By: Md Saddam Hussain, Senior Research Associate, Alliance for an Energy Efficient Economy
Amidst the urgent call to combat climate change, transportation emerges as a major emitter and a vital avenue for substantial emissions reduction, underscored by the recent UN Climate Change Report urging bold measures to cap global warming at 1.5 degrees Celsius.
However, per the report, current commitments fall short, particularly in the transport sector across continents. Embracing cleaner transportation solutions, such as electric vehicles (EVs) powered by renewable electricity, offers a viable pathway to reduce emissions drastically. The UN Climate Change Report underscores the critical role of electrification and low- or zero-carbon fuels in decarbonising transport, presenting an opportunity for transformative action.
Amidst this backdrop, transitioning to EVs emerges as a pivotal solution, yet hurdles persist, including high upfront costs, range anxiety, and inadequate charging infrastructure across the nation. Government-led initiatives such as the Faster Adoption and Manufacturing of Electric Vehicles (FAME) Scheme and the Production Linked Incentive (PLI) scheme have sought to incentivise the adoption of EVs. On April 1, 2024, India took a significant step by introducing the Electric Mobility Promotion Scheme (EMPS) to promote the adoption of electric two- and three-wheelers and to catalyse the development of a robust EV manufacturing ecosystem. With a minimum investment of approximately USD 500 million and no cap on maximum investment, it is a clear invitation to global players to invest in India’s growing EV market, signalling strong governmental backing for clean-energy technologies. However, a recent policy paper released by the Government’s Economic Advisory Council calls for more extensive policy intervention to overcome barriers hindering EV uptake.
While positive strides have been made, a more detailed and comprehensive policy framework is needed to effectively accelerate the transition to zero-emission technologies. This framework should encompass various aspects, including but not limited to:
Charging Infrastructure Development: Expanding the EV charging network is crucial, especially in urban centres and along major transport routes, to reduce range anxiety and promote EV integration. As of February 2, 2024, India has 12,146 operational public EV charging stations, up from 6,586 on March 21, 2023, with Maharashtra and Delhi leading. However, these stations are unevenly utilised, with some being underutilised and others overutilised, highlighting the need for strategic placement. According to NITI Aayog, factors such as the EV mix and urbanisation impact charging needs, with estimates of required stations ranging from one per 20 EVs to one per 150 EVs.
Consumer Awareness and Confidence: Consumer confidence is crucial. A mandate ensuring that manufacturers are responsible for providing essential parts like batteries for their EV models, even after their discontinuation, would go a long way in building consumer trust. According to a McKinsey study, 70% of India’s top-tier car buyers consider an EV for their next purchase, higher than the global 52%. Interest leans towards battery EVs (49%) over plug-in hybrids (21%). Among two-wheeler buyers, 86% prefer EVs, mainly for environmental reasons, compared to 69% considering conventional engines. This trend reflects a growing priority for sustainability in Indian consumer choices.
Increasing EV Share in Government Fleets: Increasing the share of EVs in government fleets is a strategic move to promote EV adoption. Mandating that all new government vehicles be electric, providing incentives for government employees to purchase EVs, and installing charging infrastructure, sets a strong environmental commitment. Although government vehicles represent less than 1% of total EV targets, their conversion is significant due to the direct control agencies have over these assets. Inspired by the Delhi government, which began transitioning its fleet to electric in February 2021, this policy not only ensures steady industry demand but also serves as a model for other sectors, expecting to generate demand for around 2,500 EVs.
Increasing EV Share in Public Transportation: Increasing the share of EVs in public transportation can significantly reduce emissions, leading to considerable environmental and economic benefits. According to a report by the Council on Energy, Environment, and Water (CEEW), electrifying public transportation contributes to environmental benefits such as decreased emissions of particulate matter, nitrogen oxides (NOx), and carbon monoxide (CO), which are common pollutants from diesel and petrol vehicles. This reduction in emissions would not only help in improving air quality but also in reducing the overall carbon footprint of the transportation sector. Economically, this shift could save approximately USD 14.1 billion annually by 2030 in crude oil imports. Additionally, the transition is projected to generate significant job opportunities in the EV manufacturing sector, including battery production and charging infrastructure development, while also offering long-term operational cost savings over traditional diesel buses.
By implementing these measures and fostering collaboration between government, industry, and citizens, India can accelerate its transition to sustainable transportation and emerge as a global leader in clean-energy adoption. The urgency for action has never been greater. For a nation poised on the brink of environmental crisis, the path forward is clear: a steadfast commitment to sustainability and clean energy is not just an option but an imperative.
(Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited).
