India has been at the forefront of aligning its policies with its commitment to the Paris accord on climate change, signed in 2016. The accord aims to pursue efforts to limit the global temperature rise to 1.5ºC above pre-industrial levels. Mint looks at the government’s effort towards rapid adoption of electric mobility as a way to cut down on greenhouse gas emissions.

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Why is the central government promoting the adoption of electric mobility?

The central government wants to reduce the import of crude oil significantly and thus help curb increasing levels of pollution. India has 22 of the world’s 30 most polluted cities. NITI Aayog, the government think tank tasked with devising a mass electric energy-based transport system in India, has devised a plan to stop the registration of internal combustion engine (ICE)-driven three-wheelers by 2023 and two- wheelers under 150cc by 2025. The central government has approved an outlay of ₹10,000 crore for three years till 2022 to subsidize electric vehicles and drive the adoption of electric mobility in the country. The central government initially wanted to stop the registration of electric vehicles by 2030, but later decided to put it on the back burner. Similarly, the central government didn’t want to offer subsidies to hybrid vehicles, but then changed its stand following intense lobbying by Japanese vehicle manufacturers.

What happened at the last meeting?

NITI Aayog members invited two- and three-wheeler manufacturers, along with startups that make electric scooters, for a meeting on Friday to understand the apprehensions of the automobile industry. The think tank gave the industry two weeks to draw up a plan on increasing the number of electric two- and three-wheelers and how corporate entities can help the government in this effort. Two-wheeler manufacturers have urged the central government to consider not banning the registration of ICE-based vehicles and find other ways to take off the roads BS-III compliant and other lower-graded vehicles, considered more polluting than BS-IV vehicles. Industry representatives also informed the government about a possible loss of employment if a sudden shift to electric vehicles took place.

What does phase II of FAME 2 envisage?

The centre has announced an outlay of ₹10,000 crore for phase II of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME 2) scheme to increase the number of electric vehicles in the commercial fleet. The outlay has been made for three years till 2022. The centre has sanctioned ₹8,596 crore for incentives, of which ₹1,000 crore has been earmarked for setting up charging stations. The centre may incentivize the purchase of 7,090 electric buses with an outlay of ₹3,545 crore, 20,000 hybrids with ₹26 crore, 35,000 four-wheelers with ₹525 crore and 500,000 three-wheelers with ₹2,500 crore. Apart from FAME, the government, through its different arms such as the ministry of road transport and highways, power, urban development and science, has been working on different aspects of electric mobility.

Which are the firms in the EV space?

The electric scooter segment is dominated by startups such as Ather Energy, 22 Motors, Okinawa and Torque. Traditional firms such as HeroMoto Corp, TVS Motor, Honda Motorcycles and Scooters, and Bajaj Auto are yet to launch a product in this segment. Over the years, such manufacturers have been focused on upgrading their products to BS-VI norms. The shift to EVs will raise the cost of vehicles by around 10% and may hamper sales. India’s two-wheeler market is the world’s largest and crossed 20 million units in sales in FY18.

What are the main impediments to adopting electric mobility?

A battery, depending on its capacity, will keep a vehicle running at a certain speed for a certain duration. Lack of charging infrastructure around the country is holding back mass EV adoption. High cost difference between ICE-based vehicles and EVs is another reason. None of the vehicle makers or other firms have invested in making lithium-ion cells for batteries—most of the EV makers assemble the battery packs. India also lacks the important minerals, lithium and cobalt, that go into making lithium batteries, which are imported from China.

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