Going Electric

Let's start with a few hard-hitting facts. First, air pollution accounted for 12.4 lakh deaths in 2017, finds a joint study conducted by Indian Council of Medical Research and Union Health Ministry. Second, 22 of the top 30 most polluted cities in the world belong to India, mentions data released by IQAir AirVisual and Greenpeace. Third, India accounts for 7 per cent of global CO2 emission and is the fourth highest individual emitter, claims Global Carbon Project. Moreover, emission may be doubled by 2030 as the country is building new coal plants and oil imports too keep rising with its growing population. India imports around 80 per cent of its crude oil requirement, and the bill, which was around $88 billion during 2017-18, is likely to touch $300 billion by 2030. All this sounds alarming. But, what are we doing to overcome this deep crisis?

By 2030, India, under the Paris climate agreement, is obligated to reduce its carbon footprint by over 30 per cent of the 2005 level. So, while global discussions to save the environment have been in fashion over the last decade, India too has started thinking about it more seriously; and as obvious, when it comes to air pollution, vehicles are the first to face the brunt, which is understandable as they are one of the major pollutant contributors. Thus, the end result of all the pondering was a strategic plan – a plan to adopt all-electric vehicles for its transport system and stop the sale of fuel run vehicles by 2030. Which means that in less than 12 years, every vehicle on the nation's roads must be battery-powered. That is, more than 21 crore registered vehicles must be phased out to pave the way for an eco-friendly mobility system. Well, that's an ambitious plan! It does also look achievable on paper. But what about reality; shouldn't a goal also be realistic?

The government is expecting to tame a gargantuan phenomenon in a very short span of time and has made its intention very clear with Union Minister Nitin Gadkari recently warning automobile makers to join the journey or else prepare to be bulldozed. Also, the 2015 Paris climate agreement demanded 500 million electric vehicles worldwide to cut carbon emissions by 2030 and obviously, India would be one of the major contributors. Now, the million-dollar question is – will India be able to achieve the said target while overcoming the many potholes strewn on its road to success?

It won't be an overstatement to say that available infrastructure to support electric vehicles (EVs) in India is abysmal. Forget rural areas, even metro cities do not have an adequate number of charging stations. According to an EY report, there are 63,674 fuel stations in the country, but the number of charging stations is just 222. How does the government expect someone to invest in EVs if it can't assure that they won't be struggling for a charge-up in their need of the hour?

India, where power cuts are common, would first need to improve its power supply. We are not a power surplus nation. A major part of our electricity generation depends on coal. Though the country is investing billions in renewable energy, it will take a few more years to make a complete switch towards it. Also, inconsistent power supply can lead to serious hardware damage. Most importantly, there is no certain policy that car makers can bank upon, making it difficult for the manufacturer to create a blue chart for required investment. We can always import, but it will raise the cost while defeating the main purpose of providing EVs at a cost-effective price. And, when it comes to cost-effectiveness, we have the highest priced EVs. Cost of an EV in India is way more than that of an oil-run car. For example, Mahindra E20's on-road price is around Rs 7 lakh. In comparison, Maruti's Alto, petrol version, is priced at around Rs 2.5 lakh. Additionally, current generation EVs are inefficient. On average, an EV in India provides around 120 km on full charge, making it unsuitable for long drives. They also lack speed, a deterrent for many buyers. In 2016, EVs accounted for a meagre 0.02 per cent of the Indian car market. It clearly shows that manufacturers are yet to assure a customer of EV's quality.

Embracing EVs will create many jobs and investment opportunities in the country, but before that, it may disrupt the economy as the auto industry is a key driver. There are so many companies involved in making automobile parts, a sudden switch will cause job losses. Moreover, dealers themselves are not convinced with EVs. A car dealer's main source of income depends on service cost – when a car is sold, a dealer earns more from selling accessories, insurance, after-sale service and other peripheral services rather than the car itself. Now, EVs are less complicated machines and cheaper to run than their oil counterparts. They don't need engine oil and other similar liabilities. So, it reduces service cost, which in turn affects the revenue source of a dealer.

Last but not least – the cost of batteries, which run EVs, is too high in the country. This is a prime barrier making EVs dearer. Many reports though suggest that the battery price may go down. The price of lithium-ion batteries has fallen from $1,000 per kWh to $227 per kWh in 2016, claims a McKinsey report. The report further claims that the cost may fall below $100 per kWh by 2030. But, given the fact that lithium is one of the scarcely available elements on Earth, the price of batteries going further down is unlikely.

Knowing that there would be so many hurdles, has the government just set the target without carving a path? No. To promote EVs in public transport, the government introduced FAME India (Faster Adoption and Manufacturing of Electric Vehicles in India) scheme in 2015, under which, it provided financial help to vehicle owners. The total outlay for the first phase was Rs 895 crore, which had been later expanded to Rs 10,000 crore in phase 2, implemented on April 1, 2019. The prime focus of phase 2 is on electrification of public transportation. Under it, the government has planned to give incentives to 10 lakh e-two-wheelers, 5 lakh e-three-wheelers, 55,000 e-four-wheelers and 7,000 buses. The scheme proposes to establish around 2,700 charging stations across the country. On major highways, there will be charging facilities on both sides of the road at an interval of 25 km. The government has also promised to work with the auto industry for a viable solution.

But all these attempts are literally baby steps – it makes them move but will hardly help them reach anywhere. And if they do, much time would have been lost in transit. Instead of introducing a comprehensive policy, the government opted for an action plan, which was not logical at all. Still, we have 12 years left. If the government wants to achieve its target, it will have to work on many more fronts.

The government will have to motivate people to purchase EVs. That can happen only when buying EVs becomes more lucrative. The government may have to provide special benefits such as tax deductions, toll waivers, free parking etc., which can result in significant cost savings and lure people into buying EVs. These waivers will make her/him advocate EVs, and we all know that when it comes to motivating people, word of mouth is the best possible path. Clearly, from infrastructure to policy, the case of EVs is in a sorry state of affairs. The government will have to offer a clearer view and support to EV makers so that their vehicle becomes commercially viable. Recently, the Society of Indian Automobile Manufacturers said that the deadline to achieve the target should be pushed back to 2047 as it believes that more time is needed to improve affordability and acceptance.

India, in 2018, pipped Germany to become the world's fourth-largest automobile market in the world and is likely to outpace Japan for the third position by next year. The world of mobility is changing fast and India is no exception. There is a possibility that India will lead the world even in the Electric Vehicle transport segment in the near future. However, without any definite plan, policy, infrastructure and logical timeframe, the great Indian electric vehicle may never reach its destination.