By paving the way for 100% electric vehicles (EV) in another 13 years, the government aims to cut its oil bill—transportation alone accounts for over 70% of India’s oil import bill— by some $60 billion and reduce carbon emissions by 37%.
Dr Rajiv Kumar, vice chairman, NITI Aayog, told The Sunday Guardian: “Two principle drivers of the policy are import substitution and environment. This has to be combined with cleaner methods to generate power like adopting clean coal technology that burns coal without adding to global carbon dioxide levels.”
Released earlier this year, the NITI Aayog’s report, developed in partnership with the Rocky Mountain Institute, argues that reduction in energy consumption will be achieved from a synergistic impact of improvements in systems integration, scaled manufacturing, and shared infrastructure development.
Talking to The Sunday Guardian, experts noted that policy needs to focus on building a strong charging infrastructure, improving the electricity grid, availability of rare earth metals to make batteries, bringing attitude change among consumers, and both fiscal and non-fiscal incentives to the Indian EV industry.
Ventak Sumantran, chairman of Celeris Technology, told The Sunday Guardian: “Firstly, the policy has to have flexibility for technical solutions. Secondly, the overall affordability should also be a major focus area. There has to be focus on multi-modal mobility and not just electric cars, as India is largely dependent on public transportation.” Sumantran recently launched his book Faster, Smarter, Greener – The Future of the Car and Urban Mobility, which synthesises the best approaches and framework to shape up a sustainable trajectory of green, smart, and fast urban mobility.
India, the world’s fifth largest auto market, is aiming to completely shift to greener and cleaner transportation-sector solutions. The government-backed Energy Efficiency Services Ltd. (EESL) has recently awarded the contract to procure 10,000 electric cars at a cost of Rs 10 lakh per car to Tata Motors and Mahindra & Mahindra. These cars, which will be delivered in two phases, will replace the petrol and diesel cars of the government over a period of four years.
Experts believe that by committing to shift to the total electricity run mobility paradigm by 2030, India has not only made an effort to meet its climate change goals well ahead of developed nations like Britain and Norway, but also increased its chances of being a market leader in electric vehicles.
R.K. Mishra, a non-resident scholar at Carnegie India, told The Sunday Guardian: “It’s an applaudable move. Firstly, India will achieve the goals committed during the Paris Climate Agreement. Secondly, it will significantly bring down oil import bills. Thirdly, it opens up the doors for India to be a market leader as we are opening up our market before other countries which have committed to go all electric by 2040.”
In order to cater to the huge population that depends on public transport, the government is also making substantial headway in creating feasible business models to incorporate electric buses as well. One of the major reasons behind the anxiety to adopt electric buses was its pricing. A normal electric bus, with a battery capacity of around 200-300 km, costs around Rs 2 crore. However, the government plans to procure buses that have smaller batteries that will bring down the cost to Rs 40-50 lakh (in line with the prices of Volvo buses).
“You don’t need batteries for 200-300 km capacity for city commuting purpose. The government plans to procure batteries with one-third of that capacity and this will make the buses affordable. The batteries will be charged through a battery swapping strategy at charging stations. Also, overall operational and maintenance costs will come down which will reflect in reduced fares,” added Mishra.
The government is also reportedly planning to implement a similar model in the purchase of personal EVs. If a buyer can purchase EVs without battery, its overall cost can come down by 50%, making it fairly affordable. The buyer can buy a swappable battery by paying only for the charge contained in it.
In an encouraging development, several big carmakers, corporates, and entrepreneurs have joined the bandwagon to push forward the government’s electric vehicles mission. While Ashok Leyland is gearing up to invest $61.5 million-$77 million (INR 400 crore-INR 500 crore) into its EV business, Maruti Suzuki has announced its plan to set up a $600 million lithium ion-battery factory. Mumbai-based JSW Energy has also announced plans to invest $623 million in electric cars, batteries, and charging infrastructure.
Experts believe that India’s journey to 100% electric cars by 2030 will face several roadblocks. Chief among these challenges are infrastructure, behavioural change among people, clean energy generation, and availability of rare earth metals like nickel and lithium.
Akshima T. Ghate, associate director, transport and urban governance, TERI (The Energy and Resources Institute), said: “We need to generate awareness among the people, ensure a robust charging infrastructure to manage millions of electric vehicles on roads on a daily basis, and focus on developing indigenous batteries rather than depending on other countries to avail resources like nickel and lithium.”
Sumantran in his book Faster, Smarter, Greener – The Future of the Car and Urban Mobility argues that the generation of clean energy is imperative because if the electrical grid that charges the batteries in the cars is powered by high-sulphur coal, then the gains of lower carbon emissions from the cars will be lost at the point of power-generation.
Reiterating Sumantran’s observation, Akshima T. Ghate said, “Coal still remains the mainstay for generating electricity in the country. Although efforts are being made to upscale renewable energy, it is only by 2025 that we can expect our grids to start generating clean energy.”
Interestingly, according to last year’s third National Electricity Plan (NEP3) forecast, India will exceed, ahead of schedule, the renewable energy target of 40% total electrical capacity for non-fossils by 2030.
Experts further expressed their concern over the availability of metals like nickel and lithium that are essential components in battery making.
Ventak Sumantran said: “We will require a lot of rare earth metals for the batteries which we don’t have right now; China has been aggressively accumulating these resources. So, if we don’t do it right, it might have a negative impact on the ‘Make in India’ initiative. Whatever we are planning to reduce on oil import bills, we will be paying in importing electronic components from China.”
Responding to these apprehensions, Dr Rajiv Kumar said, “Energy generation can and will become clean which, in turn, will reflect in clean mobility. Furthermore, the focus will be on recycling the existing batteries by adopting global level technologies. Also, we will gradually move to hydrogen fuel cells.”
Sohinder Gill, director, corporate affairs, Society of Manufacturers of Electric Vehicles (SMEV), said that the government should involve all stakeholders to build consensus.
“It’s a praiseworthy step, but the policy should be devised through consensus building. It is high time prime stakeholders get together to discuss their existing capacities. Also, if we are serious about 2030, we should have had kick-started the process already,” Gill said.