India’s policies and programmes on electric vehicles are “a case of missed opportunities”, says CSE
Zero emissions mandate policy needed for clean air and climate security
India’s progress in electrification of its vehicular fleet remains extremely tardy and slow, despite a policy intent which asks for 30 per cent of all new vehicles to be electric ones by the year 2030 – says Centre for Science and Environment (CSE) based on the findings in its two new, recently released reports that have investigated the strategies for zero-emissions transition in the country.
Electric vehicles in India constitute less than 1 per cent of the country’s vehicle stock. Says Anumita Roychowdhury, CSE’s executive director for research and advocacy: “At a time when the energy demand from road transport is set to double over the next two decades and climate mitigation efforts have to be scaled up, India cannot afford to go slow on electrification of its vehicle fleet.” This is the key message CSE released on “World Electric Vehicle Day.”
The two publications CSE has brought out identify the current challenges, barriers and gaps, and recommend the pathways for a rapid transformation.
These reports from CSE point out that the Indian automotive market cannot remain insular when about 126 countries – accounting for half of the global GDP — have pledged to achieve net zero and carbon neutrality by 2050; 20 countries have already announced plans for 100 per cent zero-emission vehicles and a phase-out of internal combustion engines by 2040-50.
Says Roychowdhury: “It is disturbing that while several ministerial announcements have been made on the minimal target of 30@30 (EVs to be 30 per cent of new vehicle sales by 2030) as well as a higher target of 70@30 by Niti Ayog, there is as yet no regulatory mandate in the country to back up these targets. Even the voluntary target of 40@30 announced by the Society for Indian Automotive Manufacturers (SIAM) remains a non-starter.”
Adds Moushumi Mohanty, senior programme manager, Clean Air and Sustainable Mobility programme at CSE: “It has, therefore, become necessary to identify the roadmap to build scale and speed of fleet electrification. The Indian EV market will have to maintain at least 46 per cent compound annual growth rate (CAGR) for the next nine years to achieve the minimal target of 30 per cent.”
CSE’s special review of the electric bus programme which is a unique approach of Indian strategy to link electrification with mass mobility, shows that in contrast to the original target of 7,000 e-buses under the FAME II programme, only 2,450 buses could be tendered so far. “While one of the reasons for the slowdown is the pandemic, India needs longer term policy approach to link the e-bus strategy with the overall improvement in public transport. In fact, FAME II support for 7,000 e-buses translates into a mere 3 per cent of overall annual demand for buses in India,” says Sayan Roy, deputy programme manager, Clean Air and Sustainable Mobility programme, CSE.
Bus fleet expansion can be an important opportunity — the Department of Heavy Industries estimates that India could become the second-largest e-bus market by 2030 if four out of 10 buses sold are electric.
CSE’s new assessments have reviewed the key policy levers and accelerators that can help build scale and speed of the EV market. These include FAME II incentives, policies related to charging and battery ecosystems, fuel efficiency regulations, production-linked incentives, financing strategies and state-level EV policies.
“Our policy review shows that while several polices and schemes are taking shape, progress is slow. Under the flagship FAME II incentive programme, only 6 per cent of planned fleet could be registered as of July 2021 – a significant portion of the fund remains underutilised. Even though production-linked incentives for EV battery manufacturing have been announced, there is no policy roadmap beyond 2024 to encourage growth in demand. Even the budgetary allocation for 20,000 buses has not been linked with electrification. At the same time, fuel efficiency regulations are too weak to require rapid electrification of the fleet,” says Roychowdhury.
“This is a case of missed opportunities,” she adds.
How should India move ahead?
It is clear that India needs longer term policies and regulatory mandates and targets to build confidence and push the industry to prepare for a transformation. It may be noted that with tighter CO2/fuel efficiency targets and post-BSVI emissions standards, EV technologies will become more cost-effective vis a vis internal combustion engines.
CSE recommends the following:
· Adopt a longer term policy roadmap and set regulatory targets for time-bound electrification of new fleet of vehicles and to bring more certainty in investments. Set targets for each vehicle segment and for scaling up of charging facilities. Raise the bar for higher levels of ambition.
· Adopt zero emissions vehicles mandate and regulations to upscale — consider production-based ZEV credit regulations. This can offer flexibility to the industry to develop plans to achieve targets, ensure robust supply and larger model availability, and address skewed costs, among other things.
· Define milestones at the central and state level for each strategy for time-bound, measurable and verifiable implementation.
· Design each strategy – incentive programme, production linked incentive for localisation, fuel economy regulations, and financing strategy — for effectiveness.
(Report sent by Pratyusha Mukherjee, a BBC Journalist based in Kolkata)