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MOVEMENT TOWARDS ELECTRIC

VEHICLES:
ANALYSIS OF CHALLENGES AND
ISSUES RELATING TO IT
IN INDIA

By- Anurag Tiwari


Abstract

The pages to follow are a brief study of electric mobility. Beginning with a brief introduction
about electric vehicles (EVs) and their history. The main highlight of the project is the
increasing need of EVs due increasing demand of oil and ill-effects on the environment. A very
brief discussion on the presence of EVs globally is included. There are difficulties associated
with their introduction. Thus a short case study of China is included. The present status is
estimated with some data. Furthermore the reasons for China’s success are analysed. The main
focus is on India. The projects provides answers to the questions related to needs of EVs in
India and what the government has done to make India vehicles all electric. Then there is a
closer look on India’s two biggest steps to promote EVs: Faster Adoption of hybrid and Electric
vehicles (FAME) and National Electric Mobility Mission Plan (NEMMP). Moreover there is
analysis of the challenges to electric mobility in India with the solutions to the problems that
India is encountering or may encounter in the near future. Elon Musk, the CEO of Tesla, said,
“Well, my motivation behind Tesla is really to do as much as possible for the environment and
the electric-vehicle revolution.” The best time to join the campaign is ‘now’.

Introduction

Earth, the only astronomical object to harbour life, currently faces the threat of losing its
immortal beauty. An estimated 3.7 million premature deaths are attributed to ambient (outdoor)
air pollution, based on WHO data from 2012. And transportation is a significant contributor.
Road transport is estimated to be responsible for up to 30% of particulate emissions (PM) in
European cities and up to 50% of PM emissions in OECD countries – mostly due to diesel
traffic. The total contribution of transport to particulate air pollution can vary widely, from
12%-70% of the total pollution mix. Low- and middle- income countries suffer
disproportionately from transport-generated pollution, particularly in Asia, Africa and the
Middle East. In part, this is due to the use of old and inefficient diesel vehicles and a lack of
public and active transport networks.
Pollutants can affect cardiovascular health by hardening the arteries and increase the risk
of heart attack and strokes, and there is even emerging evidence that air pollution may be linked
to mental health conditions and degenerative brain diseases such as Alzheimer's
disease, Parkinson's disease and schizophrenia. The question arises: What can be done to
reduce the vehicle pollution?
An effective solution to this problem can be Electric Vehicles (EVs). EVs could have positive
implications for national energy security, local air quality, GHG mitigation. In the long term,
they could facilitate the increase in renewable energy share in the electricity sector. They can
also prove to be a better substitute to petrol and diesel vehicles.
Electric vehicles have been seen as a promising technology option and several national
governments have successfully implemented policies to promote the technology. Indian
government is keen to promote electric vehicles as a green mobility options and is also
considering it as a viable solution to reduce air pollution in cities.

Globally there are several success stories and best practices. For example, China has taken to
electric vehicles in a big way for two wheelers and buses. In the UK, cities like London are
giving incentives such as grants to purchase new electric vehicles, exemptions from congestion
charges and free or reduced parking charges for electric vehicles in many boroughs.
However, in developing or underdeveloped nations EVs still remain a luxury. Countries like
India face a tough challenge to replace its huge number of fossil fuel-powered vehicles. Despite
the challenges of implementation, there are constant efforts for a change.

What are Electric Vehicles?


As the name suggests these are the vehicles powered by electricity. An electric vehicle, in short
EV, uses one or more electric motors or traction motors for propulsion. Electric vehicles can
include electric cars, electric trains, electric trucks, electric lorries, electric airplanes, electric
boats, electric motorcycles and scooters, and electric spacecraft.
EVs store electricity in an energy storage device, such as a battery. The electricity powers the
vehicle's wheels via an electric motor. EVs are considered zero-emission vehicles because their
motors produce no exhaust or emissions and thus they are emerging as an effective solution to
fossil fuel-powered vehicles. Some of the top EV manufacturing companies are of Tesla,
Jaguar, Nissan, Renault etc.

History of EVs

The invention of electric vehicles cannot be wholly attributed to any one person or country.
Their first appearance dates back to early part of the nineteenth century. Initially, during late
1820s, innovators in Hungary, the Netherlands and the US tried to create small-scaled electric
cars.
In 1832, Robert Anderson, a Scottish inventor, developed first crude electric carriages. Later
in 1837 another Scottish, Robert Davidson, created a locomotive powered by galvanised cells.
There were further developments and evolution of these early models in the years to come.
However, there was a decline in the interest in EVs by 1920s. The revival of interest began in
1960s when fuel prices soared.
Presently, due to the concerns of environment and the life on Earth the agenda of increasing
the use electric vehicles has gained popularity.

Need of Electric Vehicles

There are various reasons for the need of introducing EVs globally. Transport sector, which is
amongst the largest energy consuming sectors, is globally overly dependent on liquid fossil
fuels. 93% of all the fuel used in transport sector was oil based in 2010. The sector is also a
major source of GHG emissions and accounts for 22 % of total global energy related CO2
emissions (IEA, 2011).
The prospect of rapid global temperature increase has created the need for a reduction in the
use of fossil fuels and the associated emissions. The alternative is increasing the usage of
renewable sources of energy. Eco-friendly techniques are proving to be more attractive and
even cost-effective.
On a broader level the increasing dependence on petrol and diesel vehicles also increases the
burden on an economy as very few countries have enough oil deposits to fulfil their internal
demands. Reducing the imports is a judicious move on the part of the governments, thus
different countries are focusing on formulating the policies to gradually increase the usage of
EVs.

Data related to EVs

According to International Energy Agency (IEA):


 Over 1 million electric cars were sold in 2017 – a new record – with more than
half of global sales in China. The total number of electric cars on the road
surpassed 3 million worldwide, an expansion of over 50% from 2016.
 In terms of share, Norway remains the world’s most advanced market for
electric car sales, with over 39% of new sales in 2017. Iceland follows at
11.7%, then Sweden at 6.3%.

 The IEA trends indicate that there will be 125 million EVs running on
roads by 2030.
These trends indicate that the awareness about the electric vehicles is increasing and the
countries are constantly working for bringing them in their markets. However, the real
challenge is faced by developing nations with a growing population. These countries lack the
technology as well as enough support to replace the petrol and diesel powers vehicles in the
country.

The Success story of China

China has shown the world that a big country, 4th largest in area and largest in terms
of population, can change the scenario if the policies and plans are effectively and
efficiently implemented. According to a report in 2018, more electric cars were sold
in China than in the rest of the world combined. The Chinese government has spent
nearly $60 billion in the last decade to create an industry that builds electric cars, while
also reducing the number of licenses available for gasoline-powered cars to increase
demand for electric cars.

Now China can look forward to cleaner air and lower reliance on imported oil. It can
also become a model for other nations. This also presents before China the opportunity
increases its market of EVs.

Now the question is how China was able to do that? The answer lies is the witty
policies of government. The program to increase the number of EVs focused on an
individual city rather than the country as a whole. The methods too were different for
each of them depending on the needs of the city. The government was flexible enough
to grant the city its choice to choose its model on its own. In Beijing, the capital city,
the government played major role by reducing the taxes on vehicles and granting
license plate lottery exemptions. On the other hand, in Shenzhen the model of
implementation was Cooperative Commercialization Model. Yet another method was
followed in Shanghai where international cooperation was promoted.

Electric Vehicles and India

The reasons for need of EVs in India remains same: to reduce pollution levels and
economic burden by reducing the imports of oil.

At least 140 million people breathe air 10 times or more over the WHO safe limit and
13 of the world's 20 cities with the highest annual levels of air pollution are in India.

India is also the third largest consumer of energy as well as of oil, after China and the
US.

Advantages of EVs

Electric vehicles have several advantages for India like:

 Business opportunities-
Electric mobility would surely launch new business opportunities. These
opportunities are expected to emerge in areas such as charging and swapping
infrastructure, service, or integrated transport. This will also promote new
investors to invest in this sector as EVs are full of new innovations and
opportunities in the near future.
 Employment generation-
Introduction of EVs will have a positive impact on the employment level. This
sector has the potential of creating new jobs. As the investment of the companies
will increase, this would also increase the demand for labours.
 Environmental effects-
One of the biggest advantage of EVs is the positive effect on the
environment. Electric cars are called 100 percent eco-friendly vehicles as they run
on electrically powered engines. They do not emit toxic gases or smoke in the
environment as they run on clean energy source. Even if EVs were charged with
100% coal power, the overall pollution levels would still reduce by close to 25%.
India can reduce 37 per cent carbon emissions by 2030 with the electrification
of the vehicles. EVs are also very effective solution the problem of noise
pollution. They can provide very smooth ride.
 Economic advantages-
The economic advantage of EVs is what makes them much more desirable. The
country spent an estimated ₹8.81 lakh crore (US$130 billion) to import 228.6
million tonnes of crude oil in 2018-19. A study found that if India were to take
electrification of the fleet seriously, it stands to save about 64 per cent of the
energy demand for road transport. Also, the country has the possibility of
saving up to 60 billion dollars in diesel and petrol costs by 2030.
 Comparatively low operating and maintenance cost-
The EVs have comparatively low operating and maintenance cost than fuel-
powered vehicles. The refilling of fuel tank is costlier than charging the
battery of the vehicle. Electric cars runs on electrically powered engines and
hence there is no need to lubricate the engines.

Current status of EVs in India

India Electric Car Market Overview


According to Prescient & Strategic Market Research report, the Indian electric car
market size was valued at $71.1 million in 2017 and is projected to reach $707.4 million
by 2025, witnessing a CAGR of 34.5% during the forecast period. Government schemes
and subsidies are playing a major role in the growth of the market. In addition, the
growing environmental concerns owing to high pollution levels in major cities of the
country are also positively affecting the market growth.

INDIA ELECTRIC CAR MARKET, BY END-USER, UNITS (2013-2025)


Steps by Governments

The Government of India has embarked on a mission to create revolution in renewable energy
in the country by planning a movement involving transformation to Electric Vehicles by 2030.

• In 2015, the Government introduced a scheme called the Faster Adoption and
Manufacturing of hybrid and Electric vehicles (FAME) in order to promote electric vehicles.
• In 2015, the National Electric Mobility Mission Plan was drafted to achieve fuel
security by expecting to achieve sales of electric and hybrid cars to reach six to seven million
by 2020.
• State run firm Energy Efficiency Services Limited (EESL) has appointed the nodal
agency to procure around 10,000 electric cars to replace existing government vehicles.
• The Karnataka State Government has approved a policy to promote research and
development in electric mobility making it mandatory to have charging points and pods in all
major cities of the state.
• The Maharashtra State Government waived off some taxes for Electric Vehicles ever
since it became India’s First State to have an Electric Mass Mobility System.
• India is obligated to bring down its share of global emissions by 2030 as a signatory to
the Paris Climate Agreement.
• The Government plans to setup lithium-ion battery making facility under supervision
of Bharat Heavy Electricals Limited (BHEL).
• The Goods and Services Tax (GST) Council has set a tax rate of 12% compared to 28%
set for petroleum based vehicles.
• The Government of India announced the Deen Dayal scheme in June 2014, which
would help in the financing and procurement of the battery rickshaws in the country.
• In March 2015 the Motor Vehicles (Amendment) Bill was cleared establishing battery-
powers rickshaws as a valid form of commercial transport.
• In January 2014, Tripura became the first state in India to regulate the functioning of
the e-rickshaws, and they came up with the Tripura Battery Operated Rickshaw Rules 2014 for
the purpose. Tripura Battery Operated Rickshaw Rules 2014 consists norms / guidelines such
as driver age limits, license fee, renewal fee, Road Tax, provision for vehicle fitness certificate,
insurance for e-rickshaw and identification of routes for operation of these vehicles.
• The government of India is expected to cut its oil purchases by some $60 billion,
reducing emissions by 37% and curb demand for road infrastructure within the next 12 years.
India currently has around 1.3 billion people with around 21 million vehicles sold annually.
A closer look at Indian Government’s FAME (Faster
Adoption of Hybrid and Electric Vehicles) and
NEMMP (National Electric Mobility Mission Plan)

FAME

In order to promote manufacturing of electric and hybrid vehicle technology and to


ensure sustainable growth of the same, Department of Heavy Industry is
implementing FAME-India Scheme- Phase-I [Faster Adoption and Manufacturing
of (Hybrid &) Electric Vehicles in India] from 1 st April 2015. The scheme, which
was initially up to 31st April 2017, has been extended up to 31st March, 2019 or till
Notification of FAME-II, whichever is earlier.

The Phase-II of the Faster Adoption and Manufacturing of (Hybrid &) Electric
Vehicles (FAME-India) Scheme proposes to give a push to electric vehicles (EVs) in
public transport and seeks to encourage adoption of EVs by way of market creation
and demand aggregation. The draft scheme envisages the holistic growth of EV
industry, including providing for charging infrastructure, research and development of
EV technologies and push towards greater indigenization. The scheme has not been
finalized yet.

Total outlay of Phase-I of the FAME-India Scheme has been enhanced from Rs.
795 Crore to Rs. 895 Crore.

The fund allocation made under this Scheme is given hereunder:

S. No. Financial Year Fund Allocated

1 2015-16 Rs. 75.00 Crore

2 2016-17 Rs. 144.00Crore

3 2017-18 Rs. 165.00 Crore

4 2018-19 Rs. 195.00Crore


TOTAL Rs. 579.00 crore

Funds Allocated(in Rs. Crore)

195

165
144

75

2015-16 2016-17 2015-17 2016-18

Funds Allocated(in Rs. Crore)

This information was given by the Minister of State of Heavy Industries and
Public Enterprises, Babul Supriyo, in reply to written questions in the Lok
Sabha.
NEMMP
National Electric Mobility Mission Plan (NEMMP) 2020 was announced by the government
of India with the objective of enhancing national energy security, mitigating the adverse
impact of vehicles on environment and growth of domestic manufacturing capabilities (GoI,
2012). The Plan envisages the following:
• A total investment of $ 4 – 4.5 billion which includes investments in R&D and electric
vehicle infrastructure by the private sector. Proposed Investment by the government is $
2.7 – 3 billion.
• Government investment will include roll out of demand incentives. Joint government-
industry investment will include investment in R&D, power infrastructure and fuel
procurement for power generation
• 6-7 million units of new vehicle sales of the full range of electric vehicles, along with
resultant liquid fuel savings of 2.2 – 2.5 million tonnes can be achieved.
• Savings from the decrease in liquid fossil fuel consumption as a result of shift to electric
mobility alone will far exceed the support provided thereby making this a highly
economically viable proposition.
• Substantial lowering of vehicular emissions and decrease in carbon dioxide emissions by
1.3%-1.5% in 2020 as compared to the status quo scenario.

Challenges to EVs in India

The introduction of EVs seem the best way to get rid of many disadvantages of fossil fuel-
powered vehicles. However, India faces many challenges related to the introduction of electric
vehicles. With the second largest population in the world, lack of advancements in technology
and huge dependence on fossil fuel-powered vehicles it almost seems impossible to shift to
EVs.

1- Lack of a stable policy for EV production:

India is the largest democracy in the world. The government tends to change
frequently. Thus a shift from previous government leads to shift in the policies of
previous government, both at the central and state level. Even the same government
may not stick to its policies throughout its terms.
India also faces the problem of money-minded politics, where corruption often leads
to improper implementation of the policies.
After the announcement of FAME, electric mobility was expected to find a place in
the interim budget. However, in the last three budgets there is no significant grant
made to electric vehicles. In the interim budget of 2019, though it was accepted that
EVs are required for the current development, but there was no concrete plan regarding
it. Babul Supriyo, minister of state for heavy industries and public enterprises, in a
letter to the Parliament, had said that there were no concrete plans to switch to 100%
electric vehicles by 2030. Adding to that, he stated, “There are, at present, no plans
under consideration of the department of heavy industries to make all vehicles in the
country powered by electricity by 2030.”
While the government has made statements about its favourable sentiments towards
EVs, less has been put down in policy. This makes it difficult for manufacturers to
follow through and declare the investment needed to develop and manufacture electric
cars in India. The alternative is to import cars, but since no exemptions are in place,
an imported electric car can easily cost more than twice as much as it would overseas,
defeating the purpose of making electric cars mainstream.
In India, another problem is the difference of policies between the central and the state
government. There are many concrete policies at the state level, however the country
lacks a concrete policy with implementation for the whole nation.

2- Lack of associated infrastructural support:

Lack of concrete policy further results in lack of infrastructural development. The


replacement of the present fossil fuel-powered vehicles supportive infrastructure
requires many years in our country. However, the instability of the policies makes it
almost impossible.
The country still lacks clarity over AC versus DC charging stations, grid stability and
range anxiety (fear that battery will soon run out of power).
A network of charging stations is needed to make EVs viable; this includes hybrid
combinations of on-grid and off-grid energy sources such as solar chargers. According
to pluginindia.com, there are currently only 289 community charging stations in India.
Out of these large number of charging station stations have been set up by the
manufacturers of the EVs, not by the government.
If we opt for the charging model, traffic congestion will worsen, with lengthy queues.
This would also require supply of electricity to these charging stations. As per
Financial Express Bureau, managing this growing electricity demand could have
make-or-break consequences for India’s already distressed electric grid. India’s
DISCOMS (Distribution companies) have a total debt of about INR 4.3 lakh crore,
with annual losses on the order of INR 89,000 crore.
According to Central Electricity Authority, India is still facing a deficit of 1.6 per cent
in power production. The problem is even more acute in tier-2 cities and remote parts
of the country. This further limits the market for EVs in India.

3- High initial cost:

One of the main cause of high cost of EVs is the depreciation in the value of Indian
Rupee. Since India lags behind in the technology, it needs to buy inputs from other
countries. This causes increase in the original value of the vehicle. Also the taxes
imposed on the imports of EVs make them more expensive.
The materials required to make EVs are also not easily available in India. The cost of
EVs in India bumps up primarily due to Li-ion batteries. The batteries make up to about
70% of the cost of the vehicle. Thus, battery packs which are imported cost a lot, about
$275/KWh in India. The GST slab of 28% makes the case even worse.
Also the imports of materials like cobalt adds on to the price of EVs. In India owning a
car is still a luxury. India’s per capita income is just $2,198 (133rd). Forty-five percent
of EV buyers who bought long-range EVs (Tesla cars and the Chevy Bolt) make more
than $200,000 a year. Thus a common man of India needs to wait to own an EV of
his/her own.
“We face an extremely difficult challenge: making our cars, batteries, and solar
products cost-competitive with fossil fuels,” Elon Musk, Tesla CEO, wrote to his
employees. “While we have made great progress, our products are still too expensive
for most people.” Tesla showed the world that electric cars can provide long range,
luxury, and incredible performance. But it has not helped with EV affordability.

4- Convincing the people and huge shift from fossil fuel-powered vehicles:

It is a big challenge to convince the people to leave their hard earned vehicle and buy
a new one. One that still lacks fully supportive infrastructure in the country.
India still lacks good EVs. So it is like telling someone to eat the food before it is even
cooked.
The biggest challenge that EV’s will face is building enough EV’s fast enough to
replace ICE vehicles. Every EV sold means one less oil-powered vehicle sold.
Till 2016 India had 230 million vehicles registered. That is a huge number and without
an effective plan it seems impossible to achieve the target. Thus in such a big country
the complete shift in a decade seems impractical. Indian government stated that Indian
vehicles will become all electrified by 2030, however, the NITI Aayog said that at
current rate India can expect 40% vehicles to be electrified. This seems practical.
Consider, for example, England. It has a fossil fuel-powered vehicle population of
nearly 48 million and it aims to reduce its dependence on them by half by 2030. That
is achievable in contrast to India’s dream of having all EVs by 2030.

5- Lack of power and reduced range:

Fossil fuel based vehicle are still more suitable for a long distance journey. The fuel
tank can be filled as per the availability of fuel during the journey. The also offer a
better acceleration when compared to EVs.
Though Tesla and Volkswagen are making EVs with better range, the range will vary
only from 100-200 miles per charge. Thus people remain sceptical in using the EVs
for long journey.
In a country like India that still lacks oil pumps in remote areas, it is hard to imagine
any charging spots there. Thus a journey those parts in an electric vehicle will prove a
wrong move. This reduces the demand of EVs by a consumer in India who is expected
to travel to long distances.

Solutions
The solution related to the above challenges are:
 India needs to have an effective policy regarding electric vehicles. For the initial
developments the policies need to be flexible. The taxes need to be reduced and the
subsidies should be increased. The government should promote free market and
better facilities for the investors.
Vague statements, without any plans, need to be avoided. More funds are required
to be allotted to the development of EV industry, including in the budget.
The biggest issue regarding the implementation needs to be taken care of. Every
policy needs to be strictly implemented. In case of any corruption strict actions are
to be taken so as to avoid such instances in future.
Local governments should be made responsible for the implementation of the
government policies. Both the central and the state governments need to coordinate
with each other. Representatives of both central and state should be involved in
formulating the policies.

 With the given fund the need is to develop the infrastructure for both manufacturing
and operating. Separate SEZs with more facilities should be developed for
investors in EVs. Government should help the manufacturers to get cheap labour
by helping the companies in the payment to unskilled labours.
The biggest challenge of charging points need to be specially handled. Every
manufacturing company can be given responsibility of establishing charging points
in big cities with the aid of the government. The government can itself take up the
responsibility of developing the charging points in remote areas.
Proper care of electricity supply to these points should be taken. Solar panels should
be installed at each of these stations for fulfilling their some part of energy
requirements.

 The government will have to bear the cost, initially, if it wants India to have all
electric vehicles as early as possible. The taxes on imports to material for EVs have
to be reduced. The vehicles and their part should be given required subsidies so that
they can be made affordable to every Indian.

 Reducing the number of fossil fuel based vehicles suddenly is impossible, as of yet.
This project needs to be divided in phases judiciously. For example, during first
few years the prime focus should be the electrification of public buses and then
gradually, after achieving the targets, government can shift to heavy vehicles, four-
wheelers and two-wheelers.
There should also be a plan to use the recycled material of the vehicles running out
of use.

 People should be made aware about the benefits of EVs. Government should/can
take the help of media as it will have a powerful impact on people of the country.
In a country like India people are easily influenced by big celebrities. Thus
government can call upon some big faces to join campaign for the electrification of
the vehicles.

 The government should also fund its native research centres to develop better
technologies for making EVs. This will reduce the dependence on other countries.
Programs like make in India should have some special policies for EVs. New
inventions will also enhance India’s reputation in the global market as well as
within the country. Thus promoting the sale of the EVs.

Conclusion

Considering the disadvantages of fossil fuel based vehicles, EVs seem as perfect substitute.
However, if we look at the process involved in their introduction the idea looks better in theory
than in practical. In reality, their introduction has faced many challenges. The idea is, in the
present scenario, best suited to small and developed nations. That does not mean end of road
for big countries, but that requires properly planned and implemented policies as in China.
The discussions finally reaches to one question- Is India ready for Electric Vehicles?
Considering the practicality of the question the answer is “No, as of yet”. The goal to have all
vehicles as EVs by 2030 is almost impossible to achieve, yet as NITI Aayog said India can
have about 40% of its vehicles electrified. The policies lack concrete planning. India is lags
behind in the required infrastructure for the EVs. It is a gigantic task to replace hundreds of
millions of fossil fuel-powered vehicle running on Indian Roads, with many more to come in
future.
Better planning and implementation of policies, quick required infrastructural development,
increasing awareness etc. are the best ways to achieve electric mobility in India at earliest.
Having an India with complete electric mobility will be a dream come true.

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