Having set a four-year time-frame to achieve the target of 25 per cent electrification of new vehicle fleet in Delhi, the Arvind Kejriwal government may have just bitten off more than it can chew. Despite the slew of incentives offered — waiver of registration fee and road tax and subsidy of Rs 1.5 lakh for new electric cars and up to Rs 30,000 for electric two-wheelers, e-rickshaws and freight vehicles, widespread public acceptance of electric vehicles is uncertain.
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Though the e-vehicle policy announcement on August 7th, based on wide-ranging consultations with experts from across the country and study of EV policies of several countries, has been welcomed by environmentalists, traffic analysts and citizens, questions persist about its implementation. According to Jyoti Seth, Deputy Commissioner (Transport), the policy has been notified with immediate effect and the Delhi government expects to register five lakh new EVs in the next five years.
Key highlights of Delhi’s EV policy
- A purchase incentive of Rs 5,000 per kWh of battery capacity, with the maximum incentive of Rs 30,000 per vehicle.
- Owner to get Rs 5,000 per vehicle for scrapping old ICE two-wheelers.
- Delivery services to gradually convert 100 per cent of its entire fleet to EVs.
- A purchase incentive of Rs 30,000 per vehicle (advanced battery)
- Interest subsidy of 5 per cent on loans and/or hire purchase scheme for e-auto
- Registered e-auto owner to get Rs 7,500 per vehicle for scrapping old vehicle.
E-rickshaws and e-carts
- A purchase incentive of Rs 30,000 per vehicle for purchase of one e-rickshaw and e-cart. Additionally, interest subsidy of 5 per cent on loans on vehicles with advanced battery.
- Conversion of 50 per cent of all new public transport vehicles with 15 seats or more by 2022.
- A purchase incentive of Rs 30,000 per vehicle for the first 10,000 e-carriers
- Interest subsidy of 5 per cent on loans etc. Registered e-carrier owner to get Rs 7,500 for scrapping old IC vehicles.
- A purchase incentive of Rs 10,000 per kWh of battery capacity, and maximum incentive of Rs 1,50,000 per vehicle shall be provided to the first 1,000 e-four wheelers.
Applicable to all vehicle segments:
- Complete waiver of road tax and registration fee for all electric vehicles.
- For swappable technology – if battery is not sold along with vehicle, then 50 per cent purchase incentive shall be provided to vehicle owner and the remaining 50 per cent to the energy operator.
But a huge question mark still hangs over setting up infrastructure, such as an adequate number of charging stations, despite CM Kejriwal’s promise of “creating 200 charging stations in the next one year, a charging station every 3 km.” Depending on the type of chargers used, the cost of an EV charging station ranges from Rs 1 lakh to Rs 40 lakh.
A state electric vehicle board, chaired by Delhi Transport Minister Kailash Gehlot, will be set up to implement the EV policy. Also, a dedicated EV cell and a state EV Fund will take care of expenditure.
But as of now, the policy has no answers to some critical issues: for example, whether it would be better to recharge the EV at the station, which would take 40-90 minutes, or change (swap) batteries. The batteries used depend on the manufacturer and make of vehicle, making a one size fits all system impractical.
Neither have safety questions, mainly over batteries overheating and catching fire, been addressed.
Then, of course, there is the question of actually how green EVs are. Some environmentalists have pointed to the ecological damage caused by mining for the precious metals that go into the making of these batteries. Also, EVs will increase electricity demand, which in India is largely from coal fired power stations, which are far from eco-friendly.
“The EV policy is a very important step,” said Anumita Roychowdhury, Executive Director of Centre for Science and Environment (CSE). “What is notable is its ambitious target at a time when there’s so much uncertainty because of the pandemic. Anything that we can do to make our vehicles zero-emission will give enormous health benefits.”
Referring to the VAHAN database of the Union Road Transport and Highways ministry, Roychowdhury said not only have overall vehicle sales come down because of the pandemic, EV sales have dropped by 93.4 per cent. In Delhi, this figure is around 50 per cent below the pre-pandemic level.
“This policy is comprehensive in that it’s got vehicle segment-wise incentives,” said Anumita, “It also talks about polluter-pays-principle with an increase in road tax and imposition of congestion tax on the ICE (internal combustion engine) powered vehicles, so that funds can be mobilized.”
Welcomed by EV makers, the Society of Manufacturers of Electric Vehicles (SMEV), said this would give more push than the Centre’s FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) incentives announced in March 2019, which had an outlay of Rs 10,000 crore.
“The Delhi policy is a benchmark for other states whose policies are based mostly on attracting manufacturers rather than catalysing demand,” said SMEV Director General Sohinder Gill.
Faster EV penetration
Anumita Roychowdhury pointed out that FAME II duration is until 2022 and hoped that the support this gives to introduce electric bus transport in all cities remains on track. “The Delhi EV policy provides additional incentives. Anyone buying an electric vehicle or bus in Delhi today will get Centre and state incentives.”
Under the FAME II scheme, the Centre has sanctioned Rs 8,596 crore worth incentives, of which Rs 1,000 crore will be utilized for charging stations. The Centre also allocated Rs 3,545 crore for purchase of 7,090 electric buses, Rs 26 crore for 20,000 hybrids, Rs 525 crore for 35,000 four-wheelers and Rs 2500 crore for 500,000 three-wheelers.
According to ratings agency ICRA, subsidies offered under Delhi’s EV policy could trigger faster EV penetration in the National Capital region. “It offers subsidies, waivers, and incentives on purchase of EVs and dis-incentivises use of conventional ICE-based vehicles,” the agency said in its statement of August 18th.
Union Road Transport and Highways minister Nitin Gadkari has however said that the shift to EVs will be a “natural progression” and there would be no specific timeline or directive to ban petrol or diesel vehicles.
Lack of charging infrastructure is one critical obstacle to mass EV adoption. The other is the high cost of EVs powered by lithium batteries, which are not made in India.
The Union Power Ministry has also revised norms for EV charging infrastructure. It has planned a phased installation of a network of charging stations so that there is at least one in a grid of 3 km x 3 km in cities and one every 25 km on both sides of highways. For inter-city travel and heavy duty EVs such as buses and trucks, fast charging stations are planned every 100 km on each side of highways.
Last month, Delhi’s Deputy Chief Minister Manish Sisodia inaugurated the capital’s first public EV charging station at Patparganj, in East Delhi, while Union Power Minister R K Singh inaugurated a public EV charging plaza at Chelmsford Club in Central Delhi.
The Patparganj station, branded PlugNgo, can charge four vehicles at a time in 40-90 minutes. The initial cost has been fixed at Rs 10.50 per unit and the tentative cost of running an e-vehicle is pegged at Rs 1.25-1.50 per km. Set up by the BSES Yamuna Power Ltd (BYPL), the charging station is expected to cater to 15-18 cars per day, a BYPL spokesperson said.
The EV charger is also integrated to a mobile application that allows customers to locate chargers. The discom plans to set up nine public EV charging stations in Delhi this year, which will be manned and maintained by the power company.