Given the ever-increasing volume of traffic in Indian cities, a well-planned urban transport system assumes vital importance. To this end, the government is exploring the possibility of increasing the share of electric vehicles (EVs), a cost-effective and environment-friendly mode of transportation. States are gearing up for the increased uptake of EVs. Karnataka was the first state to formulate an all-inclusive EV policy in September 2017. Following in its footsteps, Delhi, Telangana and Uttar Pradesh have also come up with draft EV policies and many other states are expected to release policies in the next couple of months. The Indian automobile industry is slowly shifting from internal combustion engine (ICE) vehicles to zero- emission vehicles. New players have entered the market to increase the availability of EVs and the associated equipment. However, some of the challenges that remain in EV adoption are the price of EVs (which is two-three times higher than ICE vehicles due to the imported components and lack of scale of production), the performance of EVs (which drops at higher speeds) and the need for more charging infrastructure.
In particular, electric buses require massive capital investments. These are priced at Rs 15 million-Rs 25 million per bus (depending on the battery life), as compared to Rs 5 million for a normal floor bus. From an individual consumer’s point of view, the significant difference in the capital investment acts as a major deterrent to EV adoption.
With respect to charging infrastructure, its availability and compatibility with vehicles are the major issues. While slow charging stations could work for private vehicles, public transportation requires fast charging stations. For example, with a view to foraying into the EV segment, the Delhi Transport Corporation (DTC) first experimented with electric buses in 2016. It procured two electric buses from China, and these buses have been operating successfully since. However, there are certain issues that need due consideration. First, a normal city bus covers 200 km per day. However, for an electric bus to run for 200 km, it has to be charged several times. Second, DTC buses are 12 metres long. For charging an electric bus of the same dimension, the bus either has to be brought back to the depot or has to be charged midway where there is adequate space available. Thus, the absence of adequate charging infrastructure and the land for setting up this infrastructure in the city poses serious problems.
Further, as per the latest available estimates, 100 buses are needed for every 100,000 people. For Delhi’s present population, the city will need around 20,000 electric buses to meet the growing demand. Finding the charging and parking places for such a large number of electric buses would be a huge issue. Besides, in some of the recent tenders floated for the procurement of electric buses, a high variation in the outright purchase price of these buses across cities has been observed. There was also a lack of standardisation and benchmarking in the tenders invited for electric buses.
Another issue impeding enhanced EV penetration in the country relates to land and power permits. At present, there are several roadblocks in obtaining permits for land acquisition and power sourcing. The stringent procedures make the setting up of charging infrastructure quite difficult and time-consuming.
The way forward
The initiatives being taken by the government, both at the central and state levels, and the increasing investor interest in the EV segment is expected to drive growth. The drivers for EV adoption include financial incentives, public procurement programmes, reducing operating costs through free parking and exemption from toll tax, and favourable regulatory measures. At the state level, various transport corporations are taking initiatives to increase the share of electric buses in public transportation. DTC is planning to invite bids for the procurement of 1,000 electric buses soon. These buses are likely to be rolled out by mid-2019. Besides, Karnataka has set a target of taking EV penetration to 100 per cent by 2030 with capital subsidies for charging infrastructure as well as for battery swapping.
Going forward, for the segment to grow, there is a need to create an enabling ecosystem with a city-level implementation plan, standardise the procurement process and take capacity building measures. Apart from this, utilities and power companies also need to consider renewable energy for meeting power demand from EVs since a key goal for using these vehicles is to reduce pollution.
Based on a panel discussion among Manoj Kumar, Chairman-cum-Managing Director, DTC; Ipsita Das, Head, Future Mobility, Uber, India and South Asia; and G. Srivastava, Co-Founder and CEO, SmartE, at a recent India Infrastructure conference