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UPSC Sansad TV: In-depth: EV- India’s mobility Paradigm Shift







In the transformative landscape of India’s transportation sector, the spotlight on clean energy during the last couple of years has set the stage for sustained electric vehicle (EV) adoption in India going forward. The EV opportunity has long been seen as a game changer for the automotive sector in India. A desire to reduce pollution levels and dependence on oil imports has bolstered the case for EV adoption. India’s post-liberalization journey has encompassed rapid urbanization, migration and economic growth—factors that have also led to vehicular congestion in sprawling metropolitan regions and a drastic deterioration in air quality.

Potential of EVs in India

  • Help tackle Climate change and air pollution:
    • India has committed to cutting its GHG emissions intensity by 33% to 35% percent below 2005 levels by 2030.
    • As per NITI Aayog’s report EVs will help in cutting down as much as 1 Gigatonne (GT) of carbon emissions by 2030.
    • Electric vehicles don’t produce emissions that contribute to climate change and smog than conventional vehicles.
    • All-electric vehicles produce zero direct emissions, which specifically helps improve air quality in urban areas.
    • Cost reduction from better electricity generating technologies. This has introduced the possibility of clean, low-carbon and inexpensive grids.
  • Energy security:
    • India imports oil to cover over 80 percent of its transport fuel.
    • Electric mobility will contribute to balancing energy demand, energy storage and environmental sustainability.
    • Electric vehicles could help diversify the energy needed to move people and goods thanks to their reliance on the wide mix of primary energy sources used in power generation, greatly improving energy security.
  • Cutting edge Battery Technology:
    • Advances in battery technology have led to higher energy densities, faster charging and reduced battery degradation from charging.
  • Innovation:
    • EVs manufacturing capacity will promote global scale and competitiveness.
  • Employment:
    • Promotion of EVs will facilitate employment growth in a sun-rise sector.

Impact of reduction of subsidy for EVs

  • The Union Ministry of Heavy Industries recently reduced the subsidy for electric two-wheeler vehicles under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) scheme from Rs 15,000 per kilowatt-hour (kWh) to Rs 10,000 per kWh.
  • The ministry also reduced the cap on the maximum subsidy on an electric two-wheeler’s ex-factory price to 15 per cent from 40 per cent.
  • Lower subsidy will reduce consumer interest and adoption, and will hurt the entire industry for a considerable time.
  • The premium bikes will see the biggest decline in sales due to the subsidy cut.
  • The original equipment manufacturers (OEM) will rush to launch stripped-down models of their vehicles to keep the market shares running, and several players in the industry will follow the trend for keeping the market sentiment intact.
  • Further, The parliamentary standing committee on heavy industry highlighted that Phase 2 of the FAME scheme to subsidize electric vehicles has achieved only 51.96 per cent of its target.

Various measures taken by the government to promote electric vehicles

  •  Niti Aayog has prepared a battery swapping policy, under which it has proposed offering incentives to electric vehicles (EVs) with swappable batteries, subsidies etc
  • Government has set a target of electric vehicles making up 30 % of new sales of cars and two-wheelers by 2030.
  • To build a sustainable EV ecosystem initiative like –National Electric Mobility Mission Plan (NEMMP) and Faster Adoption and Manufacturing of (Hybrid &) Electric vehicles in India (FAME India) have been launched by India.
  • NEMMP was launched with an aim to achieve national fuel security by promoting hybrid and electric vehicles in the country.
  • FAME India Scheme was launched with the objective to support hybrid/electric vehicles market development and manufacturing ecosystem.
  • Implementation of smart cities would also boost the growth of electric vehicle

Way Forward

  • 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.
  • India needs to leap into EV battery manufacturing.
  • Private investment in battery manufacturing plants and developing low cost production technology is needed.
  • Need for a policy roadmap on electric vehicles so that investments can be planned.
  • 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.
  • Providing waiver of road tax and registration fees, GST refunds and free parking spaces for EVs.
  • There is also the task of bringing skilled professionals into the workforce that are knowledgeable about the benefits and advantages associated with electric vehicles.

SANSAD TV 29-5-24