The proposal to sell electric vehicles without batteries, relying instead on leasing the crucial component, could well be the policy push that could help shift the transport sector away from fossil fuels. This policy innovation will make electric vehicles cheaper by as much as 70% without resorting to subsidies. The decision to start off with the public transport, specifically city buses, is a good scaled-up pilot, allowing government to absorb initial infrastructure costs, and provides an opportunity to tweak the system to meet local requirements. While the pace of innovation and improvement in battery technology is rapid, it is not enough to push prices down to a level that would induce a wholesale shift from internal combustion engines to electric vehicles. A model based on leasing of batteries, with accessible options for swapping discharged batteries at convenient points along the bus routes, is what is required.

Quality, predictability of service and the requisite infrastructure to ensure availability of batteries would need to be ensured. At the same time, this model will need to be financially viable to ensure that a sizeable number of companies provide leasing, swapping and recharging facilities. The drive to popularise electric vehicles should not give rise to new monopolies. But making electric vehicles less expensive cannot be the sole aim of this programme. Lower cost will guarantee an expansion in the market, and this should not become captive to the industry that will emerge around battery leasing. The government needs to ensure that the financial relief, and the expansion of the market, becomes an incentive for Indian institutions and companies to invest in research, development and innovation in battery technology. Make in India must happen in power storage as well.