scheme [Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India] — launched under NEMMP-2020 — is planned in phases, so as to get enough time to test the waters and decide the scheme’s scope.
- Phase I of the scheme is being implemented over a two-year period, having commenced on April 1, 2015 with an annual outlay of Rs. 75 crore and an overall outlay of Rs. 795 crore.
- Further implementation of the policy will depend on its performance in Phase I and on the feedback from respective stakeholders.
- Policy of electric and hybrid vehicles has the support of other schemes, including FAME India, under which the Department of Heavy Industry has extended demand incentives at Rs 127.77 crore for purchase of 1,11,897 electric and hybrid vehicles.
- FAME India scheme is meant to support the hybrid/ electric vehicles market development — not just through purchase-sale incentives but also via its manufacturing eco-system. The idea is to make it self-sustained by the end of the policy’s term.
- The scheme has four focal points: Technology development, demand creation, pilot projects and charging infrastructure. These will look over the entire development, implementation and performance graph of the policy.
National Electric Mobility Mission Plan 2020:
- This parent plan, NEMMP-2020, is a comprehensive and collaborative project to promote hybrid & electric vehicular mobility by a combination of policies.
- The aim is a vehicular population of about 6-7 million electric/ hybrid vehicles by 2020.
- NEMMP-2020 aims to achieve national fuel security by promoting hybrid and electric vehicles in the country.
- It is expected to save 9,500 million litres of crude oil equivalent to Rs 62,000 crore in savings.
- It includes indigenisation of technology so that India can assume global leadership in some vehicle segments.
- NEMM is a composite scheme that uses several policy tools, such as demand-side incentives to facilitate acquisition of hybrid/ electric vehicles, promoting R&D in technology (battery, power electronics, motors, etc), charging infrastructure, supply-side incentives, retro-fitment for on-road vehicles, etc.
Benefits of Environment-friendly EVs:
- Reduction in air pollution
- Provision of a gasoline-free, well-planned transport option
- Reduction in India’s dependence on imported oil
- Contribution to fight against climate change
- Reduction in gasoline car purchases
The facts above appear to show that the EV route offers not just a reduction in India’s dependence on imported crude but also a comprehensive mitigation of both carbon emissions and transportation problems. Without contesting the case for other renewable options for fuelling transport, such as hydrogen-powered cells or CNG, it may be deduced from the facts above that the policy opted for has a long-term layout and allows us to assess its performance in a transparent manner. The incentives will make it easier to increase both supply and demand for electric and hybrid vehicles. It is premature to dismiss beforehand, as the article seems to do, our ability to put the necessary infrastructure in place. With the full infrastructural support, the gains from the EV route can be optimised.
The objective, after all, is not to bring in EVs randomly but as part of a well-designed policy, leveraged by subsidy and incentives, and supported by connected schemes. Buyers then may be more likely to consider the long-term benefits of switching to EVs. India reportedly has the necessary advantage in terms of numbers of vehicles to be purchased and population densities. According to the government’s Automotive Mission Plan 2016-26, the domestic passenger vehicles market is expected to more than quadruple to 13.4 million units by 2026, provided average GDP growth hovers around 7.5%. A move to EVs will reduce pollutants and fuel imports, which is important since India’s current energy import bill of $150 billion is expected to double to $300 bn by 2030 – and for a country that imports 80% of its oil.