Govt must catalyse electric mobility

Ashish Kundra | Updated on September 22, 2021

Apart from subsidy support for manufacture and purchase of EVs, govt funding will be required for charging infrastructure

Henry Ford’s Model T introduced a new dynamic in human mobility. Tesla’s Model S is an equally significant milestone. Both will be remembered in the pages of automobile history, albeit for different reasons. The former ushered in mass car production; the latter embodies sustainability.

Climate change and skyrocketing fuel prices have pushed the boundaries of innovation in recent times. Vehicles must not only ride faster, but also be less polluting. Gas guzzlers must make way for smokeless, noiseless machines. Indian corporates have read the tea leaves. The future is electric. Every other week, newspapers herald the rise of a new EV start-up. Two-wheelers to buses, everything runs on batteries.

The EV revolution is as significant a disruption as the one seen by the electronic hardware industry in the last century. Moore’s law saw the exponential rise in computing power of electronic chips. Battery technology is the holy grail now. The inevitability of electric mobility transition has compelling economic logic. Its acceleration, however, needs active government support.

Conventional fuel vehicles have acquired a level of maturity over the last hundred years. A range of options are available for a discerning customer. Not so for electric vehicles. Battery technologies are still evolving. This adds uncertainty and risk. A purchase today could become obsolete in a few months. Public charging infrastructure is inadequate, adding to an inherent ‘range anxiety’. EV prices continue to be higher than comparable fossil fuel vehicles, even though operating costs are far lower.

Support needed

This is where the catalytic role of government is crucial. Manufacture and purchase of EV will need sustained subsidy support for a while. Public charging infrastructure also requires government funding, before the private sector steps in. A publicly funded brand communication strategy would encourage fence-sitters to go electric.

The FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme provided a boost for OEMs. State governments, such as Delhi, topped it up with additional purchase subsidies, reduced compliance requirements and tax waivers. An ambitious ‘Switch Delhi’ branding campaign was launched earlier this year, to build awareness.

The results are most visible in the two-wheeler segment. Sales, across the country, grew seven-fold over the last five years. In Delhi, the growth has been exponential: from just 18 two-wheelers sold in 2016 to more than 1,100 last year. The numbers have crossed 2,500 already in 2021, with five months to go. Even so, this is barely touching one per cent of total two-wheeler sales.

Electrification of bus fleet is a harder proposition. The distance range to which a bus can ply in a single charge varies tremendously across manufacturers. This makes procurement challenging. Infrastructure upgrade at bus depots to enable overnight charging is time consuming and has a dependency on local power grid. Perhaps hybrid depots, which house both CNG and electric buses, could offer a solution for efficient space utilisation.

The good news is that manufacturers are investing in upgrading technologies, which are mostly imported for now. Cities like Pune, Ahmedabad, Hyderabad and Navi Mumbai have taken the lead in electrification of buses. Delhi has also committed to make at least half of its bus fleet electric over the next three years.

Municipal bodies in Delhi have partnered with public sector undertakings for creating charging infrastructure in locations with higher footfalls. The Delhi government is also setting up charging infrastructure at 100 locations across the city. Geo-coordinates of all charging infrastructure have been mapped on a common mobility app — ONE Delhi. In due course, much like mobile towers, battery charging and swapping infrastructure will flow from private investments. The catch lies in attaining a critical mass.

Fleet aggregators and last mile delivery companies can spearhead the electric mobility revolution. They also stand to gain the most in terms of lower operating costs. However, most of the vehicle owners on the aggregator platform represent the gig economy. They tend to switch jobs easily and usually own cheaper, more polluting vehicles. A demand push by large aggregators and fleet owners, backed by a regulatory nudge could help hasten the transition. Purchase incentives offered by these companies, over and above government subsidies would help in rapid fleet electrification. Delhi government has mandated that new acquisition of vehicle fleet, whether by replacement or addition will be purely electric.

The initial push for electrification will come from the cities. Neighbourhood transportation needs are easily manageable on this mode. Last mile connectivity options, including electric three-wheelers and e-rickshaws offer viable solutions. Micro mobility vehicles like YULU are gaining traction with the youth. Delhi metro has inducted 25 conductor-less feeder buses to its stations.

Sustainable funding is needed to ramp up the subsidy framework and charging infrastructure. EV infrastructure funding by companies should be considered as admissible activity under corporate social responsibility.

The next couple of years are crucial. Supply side incentives must be backed by a regulatory demand side push for the EV movement to sustain. Growing volumes will spur private investment in technological innovation and manufacturing.

The writer is Principal Secretary Transport, GNCT of Delhi. Views are personal

Published on September 22, 2021

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