EV Policies – Getting ready for the next decade | The Financial Express

EV Policies – Getting ready for the next decade

The primary objective of government policies should be to promote technology agnostic clean mobility. It is important to let the industry develop commercially viable technology to meet the objective of emissions and carbon reduction.

EV Policies – Getting ready for the next decade

Rahul Mishra

A few years back, an affluent political leader bought a luxury sedan and he also received subsidy for that purchase because the luxury car happened to be strong hybrid electric vehicle. Instances like this, raised questions about the need for subsidies, the requirement of beneficiaries and impact that tax-payers’ money was creating. This was also the time when a prominent government scheme for electric mobility was being reviewed for its next iteration and several questions about the role, effectiveness and impact of policy in promoting electric mobility, were being evaluated:

  • Are policies focused on output and creating and measuring impact?
  • Should policies drive clean mobility as an outcome or should they promote specific technologies – electric, hygrogen, bio-fuels, gas, etc?
  • Is subsidy the easiest and the best form of policy intervention and is that the best use of tax-payers money?
  • Polices can provide the initial support but is the industry becoming self-reliant?

Electric mobility was one of the earliest bet that India took to promote clean mobility. We have come a long way since then. Industry push, consumer awareness, improving economics, global trends and most importantly policy push played a pivotal role. Policies at the Central and State government level have tried to create an impact in their own way. As we complete a decade, it is high time to assess the role of our polices across states and calibrate then to create a One India One Policy for electrification.

The primary objective of government policies should be to promote technology agnostic clean mobility. It is important to let the industry develop commercially viable technology to meet the objective of emissions and carbon reduction. 

Subsidies may be the easiest and the most visible form of policy intervention, but is there a better impact that can be created. Subsidies can not be the long-term answer. The industry needs in invest, build capabilities and scape to compete globally and public money is best spent in enabling the research and manufacturing eco-system. 

Policies also need to be harmonized across central and state governments. Over the years, several state governments came out with their own state specific EV policies. A first look indicates that the coverage of these polices has not been consistent across demand, supply, charging and technology related areas. Across the central and state policies, the structure and quantum of incentives have been different. Another prominent issue seems to be choice between what is easy versus what is most impactful. Many state policies are still focused on promoting formats like e-rickshaws over other better higher impact segments. The question is – will this segment define the future of electric mobility in India? Some state policies still lean on the usage of hybrid vehicles while the nation decided to leapfrog to fully electric mobility. Finally, none of the policy guidelines defines the markers for successful execution as there is no mechanism to measure the effectiveness and impact of these policies. 

We have now seen a few years of electric mobility and now have more data on products, performance and user experience which should form a basis of any refreshed policy guideline. The charging ecosystem has been growing with several players and business models in the market. We need to relook at the charging standards announced sometime back and possibly get them in line with global markets. Policies should focus should on future ready specifications, type of chargers, cost of hardware, interoperability and platform integration. With the planned incremental generation capacity, power availability would not be a challenge however quality and unit economics would be important for charging infrastructure business. 

As the awareness and adoption of e-mobility has increased, the industry has become more conscious about emerging issues of e-waste management, vehicle and battery afterlife and second life usage of battery. Lithium and advanced chemistry batteries will need an organized and environmentally sustainable process for recovery, recycling and reuse. We need to acknowledge the issue and put in place mechanisms to grow the afterlife segment as an organized industry. 

Finally, for scale and standardization to drive network effects in areas of charging and battery swapping, it will be important to establish a greater level of alignment at industry level. While a uniform policy will set the direction, it is really the industry that will have to collaborate on technology and content standardization to drive scale and interoperability. Commercial viability is key to drive growth in electric mobility but policies play an equally important role in realizing commercial viability faster. Our next sprint of policy formulation needs create a uniform, future-ready environment and put the necessary guardrails to define the next decade of clean mobility 

The author is Rahul Mishra Partner, Kearney

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.

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