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EV policy may be extended yet again

  • Published
    19th Dec, 2023
Context

In the absence of the new policy, the Delhi government is likely to further extend the existing one with only a few days left for its deadline, third time from its original date of expiry.

About

Implementation Delays

  • Draft of the new electric vehicle (EV) policy is still in progress, leading to further delays.
  • Officials consider extending the existing policy for the third time due to impending deadline.

Impact on EV Economy

  • The benefits for EV purchases, including rebates and subsidies, are set to expire, potentially affecting the positive environment for EV sales.
  • Despite the costliness of EVs, incentives fueled a 20% increase in sales during the first half of the current financial year.

Policy Extension Plans

  • A cabinet note is expected to propose a 3 to 6-month extension for the existing policy to maintain the supportive environment.
  • This marks the third extension, with the original policy expiring in August and subsequent extensions pushing the deadline to December 31.

Policy Development Challenges

  • The expected launch of Delhi EV Policy 2.0 faces delays due to the removal of project contributors following L-G's instructions.
  • Initial optimism for the new policy's completion before the old policy's expiration changed with the removal of fellows and researchers.

Timeline of EV Policy Implementation

  • August 2020: EV policy launched for a 3-year duration.
  • Nearly 20% share of EVs in vehicle sales achieved.
  • Extensions granted on August 7 and October 23.
  • EV Policy 2.0 aims to incentivize the retrofitting of vehicles from conventional fuels to electric mode.
  • Electric Vehicles help with better air quality, reduced noise pollution, enhanced energy security and in combination with a low carbon power generation mix, reduced greenhouse gas emissions.
  • India is a member of the Electric Vehicles Initiative (EVI), a multi-governmental policy forum dedicated to accelerating the deployment of EVs. The EV@30 campaign, launched in 2017, sets a collective aspirational goal for all EVI members to have EVs contribute to 30% of all vehicle sales by 2030.
  • In 2013, Government of India had launched a National Electric Mobility Mission Plan 2020. Under the mission plan, the Scheme for Faster Adoption and Manufacturing of (Hybrid&) Electric Vehicles in India (‘FAME India’) was launched in March, 2015 for two years as Phase-I, which has subsequently been extended up to 31 March, 2019.
  • Despite Central and State government incentives, pure electric vehicle penetration currently remains quite low in India, about 0.1% for cars, ~0.2% for 2 wheelers and practically nil for commercial vehicles.
  • This is largely driven by following critical hurdles: a) high upfront purchase price of EVs, b) almost non-existent public charging infrastructure, c) lack of products comparable to ICE vehicles (especially in the 2 wheeler category) and d) low levels of investment in EV manufacturing capacity
  • More than half of the EV sales worldwide were in China, where electric cars had a market share of 2.2% in 2017.
  • In the world’s most developed market for electric cars - Norway, electric cars accounted for 39% of new car sales in 2017.
  • EVs to reach upfront cost parity with internal combustion engine (‘ICE’) vehicles by 2025, largely driven by rapid reductions in battery costs.
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