Electric vehicles hit a roadblock as Modi govt delays roll-out of 1000 electric cars

Modi government's plan to procure 10,000 electric cars has hit a major roadblock. State-run EESL confirms that if the demand for electric cars does not increase there will not be the third tender to procure electric cars.

By:Updated: May 30, 2018 6:14:05 PM
File Photo: Tata Motors delivers its first batch of electric Tata Tigor to EESL

In a major setback, Modi government has further delayed the plan to roll out thousands of electric cars in the country by almost a year. Government’s ambitious plan got wings when State-owned EESL announced a tender to procure electric cars for government employees but the plan has hit a major roadblock.

State-owned Energy Efficiency Services Ltd., which is responsible for procuring electric cars to replace the petrol and diesel vehicles used by government officials, will roll out the first 10,000 vehicles by March 2019, Saurabh Kumar, the agency’s managing director said. EESL issued its first tender for 10,000 cars in September. It planned to roll out 500 cars by November and the rest by June.

Also read: Electric Cars for Babus: Mahindra vs Tata Motors

“The need for building more charging points for 10,000 electric cars and states being slow in taking deliveries are the reasons for the delay,” Kumar said in a phone interview. There are about 150 cars in the capital New Delhi and about 100 in southern Andhra Pradesh state and other provinces as of now, Kumar said. Of the about 200 charging stations built for these cars, over 100 are in Delhi.

Prime Minister Narendra Modi’s administration is aiming to have more than 30% of vehicles run on electricity by 2030 in a bid to lower air pollution and curb reliance on fossil fuels. Cheap fossil fuel-driven cars and an absence of state subsidies for electric vehicles make purchases by the government and companies critical for EV sales, according to BNEF, which expects EVs to comprise about 7% of sales in India by 2030.

“These tenders are the largest drivers for EV demand” during the next three to five years, according to Allen Tom Abraham, a BNEF analyst in New Delhi. “If these large procurement programs falter, auto-makers would prolong any plans they have to introduce mass-market EVs in India.”

Tata Motors Ltd. and Mahindra & Mahindra Ltd., which had emerged winners in EESL’s first tender for electric cars, didn’t immediately respond to requests for comment. The government agency issued a second tender for 10,000 cars earlier this year.

“I have demand for 19,000 cars today and if I don’t get more, there won’t be the third tender,” Kumar said.

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