Introduce EV Mandates for Certain Vehicle Segments, 100 pc EV in Certain Cities: Niti Aayog
The EV penetration rate in 2024 stood at 16.48 per cent globally but was only 7.66 per cent in India. This is against India’s target of reaching a 30 per cent penetration rate in 2030.
With an EV penetration of 7.66 per cent, India’s target to achieve 30 per cent by 2030 looks quite ambitious. Niti Aayog suggests introducing gentle mandates in certain vehicle segments, choosing a few cities for 100 per cent EV in these segments and decoupling battery cost from vehicle cost for greater EV push.
The EV penetration rate in 2024 stood at 16.48 per cent globally but was only 7.66 per cent in India. This is against India’s target of reaching a 30 per cent penetration rate in 2030.
In electric two-wheelers India’s penetration is 5 per cent while it is 16 per cent in e-three-wheelers. In electric four-wheelers, India’s penetration is 2 per cent, China 38 per cent and Europe 21 per cent. In electric buses, the penetration is 7 per cent while that in China is 50 per cent. In e-trucks, it is a meagre 0.07 per cent.
While over Rs 40,000 crore have been spent by way of incentives over the last 10 years, EV penetration has only reached 7.6 per cent. Continuation of incentives alone may not help reach the target of 30 per cent EV sales in the next five years. The government should introduce some gentle mandates and disincentives which will help signal the required direction more firmly. These could be over and above the incentives that currently prevail.
To avoid any strong backlash, the mandates could be limited to only certain vehicle segments and need not be extremely stringent to begin with, finds Niti Aayog. Buses, trucks, paratransit vehicles and urban freight vehicles would be the right ones to prioritise as they are used over longer distances each day and the need for charging facilities is at relatively concentrated locations. Personal two wheelers would also be a good case, primarily because they are very high in number and mostly charge at home. Personal cars would come lower down in priority primarily because they compose a relatively small share of the vehicle fleet in the country and daily usage is also relatively low.
The government can pick 5 cities where 100 per cent of the buses, paratransit fleet and urban freight vehicles can become electric in the next 5 years. This can then be scaled up to 20 cities in 10 years.
Batteries, that constitute almost 40 per cent of the capital cost, should be decoupled from the cost of the vehicle. This will require a completely new kind of battery leasing ecosystem wherein vehicle owners lease batteries and pay on a monthly basis, or on a per-km of use basis instead of paying a high capital cost.
Enable financing for e-buses and e-trucks, scaling up battery technologies and scaling up the charging station network should also be undertaken simultaneously.
