India’s Sputtering Electric Vehicle Ambition Needs Direction

India, which has had a wobbly start to its electric vehicle journey, is planning a national policy to push battery-powered transport as the industry awaits clarity.

“We will unveil discussion papers during the Mobility Summit [on Sept. 7-8] to seek comments,” said Amitabh Kant, chief executive officer of the NITI Aayog. The policy, he said in New Delhi on Sept. 3, will be framed based on feedback from stakeholders.

“76 percent of automobiles in India are two-wheelers which consume 64 percent of fuel, causing 30 percent of pollution,” Kant said. The government, according to him, will push for electrification of shared mobility and two-wheelers first, and personal cars at the end.

India seeks to turn 30 percent of vehicles battery-powered by 2030 to cut oil import bill and improve air quality. Yet, the government is still to frame a road map for electric transport and charging infrastructure. To complicate things, policymakers have been contradicting each other. And it began with a lofty ambition of 100 percent electric mobility by 2030.

Confusion

In March 2017, according to a Press Information Bureau statement, then Power Minister Piyush Goyal spoke about Prime Minister Narendra Modi’s dream of converting most, if not all, vehicles electric by 2030.

The International Energy Agency called that “ambitious” and automakers demanded a road map as it entailed investments in infrastructure and manufacturing—given that the deadline was less than a decade-and-a half away. What followed was confusion.

Admitting that it was a daunting target, Goyal in August last year, according to a PTI report, said, “NITI Aayog is currently tasked with preparing futuristic vision for electric vehicles.”

Union Minister for Road Transport and Highways Nitin Gadkari, however, said in February 2018 the country doesn’t need an electric-vehicle policy but only an action plan. Kant had then said the NITI Aayog was preparing the plan that will be monitored by different ministries.

A few weeks later, Rajiv Kumar, vice chairman of the planning think tank, joined the debate, reiterating the need for an electric vehicle policy.

Amid this, the government scaled down its target to turn 30 percent of vehicles electric by 2030—denying having set the 100 percent goal at all.

Emailed queries to NITI Aayog, ministries of road transport, heavy industry, and science and technology remained unanswered.

To be sure, India launched a Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles with an outlay of Rs 795 crore for two years starting April 1, 2015. It was later extended till the end of this month. The scheme offered buyers a reduced purchase price as an incentive.

If the government can’t change the scheme, it should just continue with it, Pawan Goenka, managing director at M&M, had told BloombergQuint. Electric vehicles are ready to take off in shared mobility and corporate fleet but not personal use, he said.

Also, the goods and services tax on electric vehicles is 12 percent compared with the highest 28 percent rate with a cess of up to 22 percent on conventional vehicles. The rate on lithium ion batteries has been lowered to 18 percent from 28 percent.

Kant on Sept. 3 said that 80 percent of economic opportunities lie between battery packs and fuel cells. “We should try to capture the market. The objective should be to manufacture fuel cells in India.”

Yet, before companies commit investments, India also needs charging standards for high-powered electric vehicles.

Why Fast-Chargers

The Ministry of Power in March clarified that charging will be a service, not sale of electricity. That helped cross a regulatory hurdle as the Electricity Act only allows distribution companies to sell power to consumers. The Department of Heavy Industries then came out with to Bharat EV (AC and DC) standards for vehicles with battery power of less than 100 volts.

Automakers await the fast-charging standards that will allow global carmakers to launch their battery-powered models in India. The choice is between the European Combined Charging System and Chademo.

The Combined Charging System is used by Volkswagen Group, Ford Motor Co., Daimler AG and General Motors Ltd. in the U.S. and Europe. Chademo is being pushed by Japanese auto giants Suzuki Motor Corp. and Toyota Motor Corp.

The task of finding the new standards has now landed with the Department of Science and Technology. And it’s expected to come out with the choice by November, according to senior official who didn’t want to be identified.

In the absence of the standards for high-powered chargers, EESL earlier this year cancelled its second tender to buy 10,000 electric vehicles for government departments. Even from its first tender bagged by Tata Motors Ltd. and Mahindra & Mahindra Ltd. in October 2017, only around 200 cars out of the planned 10,000 sedans have been delivered.

The current standards for chargers aren’t viable for cars with high capacity, Saurabh Kumar, managing director of EESL, told BloombergQuint over the phone. “As a country, it’s necessary we have chargers that cater to all kinds of car segments—be it small cars, sedans or luxury cars.”

Dave Yoshida, secretary-general, Chademo, said it has responded to the government’s requests for public comments. The Japanese lobby suggested a multi-standard network that can charge both existing low-voltage electric vehicles and also higher-powered batteries.

Fast-chargers replenish 80 percent of the battery in 20 minutes for most cars. The existing chargers in India, according to EESL’s Kumar, will take 24 hours to fully charge a Tesla car with a 100-volt battery.