The consumer has been demanding introduction of the much-hyped Tesla in the Indian market. Nitin Gadkari, The Minister of Road Transport and Highways, Government of India, announced that American company Tesla will be launching their cars in India for sale in 2021! The CEO of Tesla, Elon Musk had indicated the same earlier in 2020 via twitter. Battery charged/electrically operated vehicles have been in the news for a while. The launch of this vehicle should provide a thrust to electric mobility in India, which is presently a work in progress.
As per UN’s Sustainable Development Goals website, the Government of India has a target of installing renewable energy capacity 175 GW by 2022. These include 100 GW from solar power, 10 GW from bio-energy and 5 GW from hydropower, and 60 GW from wind. At the United Nations Climate Action Summit, Prime Minister Narendra Modi had also announced increasing the renewable energy target to 450 GW by 2030 from 175 GW by 2022. With these targets in mind it is only fair that the government is accelerating the transition to electric vehicles, which will consume less non-renewable sources of energy and focus more on battery charging.
As citizens and consumers, we all witnessed visible effect of the lockdown was clean air in cities as vehicles went off roads. Satellite imagery revealed a marked drop in nitrogen oxide and Sulphur compounds that emanate from vehicular emissions in Delhi and Mumbai. India has the dubious distinction of being housing some of the most polluted cities in the world. A lowering of the pollution levels was a positive and welcome change. Further, the Shiwalik range of the Himalayas became visible from Punjab for the first time in over three decades. As lockdowns ease and roads fill up again, we’ll see the vehicular pollution levels return to previous highs. But the experience of breathing fresh air by people during lockdowns reinforces the case for switching to electric vehicles.
The government has taken various steps over the years to promote electric vehicles. The FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) India scheme launched in 2015 with an outlay of rupees 10,000 crore is in its third stage today. Other popular initiatives include National Electric Mobility Mission Plan 2020. This act is in line with the government vision of Atmanirbhar Bharat/ self-reliant India, as it proposes not just sale, but also domestic manufacturing of electric vehicles. Private players are not far behind, with TATA Motors ready to launch its own brand of electric vehicle starting at rupees 15 lakhs. Mahindra Electric is already selling “eVerito” cars that are battery operated. Morris Garage and Hyundai are also selling battery operated vehicles, but with limited success. Government is trying its bit to incentivise customers to buy electric cars and scooters. The Delhi Chief Minister is offering Rs 30,000 subsidy on two wheelers and a subsidy of Rs 1.5 lakh for all car purchasers. Other local manufacturers are also assembling electric cars, which will be a lot cheaper than the slated release of Tesla.
The government, in addition, is also taking interest through some other initiatives:
- As per Press Information Bureau (PIB) of India, the GST rates on Electric Vehicles have been kept in the bracket of 12%, with no Cess as against the 28% GST rate for conventional vehicles with cess up to 22%.
- To attract investment in the electricity infrastructure sector, Ministry of Power has allowed sale of electricity as a service for charging of electric vehicles.
- The Ministry of Road Transport Highways has notified that there will be an exemption of official permit for the battery-operated vehicles.
- The state transport and department undertaking have expressed interest for deployment of 5000 electric buses by State Transport Departments etc.
Electric vehicles will also be economically attractive to the Indian consumer. For instance, petrol and diesel-powered vehicles pay an ‘increased pollution cess’ on fuel which will be exempted for Electric Vehicles (EVs), given their environment friendly technology. Similarly, petrol and diesel prices in the post pandemic economic recovery period have been at an all-time high. Thus, switching to EVs will reduced the fuel expenses of the consumer, while benefitting the environment.
The present government is focusing on a self-reliant/ Atmanirbhar India. EVs will promote virtuous circle of domestic supply chain, manufacturing, assembly and services, thus generating jobs leading to self-reliance. Popularising EV will reduce import bill to pay for the production of petrol and diesel. As per Petroleum Planning and Analysis Cell, India imports 83.6% of its crude oil needs. The transition to EVs will decrease the energy dependency on other countries.
Despite the existing initiatives and EV advantages, India has a long way to go before we achieve transition to e-mobility. Firstly, charging stations will increase electricity consumption, putting un-even pressure on electricity generation. This electricity, if it is powered by coal, will land up polluting the environment. Eventually, there will be no benefit to the Earth. Therefore, renewable energy resources should be coupled with charging stations for efficiency. Secondly, we do not have hundreds of thousands of charging stations across India yet. They need to be as easily available petrol and diesel fuel sources to derive any practical use from EV vehicles. The concessional cost of electricity to charge vehicles will have to planned out, that is, the government will have to decide a reasonable cost that is viable for the customer. Lastly, the Indian consumer is yet to warm up to the idea of electric vehicles. They will require convincing, mainly through demonstration and price comparison with conventional transport. Also, government not shown maximum efficiency with respect to land management. With the rising number of EV companies, and matching infrastructure for charging stations across the length and breadth of the country, easy availability of land will be an issue.
Tesla has huge resources and appetite for what they decide to do. The launch in India is indeed a positive move, but a lot of homework needs to be done before Tesla can make it a run-away success.
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