India Plans A Radical New Policy To Electrify Its Transport
The U.S. Solar Companies Keep Falling Like Nine Pins Against Chinese Ruthless Onslaught
April 26, 2017
Is Indian Government's SECI Going Bananas By Planning An Entry Into The Solar EPC International Market
April 27, 2017India’s New EV Policy
The Indian government has set out a target to completely electrify its entire transportation fleet of buses, cars, autos and two-wheelers by 2030 but the policy formulation and implementation have been quite poor so far. A number of electric two-wheeler startups have gone bust and there are hardly electric vehicles or charging infrastructure in India. Some policies such as FAME exist mostly on paper and do not have a chance in hell of meeting their outcomes of 6-7 million hybrid and electric vehicles by 2020.
The biggest problem facing Indian policy makers is the lack of resources. While governments in China, USA and Japan can throw billions of dollars into pushing a policy through subsidies and incentives, the Indian government does not have that luxury. It can give a pitiable $1000 of subsidy for an electric car, while the other governments routinely give $5000-$15000 in incentives for buyers of electric vehicles. The other problem is that the implementation on the ground is equally bad with leakages of subsidies making the problem even more difficult.
Instead of creating a huge new charging infrastructure and then allowing EVs to rely on it to charge their batteries, the government is going after the problem of the high initial cost of EVs. The biggest cost component is battery cost which makes the cost of an EV much higher than that of the ICE vehicles. This is the biggest different between the two technologies and prevents the uptake of EVs. The government will buy a huge amount of batteries and lease it to vehicle owners. This will sharply reduce the capital cost of the vehicles and substantially lower the barrier for ownership of EVs. The government is also working on a plan with car aggregators, vehicle makers and others to build out numerous battery swapping stations which will lower the time required for charging a battery. This will further reduce another major barrier of the time required to charge a battery which is substantially higher.
The government wants to make this a subsidy less model and will first target the lower segment of non-air conditioned cars and two-wheelers for this policy. The government hopes to seed an ecosystem wherein the scale comes in and substantially reduces the cost of the EV and its associated infrastructure.