Moving Ahead with Electric Mobility in India

Guest blog by Charu Lata

With 21 of the world’s 30 most polluted cities, electric mobility is a major opportunity to improve air quality in India. New Delhi, one of top polluted cities, recently announced its draft electric mobility policy. Leading automobile companies, utilities and states are getting more active on advancing electric mobility in India. Even the Indian Parliament is holding special session on electric mobility.

EV Charging Station in New Delhi

NRDC

The transport sector is a significant and growing contributor to spiking air pollution in India. In 2015, transportation tailpipe emissions attributed for 1,800 premature deaths in New Delhi. Electric mobility solutions are essential to reducing emissions from the transport sector – both for air pollution and climate change.

The New Delhi EV policy aims to have 25% of all vehicles sold in Delhi to be electric by 2024. The New Delhi EV policy is a direct response to the staggering air pollution levels in the city. The EV policy highlights programs for two-wheelers, shared transport vehicles, and commercial vehicles. New Delhi joins over 10 states working on electric mobility policies. Key states of Gujarat and Telangana have yet to release their policies, even discussions at the highest levels and several stakeholder consultations have been held by the government along with knowledge partners NRDC along with partners the Administrative Staff College of India (ASCI) and the Gujarat Energy Research and Management Institute (GERMI).

During the Auto Expo 2020, Indian automobile manufacturers displayed their best EV options in all classes—from affordable to luxury including various vehicle categories like two wheelers, cars and buses. Domestic brands, such as the Tata Altroz and Mahindra eKUV100m, to global brands, such as Renault City K-ZE, MG Marvel X and Kia Soul EV showcased their latest EV models.

Utilities and key experts recently came together for the “Distribution Utility Forum”, hosted by the Shakti Sustainable Energy Foundation and The Energy and Resource Institute (TERI) in February in Bangalore. Utilities are central to advancing electric mobility given their vital role in building out the charging infrastructure needed to support the EV market. The forum brought together CEOs and other senior management of distribution utilities across India to sharing experiences, views, and solutions on electric mobility challenge facing the distribution sector. NRDC along with partners ASCI and GERMI, presented our work on a sustainable business models for charging infrastructure and paper on siting approaches with practices from the United States, China and elsewhere.

Parliamentary Questions

To unpack EV programs and market readiness, both Houses of Parliament in India, the Lok Sabha and Rajya Sabha had special sessions on electric mobility. Here are highlights of the sessions and suggested responses.

Question: Is the current electrical infrastructure in the country capable of supporting a large-scale shift to electrical vehicles?

Answer: A robust electric power system is the one of the key infrastructures needed for economic growth in a developing country, such as India. The Indian power system has drastically grown in size and capacity in the last ten years. To assess whether the current transmission and distribution infrastructure in the country is capable of supporting large-scale shift to EVs, a detailed step wise power system analysis needs to be conducted.

Question: What measures are being taken to manage the increase in load that will be caused by an increase in electric vehicles?

Answer: The Indian government is promoting two important measures to manage the EV charging load. The first measure promotes the use of renewable energy to charge electric vehicles, which will reduce the load on transmission and distribution network. Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) links renewable energy sources with electric vehicle charging infrastructure. However, the Government has not yet provided any additional incentives for renewable energy powered charging stations. The second measure includes introducing Time of Day (ToD) charge for EV charging. A ToD charge aims at shifting the increase in electric load/demand due to EV charging needs away from peak hours to non-peak hours (like during night time) through incentives for night-time charging. This helps in reducing the expected peak power demand and help manage the load on the electric grid. A few states like Telangana and Delhi have already introduced ToD charges for electric vehicles by reducing the price of electricity for EV charging at non-peak hours. Central Electricity Authority (CEA) is also planning to come out with a guideline for distribution utilities on setting ToD chargers for EVs. Vehicle-to-grid integration (VGI) studies can be another measure that can be undertaken in the future to manage the increase in load due to electric vehicles. VGI is a system in which plug-in electric vehicles can communicate with the power grid by either returning electricity to the grid or by varying their charging rate.

Question: What are the number of public charging stations for electrical vehicles in the country?

Answer: As of November 2019, Energy Efficiency Services Limited (EESL) has installed 65 public chargers and commissioned 300 AC & 170 DC captive chargers across all offices where EVs have been delivered by EESL. Also, National Thermal Power Corporation (NTPC) has installed 57 number of public chargers and more than 55 chargers at all its regional and corporate offices.

Question: Is the government implementing any programs to increase the number of charging stations in the country?

Answer: The Department of Heavy Industry approved setting up 2,636 electric vehicle charging stations across the country in January 2020 under the FAME II scheme, a national incentive program for promotion of electric and hybrid vehicles. Thirteen states, including Delhi, Gujarat, Telangana and Karnataka, along with private companies are moving forward with electric mobility plans in India. The central government in India has introduced a number of programs and guidelines for standardizing and incentivizing the deployment of chargers in the country such as DHI’s FAME II scheme and MoP’s Guidelines and Standards for Charging Infrastructure.

Question: The steps taken/being taken by the government to encourage people to switch over to the electric vehicles in the country

Answer: The Government of India’s push to increase the share of electric vehicles in India is predicated on its goals to improve India’s energy security, air quality improvement and industrial competitiveness. The government has come out with a number of fiscal and non-fiscal measures to encourage faster adoption of EVs. Some of these measures are:

  • Faster Adoption and Manufacturing of Electric Vehicles in India: Phase II (FAME-II) scheme was launched in April 2019 with total fund allocation of INR 10,000 crores (~1.4 billion USD) for 1.6 million EVs for 2019-22. FAME II incentivizes EV adoption for shared mobility in India. INR 1000 crore has been allocated for establishment of EV charging infrastructure.
  • Union Budget 2020 Incentives, the Government has proposed to hike customs duty on imported electric vehicles to boost indigenous manufacturing of EV components and vehicles.
  • Union Budget 2019 Incentives: Goods and Services Tax reduced from 12% to 5% on EVs and from 18% to 5% on charging infrastructure; oncome tax rebate of up to INR 1.5 lakhs (around USD 2,200) to consumers on interest paid on loans for EV purchase; customs duty exemptions on parts exclusively used in EVs (for example e-drive assembly, on-board charger, e-compressor, and charging gun).
  • Ministries have introduced complementary fiscal and non-fiscal incentives like green license plates, registration fee exemptions, road taxes waivers on EVs, EV charging as a service, tax-exempt buses, building bye laws to support EV charging
  • States governments are providing a number of incentives like capital subsidies on EVs, exemption of State GST (SGST), road tax waivers, manufacturing incentives on land, energy, water etc.
  • Introduction of National Mission on Transformative Mobility and Battery Storage which provide incentives for setting up large scale indigenous battery manufacturing plants.

These are positive measures to advance electric mobility in India while also aiming to improve air quality. Yet, much more needs to be done to build a robust electric mobility ecosystem in India in the next decade.

Charu Lata is a consultant working on electric mobility with NRDC based in New Delhi.

About the Authors

Anjali Jaiswal

Senior Director, India, International Program

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