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Govt Policies of 2021 To Help Boost EV Adoption:

GS Paper 3:

Topics Covered: Infrastructure- Roadways.

 

Context:

In a thrust towards incentivising new age technologies and fulfil the pledged taken at COP26 to reduce its carbon emissions to net-zero by the year 2070, India is aggressively promoting the adoption of Electric Vehicles (EVs).

 

Aim:

India aims to switch 30 percent of private cars, 70 percent of commercial vehicles, and 80 percent of two and three-wheelers to EV by the year 2030.

 

For this, both Central and state governments are offering various incentives to buyers and manufacturers. Various measures undertaken include:

PLI Scheme For Auto Sector: In September this year, the Union Cabinet approved a Rs 26,058 crore production-linked incentive (PLI) scheme to accelerate domestic manufacturing of electric and fuel cell vehicles and drones in India.

FAME II Amendment: Under FAME-II (Faster Adoption and Manufacturing of Electric Vehicles-II) scheme, the government significantly reduced the price gap between petrol-powered two-wheelers and electric ones by increasing the subsidy rate for electric two-wheelers.

Scrappage Policy: In August this year, the government launched the Vehicle Scrappage Policy virtually at the Gujarat Investor Summit. The policy aims to phase out unfit and polluting vehicles in an environment-friendly manner.

Along with Centre, state governments are also leaving no stone unturned to promote faster adoption of EVs in India. To increase penetration and adoption of battery electric vehicles (BEVs), governments of around 20 states in India, including Delhi, Gujarat, Goa, Maharashtra and Rajasthan have already come up with either a draft or final state level EV policies.

 

Challenges ahead:

  1. The Indian electric vehicle (EV) market currently has one of the lowest penetration rates in the world.
  2. Capital costs are high and the payoff is uncertain.
  3. The Indian EV industry has been hit hard due to rupee’s dramatic depreciation in recent months.
  4. Local production of inputs for EVs is at just about 35% of total input production.
  5. The production will be severely affected in terms of production costs.
  6. The Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (Fame) framework has been extended repeatedly.
  7. An uncertain policy environment and the lack of supporting infrastructure are major roadblocks.
  8. India does not have any known reserves of lithium and cobalt, which makes it dependent on imports of lithium-ion batteries from Japan and China.

 

Need of the hour:

  • For EVs to contribute effectively, we need commensurate efforts in developing an entire ecosystem.
  • Need to shift the focus from subsidizing vehicles to subsidizing batteries because batteries make up 50% of EV costs.
  • Increasing focus on incentivizing electric two-wheelers because two-wheelers account for 76% of the vehicles in the country and consume most of the fuel.
  • A wide network of charging stations is imminent for attracting investment.
  • Work places in tech parks, Public bus depots, and Multiplexes are the potential places where charging points could be installed. In Bangalore, some malls have charging points in parking lots.
  • Corporates could invest in charging stations as Corporate Social Responsibility compliances.
  • Acquiring lithium fields in Bolivia, Australia, and Chile could become as important as buying oil fields as India needs raw material to make batteries for electric vehicles.

 

Insta Curious:

Which states in India have adopted Electric Vehicle Policies? Reference: Read this.

 

InstaLinks:

Prelims Link:

  1. Electric Vehicle Policy in India.
  2. Similar policies by States.
  3. FAME Scheme.
  4. Fame Scheme Phase 1 vs Phase 2.

Mains Link:

Discuss the challenges associated Electric Vehicle Policies in India.

Sources: Economic Times.