India’s electric vehicle (EV) market is poised for transformation and growth at a time when other sectors of the economy are struggling with slow growth in the wake of an economic crisis created by health pandemic COVID-19. The spread of coronavirus has brought into focus the adoption of non-mass and clean modes of transport. And EVs are a clear beneficiary of this shift in priorities with policymakers stepping in to facilitate faster adoption of such vehicles.
In recent times one of the most heartening news for EV manufacturers has come from the capital city of the country Delhi. To promote clean mobility solutions, the Arvind Kejriwal government in Delhi on 7th August launched the Electric Vehicle Policy for the city. Under the policy, the government announced a waiver of the registration fee, road tax on EVs. The government will also provide an incentive of up to Rs 1.5 lakh for new cars.
There are many firsts to the Delhi government’s Electric Vehicle Policy which are going to give a fillip to the EV market. One of the most appealing aspects of the policy is the feebate concept that it promotes. In all these years central and various state governments have been promoting EVs through demand incentives offering rebates but falling short of creating supply incentives.
For example, the open-permit system for electric autos in Delhi is aimed at cutting bureaucratic tape and encourages faster adoption of EVs. And it will promote zero-emission and green mobility and align well with India’s goals of reducing its oil-import bill and air-pollution.
Further, the Delhi government announced a “scrapping incentive” under the electric vehicle policy, a first-of-its-kind in the country. On the back of these incentives, the Delhi government has set aggressive goals for electrifying vehicles in the city. It aims to take up EV vehicle registrations from 0.29% at present to 25% by 2024.
The industry stakeholders welcomed the Delhi government’s electric vehicle policy for its holistic approach to boosting EV adoption. The policymakers have taken cognizance of the potential for the usage of EVs by fleet owners and e-commerce and delivery giants.
For example, under the policy, the Delhi government is offering an incentive of up to Rs 30,000 for electric two-wheelers, autos, e-rickshaws and freight vehicles. Such an approach will trigger long term structural changes in the demand pattern for EVs across vehicle categories and give a leg up to the adoption of EVs both in personal and shared mobility segments.
One of the upside in this is that just like the US where California is the bellwether for future vehicle policies, with its latest commitment to promoting EVs, Delhi can be a bellwether in India for promoting environment-friendly policies.
Even as Delhi government’s electric vehicle policy makes all the right noises and goes a long way in accelerating the adoption of EVs, the government would have done well to bring in more price differentiation between petrol and diesel vehicles vis-à-vis EVs.
Higher mark up for polluting vehicles would go a long way in motivating buyers to opt for EVs. The government could also have done well to encourage the mass adoption of EVs by increasing the number of vehicles eligible for subsidy over and above the current number of vehicles which is pegged at 1,000.
Keeping these policy shortfalls aside other states would do well to emulate Delhi Government’s electric vehicle policy and set the stage for mass adoption of EVs. Like the Delhi government which is going all out to boost charging infrastructure for EVs by setting up 200 charging points, other states too needs to take the lead in changing the status quo. They need to take some quick steps to become an active stakeholder in building a large network of charging points for EVs rather than leaving this much-needed task to EV manufacturers alone.
Author: T. Irfan Khan, CEO & Founder of e-mobility startup eBikeGO
Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.
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