Delhi government’s Draft Electric Vehicle Policy

Context

• Vehicular pollution has been a consistent source of air pollution in the National Capital Territory of Delhi. It contributes up to 30% of particulate pollution.
• Thus, in a move towards adopting a cleaner mode of transportation, Delhi government has launched draft electric vehicle policy.
• The policy addresses some of the major concerns that are required for rapid adoption of zero emission electric vehicles in the city.

About

• 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.

Background

• Electric vehicles: Battery electric vehicles use electricity stored in a battery pack to power an electric motor and turn the wheels. When depleted, the batteries are recharged using grid electricity, either from a wall socket or a dedicated charging unit. Since they don’t run on gasoline or diesel and are powered entirely by electricity, battery electric cars and trucks are considered “all-electric” vehicles.
• Internal Combustion Engine: It is a heat engine in which combustion occurs in a confined space called a combustion chamber. Combustion of a fuel creates high temperature/pressure gases, which are permitted to expand.
• The expanding gases are used to directly move a piston or the engine itself. Internal combustion engines can be powered by any fuel that can be combined with an oxidizer in the chamber.

Delhi government’s Draft Electric Vehicle Policy

• Since two-thirds of new vehicle registrations in Delhi comprises of two wheelers (i.e., motorcycles and scooters), with the most popular segments being motorcycles between 110-125cc and scooters between 90-125cc. Any attempt at electrification of Delhi’s vehicle fleet needs to address these segments.
• The draft policy will focus on incentivizing the purchase and use of electric two-wheelers and supporting the electrification of public/shared transport.
• The policy further encourages the usage of electric rickshaws, three wheeler goods carriers, app-based e-autos and e-cabs. For all for short first and last mile connectivity trips on e-cab/e-auto rides taken through an app-based aggregator, Delhi Gov. plans to offer ‘cash back’ rebates. These rebates will be capped at a maximum of 20% of the trip cost and an absolute value of Rs 10 per ride
• All petrol and diesel-powered vehicle users will pay a ‘Pollution Cess’ on the sale of fuel beginning with April 2019. A higher Cess will be levied on Diesel, being a more polluting fuel and a known carcinogen, and the existing Diesel Cess will be subsumed under this. The Pollution Cess will be reviewed and revised once every year to fund the increased subsidy bill due to higher adoption of Electric Vehicles.
• Air Quality Parking Surcharge will be levied on Base Parking Fees -BPF and applicable to all ICE vehicles only.
• Funding: ‘feebate’ concept has been explored i.e. by adopting measures by which inefficient or polluting vehicles incur a surcharge (fee-) while efficient ones receive a rebate (-bate).

Some important pointers:

• Experience in other cities across the globe indicates that availability of charging infrastructure is a key driver of EV adoption.
• EV batteries typically need to be replaced once they have degraded to operating at 70-80% of their capacities. EVs are therefore going to outlive the batteries powering them, with a vehicle requiring about two batteries in a 10-year life span. Batteries that have reached their end of life will need to be either reused or recycled. Lack of adequate reuse or recycling will have a high environmental cost. Not only do EV batteries carry a risk of giving off toxic gases if damaged during disposal, but core materials such as lithium and cobalt are finite and very expensive to extract.
• Encourage the re-use of EV batteries that have reached the end of their life and setting up of recycling businesses in collaboration with battery and EV manufacturers that focus on ‘urban mining’ of rare materials within the battery for re-use by battery manufacturers.
• Per kilometer cost for an electric car is just 85 paisa against Rs 6.5 for normal cars and this will also help India achieve autonomy from expensive petroleum imports.
• Job Creation: A large number of new jobs can be created due to increasing EV adoption – e.g., e - auto and e-cab drivers, charging station operators and EV service mechanics.

Is there a defined clean pathway?

• When driven, electric vehicles don’t produce tailpipe pollution—they don’t even have a tailpipe. However, the electricity they use may produce heat-trapping gases and other pollution at the source of its generation or in the extraction of fossil fuels. The amount of pollution produced depends on how the electricity is made.
• Due to high import duties on completely built units (CBUs) pricing of electric vehicles (EVs) is highly uncompetitive as compared with vehicles with internal combustion engines.
• To make EVs viable in India, the companies have been requesting the government to consider reducing the import duty on battery operated EVs so that they can compete with locally produced cars.

Past activities and future modalities:

• The ministry of transport had declared that India’s roads would be all-electric by 2030, only to go back on this promise within months. The new target -- for 30 percent of all vehicles to be electric by 2030 -- seems more than ambitious enough, especially given that India’s powerful automakers have over and over again demonstrated their ability to block or delay any regulations meant to address climate change.
• National E-Mobility Programme: implemented by Energy Efficiency Services Limited (EESL), aggregates demand by procuring electric vehicles in bulk to get economies of scale. These electric vehicles are projected to replace the existing fleet of petrol and diesel vehicles, With 20,000 electric cars, India is expected to save over 5 crore litres of fuel every year leading to a reduction of over 5.6 lakh tones of annual CO2 emission.
• Delhi government’s Draft Electric Vehicle Policy suggests that the price of electricity at charging stations shouldn’t be more than 15 percent higher than the average cost of supply for the location.
• Interestingly, public charging stations have been promised “open access” -- a term with fraught echoes in Indian economic history. Back in the early 2000s, the government tried to reform the power sector by saying that all consumers, anywhere, could shop around for the lowest tariffs available and then buy from that electricity provider, even if their local utility charged a lot more. The policy got tied up in litigation and was never really properly implemented.
• If power for electric vehicles manages to change that, it wouldn’t just help build an electric fleet — it might force reform in India’s power sector
• People setting up charging stations won’t need a license; anyone can do so. And domestic users will be allowed to charge electric vehicles at the electricity tariffs appropriate for households.
• Long before we all had mobile phones, the telecommunications revolution had already begun because of tiny little kiosks, mostly unlicensed, that sold long-distance phone calls. In India, the crucial constraint for charging stations would normally be getting hold of enough land to park cars for the time it takes to charge them. If anyone with a bit of spare space and electricity connection can run a low-cost charging station that might be able to solve the problem.

Way forward:

• Electric vehicles make a lot of sense in India as six Indian cities are declared by the World Health Organization (WHO) to be the most polluted cities in the world.
• The main disadvantage as of now with electric vehicles is the limited range that the EV’s offer. They need to be recharged before they can go further. Automakers would have to introduce Superchargers for their electric vehicle which should be available at many locations.
• Sponsor the establishment of research and innovation hubs with all the necessary facilities.
• Change the focus from non-renewable sources of energy such as fossil fuels for this electricity to renewable sources of energy such as wind and solar.

Practice Question:

Without the installation of charging stations, consumers will not be confident while investing in an electric vehicle. With reference to Delhi government’s Draft Electric Vehicle Policy, make a case for future of electric vehicles in India.