A lot has been spoken about the electric vehicles (EV) and the various types of hybrid vehicles. We know the vehicles run on chargeable batteries and that India is aiming to bring in EVs on a large scale.
The Current Situation
India is the fourth largest emitter of greenhouse gas emissions. Emissions were 3,202 million tons of CO2 equivalent in 2014. The only thing that is in our favor is that the emissions per capita are very less since we have a large population. But as the nation develops, it is going to increase the energy demand. Since most of the energy is derived from fossil fuels, it will end up increasing the carbon footprint of India.
Vehicle emissions make up about 20% of the total emissions in India. Thus, a focus on reducing vehicular emissions is the need of the hour
The FAME I and FAME II schemes are launched by PM Modi led government at critical juncture. The aim is EV sales penetration of 30% of private cars, 70% of commercial cars, 40% of buses and 80% of two and three-wheelers by 2030.
While the numbers reflect targets being met on time, what hasn’t been spoken is the vision behind the focus on Electric Vehicles.
Insulating India from the Oil Conundrum
We keep on reading about US-Iran tensions and the impact of political uncertainty in Middle East. We always remain concerned about what will happen to oil prices. Modi government is trying to circumvent this problem.
Oil has been the driving force of the world since last century. It has caused wars in the Middle East and disruptions in the supply chains leading to wavering prices. Since India imports about 80% of oil from abroad, any change in oil market sends Indian economy into a tizzy
Adoption of EVs will help in reducing dependence on oil imports. According to a reply in Parliament, India consumed 28.3 million tons of petrol in 2018-19 and 83.5 million tons of diesel. Most of this import will be avoided, insulating India from the oil market to some extent
Saves Crucial Forex
India is a developing country. It needs money to invest in crucial sectors. Our fiscal deficit is moderate but there are concerns about borrowing money from the market. If we can save money in oil import, the foreign exchange saved can be utilized in investing in infrastructure and support flagship schemes of the government.
By assuming the petrol costs ₹70/litre, India can save about ₹1.3 lakh crore per year. This can be invested in roads, railways, power plants, ports, airports, creating new job opportunities, etc.
Fulfilling India’s Commitment about Environment Conservation
India is a signatory to the Paris Accord. It aims to reduce its emission intensity by 33-35% in next few years and make 40% of its energy use from renewable sources. This aim also gets fulfilled by EVs as they reduce the carbon emissions
A report by NITI Aayog claims that by 2030, EVs may reduce carbon emissions to the tune of 846 million tons CO2 equivalent over the lifetime of the vehicle. This would mean lesser impact of global warming on India and less erratic weather patterns.
Renewable Energy- A Unique Opportunity
PM Modi led government is fusing EVs with renewable energy. It was feared that the electricity needed to run EVs would come from coal-based plants leading to more carbon emissions.
But India has earmarked a goal for achieving 200GW of renewable energy by 2022. Currently, the growth of solar and wind power is remarkable in India.
This increased capacity will fuel the EVs. It will be a double benefit- environment friendly vehicles running on environment friendly energy. Further, it helps to expand the market for RE developers, who are concerned with the issues related to energy curtailment.
Focusing on India’s Advantages
The FAME scheme reflects a lot of strategic thinking on utilizing India’s advantages.
- India has about 170 million two wheelers, which is 79% of the total vehicles in India. The FAME I scheme has specific focus on incentivizing electric two wheelers. Capacities are being generated by Indian auto industry to manufacture EV two wheelers which can propel India as a manufacturing destination for the entire world. A report by NITI Aayog also suggested adopting this approach.
- Shared Mobility is fast growing in India. Ola and Uber are leading companies in shared taxis. FAME II focuses on manufacturing and incentivizing shared taxis. This segment is poised to grow in the future
Both these steps reflect the strategic thinking of Narendra Modi led government.
Electric Vehicle is the elephant in the room, too hard to ignore. The world will slowly but surely adopt electric vehicles as a viable mode of transport for the future. India is catching up the bandwagon and trying to gain a lead in the sector.
