India’s New EV Roadmap Scaring the Automobile Industry Away

India’s Electric Vehicle policy has been a story of more misses than hits with the government yet to make up its mind with what to do despite three years of painful consultations between the government, and the industry. The mind boggling number of ministries involved has led to a complete policy confusion with no one sure of who is in charge. It took almost two years for Niti Aayog to be made in charge of the country’s EV policy with the ministry of transport, the department of heavy industries and the ministry of power all jostling to be the ministry in charge of EVs.

With the new government in place led by the BJP and PM Modi, it was hoped that the new roadmap of EVs would be quickly and efficiently put in place however that has not happened. The industry led by SIAM and the government is again at odds with the transport minister Gadkari siding with the industry. Remember Mr. Gadkari was the one who had last year said that there was no need for an EV policy and that each individual ministry should try to promote the industry in its own way. The industry had been up in arms with the new FAME policy because they felt that localization was too fast. This time the industry again feels that the movement towards electrification of transport is being too rapid and will not allow the industry to adapt in time. The industry too is divided with the large automobile makers which are mostly Japanese such as Suzuki, Toyota favoring a status quo while Indian automobile makers like Tatas and Mahindras want a fast move towards EVs.

Also, Read India pushes Electric Vehicles hard but Efforts not Bearing Fruits as of Now

The Niti Aayog in a report wanted all three-wheelers to be electrified by 2023 while two-wheelers should go EVs by 2025, however, this too seems too aggressive for the auto industry. Note that as per most analysts, the lifecycle costs of an electric version of two and three wheelers in India is already competitive to that of the fossil fuel versions. This means after three-five years, the lifecycle cost should be much lower for EVs than ICE versions. Given the huge pollution and fuel import problems that the country is facing, this seems an imminently practical policy. However, the strong auto lobby seems hell-bent on derailing this. India needs to rapidly move towards EV even as the world has already made huge strides. Remaining statist won’t work as technology is evolving rapidly. The Indian policymakers have already been too lenient by not bringing in cars and other four-wheelers in their target.