19/05/2020 - Infrastructure

KEY POINTS

·         The automobile industry had been battling against a host of issues—declining consumer demand, difficulty in transitioning into BS-VI technology, extinguishing inventories of left-over BS-IV vehicles, and credit crunch in the NBFC sector.

Indian scenario

·         The EV industry in India managed to post a decent 20% increase in sales in FY20 compared to FY19.

·         From a tax point of view, the GST council reduced the rates from 12% to 5% for vehicles, and from 18% to 5% for vehicle chargers. The Delhi 2019 e-Vehicle Policy aims at introducing more than 35,000 e-vehicles, and adding capacity of 250 charging and battery-swapping stations.

·         The National Electric Mobility Mission plan 2020 (NEMP) is also aligned similarly. The Kerala government has brought in a major policy shift, instructing all its departments to purchase only e-vehicles from the next financial year.

·         Schemes like FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) have certainly incentivised local manufacturing and the growth of domestic technology.

·         As global supply chains have been disrupted due to the crisis, the requirements of lithium-ion cells will be addressed by the upcoming 40 GWH of installed Li-ion capacity plants in India, which itself is a great opportunity.

·         Commercial advantages should lead to a surge in the usage of e-rickshaws and e-carts in short distance logistics, and last-mile connectivity in the e-commerce segment.

·         Given that personal mobility is going to pick up again post-Covid, there should be a further policy push (beyond what has already been announced in successive budgets) for a visible shift towards increased EV adoption, particularly since consumers are seeing the benefits of a cleaner environment.

·         Banks should devise innovative credit schemes (now that repo rate is low) to push for such a shift. Simultaneously, the government should focus on augmenting the charging infrastructure and have in place a scrappage policy that drives new-vehicle sale.

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In the post-Covid world, electric vehicles will be key not only to breathing new life into the automotive sector( which was experiencing a slowdown well before the corona crisis) but also to decarbonise the transport sector.

>>> Electric vehicles and its importance : 

- Electric vehicles (EVs) are an important part of meeting global goals on climate change. They feature prominently in mitigation pathways that limit warming to well-below 2C or 1.5C, which would be inline with the Paris Agreement’s targets.

- By 2030, our government aims to make India a 100-per cent electric-vehicle nation. Electric vehicles(EVs)  could be a better alternative to fuel-based automobiles to mitigate air pollution.

- Some studies shows that;

•  emissions from EVs have emissions up to 43% lower than diesel vehicles

• EVs have lower lifetime climate impacts than those with internal combustion engines.

>>> Challenges : 

- However, while no greenhouse gas emissions directly come from EVs, they run on electricity that is, in large part, still produced from fossil fuels in many parts of the world. 

- Energy is also used to manufacture the electric vehicles – and, in particular, the battery (lithium ion battery).

               Thus, to decarbonise the transport sector and achieve target of complete green mobility by 2030, electricity generation will become significantly less carbon-intensive, further increasing the advantage of electric vehicles over conventional ones.

However, it needs to be considered as an option in a wide range of possibilities at our disposal to meet this challenge. 

These options include also non-technological alternatives that together with the technological ones need to be considered in a holistic approach.

>>> Conclusion :

The goal of any sustainable transport policy is to ensure that our transport systems meet society's economic, social and environmental needs.