Co-authored with Charu Lata and Shabib Ansari
With chronic traffic congestion and skyrocketing air pollution, leading states in India are looking to electric vehicles as a key solution. States, such as Telangana, are developing EV policies to work in parallel with the newly launched national EV and mobility policy, FAME II.
The FAME II program allocates ₹10,000 crore ($1 billion) for capital subsidies to 2 and 3 wheeler EVs, vehicle fleets, and for EV charging infrastructure. This is just the start of the EV opportunity in India. Considering that India has 28 cars for every 1,000 people, as compared to the United States or Europe that have over 850 cars for 1,000 people, the opportunities to lock in energy savings, combat pollution and fight climate change are tremendous.
Many states are now in the process of updating their draft state EV policies to include the provisions and incentives under FAME II. The Department of Heavy Industries (DHI) has invited expressions of interest (EoI) from state transport departments for the deployment of 5,000 electric buses. Gujarat, Uttar Pradesh, Rajasthan and Kerala are a few of the states that have already submitted proposals to the government to purchase electric buses under the FAME-II program.
Telangana EV Policy
With FAME II released earlier this year, Telangana is in the final stages of releasing its EV policy with a recent stakeholder consultation in Hyderabad. Telangana’s draft EV policy builds on ambitious goals, including 100 percent electric public transport and shared mobility services by 2030 and the creation of 50,000 jobs by 2022.
The EV market in Telangana is already moving with the signal of upcoming government policy. In the capital city Hyderabad, for example, Uber and Zoomcar are integrating 75 Mahindra EVs into their existing fleet of cars. The IT industry in Hyderabad is championing EVs with companies such as Wipro and Cognizant introducing EVs in their corporate fleet. Hyderabad currently has 30 EV charging stations with plans to work with EESL to set up another 50 stations.
To further develop the draft Telangana Electric Vehicle Policy 2019, Telangana’s Industries & Commerce Department held a stakeholder consultation in Hyderabad last month. A wide range of stakeholders participated in the workshop, including state government departments, civil society, manufacturers (EV, charging infrastructure and battery companies) and EV service industry (mobility companies, charging infrastructure, and service providers). NRDC and our partners, the Administrative Staff College of India (ASCI), are knowledge partners working with the state and convening a series of workshops.
During the Hyderabad stakeholder consultation, Principal Secretary Jayesh Ranjan expressed that the state is very keen on moving towards electric mobility and that the state has been applauded by stakeholders for the draft EV policy. Telangana aims to gear up on e-mobility as an opportunity to expand manufacturing in the state.
Stakeholders highlighted three major drivers for e-mobility:
- Improved EV models in the market
- State government incentives to support charging stations
- Lower battery cost (which are approximately 40% of the vehicle price)
To develop the national market for EVs, vehicle manufacturers expressed the need for demand assurance from the government. Vehicle manufacturers discussed the availability of raw materials, auto component manufacturing, vehicle manufacturing specific to Indian requirements (more representation of 2-wheelers), availability of enough charging stations, skilling and battery recycling and disposal.
Battery manufacturers emphasized that to meet the FAME II EV deployment targets, 70 GW of batteries are required. Some stakeholders highlighted the need to standardize batteries to achieve economies of scale, whereas others said that standardizing would curtail innovation. Another view was to not subsidize EVs but provide incentives for the batteries as the subsidy provided will eventually be passed to the OEMs. Other critical issues with regard to EV battery manufacturing included the high price of cobalt in India and the large proportion of raw material imported from outside the country.
During the discussion, the Telangana State Renewable Development Corporation (TSREDCO), which is the nodal agency for developing charging infrastructure, indicated that it is taking industry inputs for locating charging stations to maximize utilization. TSREDCO is also planning to set up 250 charging station over the next three years in Hyderabad, Warangal and Karimnagar. The state DISCOMs are also geared up to support on the grid stability.
NRDC and ASCI presented on the “Charging Infrastructure Policy Landscape” in India and internationally. The presentation focused on the need for the EV policy to focus on creating charging infrastructure given its critical role in India’s EV ecosystem. As discussed during the workshop, China and the United States have ramped up efforts to invest in the EV charging infrastructure along with focusing on electric vehicles. To support Telangana’s efforts to expand charging infrastructure, NRDC and ASCI are developing charging infrastructure business models that will allow utilities and charging companies to assess the financial viability of charging infrastructure and identify policies and business models to maximize revenue and value while minimizing costs.
Electric-mobility is an important opportunity to reduce pollution and address climate change. Engaging a wide-range of stakeholders, such as the recent Hyderabad meeting, is essential to growing a successful EV market in India.
Charu Lata leads NRDC’s EV work based as a consultant in New Delhi.
Shabib Ansari is an NRDC-Duke-Stanback summer fellow working with the India team.