Articles > Who will lead Indiaís
transition in adopting electric vehicles
Who will lead Indiaís transition in adopting electric vehicles
Asian Age, October 30, 2018
By Pradeep S Mehta and Samir
According to the
World Health Organisation, 14 of the planetís 15 most polluted cities
are in India.
In order to reduce rising oil imports
and greenhouse gas emissions, the government of India is considering a
30 per cent penetration of electric vehicles (EVs) across two-wheelers
and four-wheelers throughout the country by 2030. It has been
providing substantial support in that endeavour. However, catapulting
this transition from fossil fuel-based towards electric-based
transport systems will also require altering the mobility-related
In order to overcome the inertia and motivate consumers to opt for
electric vehicles, both the Union and state governments are
considering numerous options to prepare the industry for this mass
transition towards EVs.
However, consumersí willingness to purchase still remains a rather
grey area. The move towards the electric mobility space cannot be
successful unless consumers are convinced about the benefits of a
sustainable mobility transition.
In March 2015, the government had launched the FAME (Faster Adoption
and Manufacturing of Hybrid and Electric Vehicles) scheme with the
objective of promoting the purchase and usage of electric vehicles in
the country. The policy was extended till the end of September 2018.
Under this scheme, the government has given financial support for
electric or hybrid vehicles worth Rs 256.93 crore. Further, a grant of
`280 crore has been sanctioned for nearly 500 electric buses in nine
major cities in the country.
The government is currently scaling up its efforts by revising the
FAME scheme and coming up with a new version to push the promotion of
EVs. FAME-II will have a much bigger corpus of `9,300 crore for five
years. The government is also considering liberalising import norms by
removing the restrictions on price and engine capacities, as well as
the mandatory local testing conditions to encourage more global
players. Recently, the government slashed the GST charges for electric
batteries. Fringe benefits such as green number plates, and a
deduction in toll and parking charges are being explored and expected
to be implemented soon.
Be that as it may, even this humongous effort may not suffice for a
substantial transition to electric mobility. Despite the large amount
of subsidy during FAME-I, the uptake of electric vehicles, especially
among private car owners, still remains abysmally low. In the absence
of a clear government policy nudge, the sluggish move towards electric
mobility is being driven only by personal choice and the concurrent
rise of oil prices in the international market.
Albeit, the biggest challenge for the mass adoption of EVs isnít only
the lack of adequate charging infrastructure, range anxiety (mileage
between each charge) and the higher initial cost compared to fossil
fuel variants. It is also the lack of public awareness concerning the
importance of shifting to a eco-friendly transportation model and its
associated benefits. In terms of the charging infrastructure, we are
seeing the choked petrol pumps dispensing CNG.
Thus, before the government continues to implement its master plan,
there is one big question it has to answer first: Will consumers bite?
Consumersí willingness to purchase is the most important factor for
the transition towards and mass adoption of electric vehicles. Hence,
it is crucial to understand the purchasing behaviour to predict the
variables which will influence the willingness of consumers and inform
policymakers and businesses alike.
In several market surveys, Indians have expressed their interest in
buying EVs. Yet this interest has not been translated into any
concrete action. While the upfront cost remains the major impediment
towards sustainable mobility transition, Indian consumers at the micro
level are also influenced by the lack of choices in the EV market.
Although most of the automobile manufacturers in India have pledged to
move towards electric mobility, at the moment there are only about ten
electric/hybrid car variants available in the market, compared to 54
in the US and over 100 in China.
Consumersí willingness to purchase EVs can be affected by several
factors which include internal factors such as demographics, social
influence, consumersí personal choices, etc, as well as external
factors such as performance, efficiency, service delivery, etc. A
range of non-technical and economic factors such as the symbolism of
EV purchase, environmental prioritisation and so on can be
particularly important to EV consumers.
One way forward is to develop a standard for EVs under the environment
ministryís Ecomark, which is now being rejuvenated. Ecomark is a
market instrument which empowers consumers to push industry to produce
environmentally friendlier goods and services. Such labels are quite
popular in many developed countries of the world and are slowly
entering developing countries as well.
According to the World Health Organisation (WHO), 14 of the planetís
15 most polluted cities are in India. The transport sector accounts
for about 90 per cent of the GHG emissions and consumes about 15 per
cent of total energy, mostly sourced from coal, diesel and petroleum.
This sector has considerable potential for reducing energy use and
mitigating its impact on climate change. However, the governmentís
active stance will not produce the desired results unless it can
actually convince consumers to use it. Thus, while the government
needs to keep playing the role of being the driving force in its early
stages, mere doling out of subsidies without considering these
dynamics will not suffice. Indiaís dream of a climate-friendly future
hinges ultimately on its consumers, who need to lead the transition.
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