2017-07-07
Big plans for electric vehicles in India, lack of infra a challenge

Even as sales of hybrid vehicles are taking a hit under GST regime due to a high tax rate, premium auto companies are planning to launch more electric vehicles.

Under the new Goods and Services Tax regime, hybrid and luxury cars are taxed at a higher tax rate of 43 percent from the earlier 28 percent whereas pure electric cars are taxed at 12 percent.

Earlier this year, the government had stopped giving incentives to mild hybrids under the FAME India scheme. Faster Adoption and Manufacturing of Electric Vehicles (FAME), which was launched in 2015 to incentivise manufacturing of eco-friendly vehicles including hybrids.

 

Nonetheless, car manufacturers are keen on going full electric, boosted by the government’s plan to get rid of fossil-fuel dependent cars by 2032. According to the government’s policy think-tank Niti Aayog, India can save up to 64 percent of energy demand for road transportation and 37 percent of carbon emissions in 2030 if it works towards a “shared, electric and connected mobility future”.

On Wednesday Swedish auto giant Volvo Cars said it will only have hybrid or fully-electric cars from 2019. The luxury car manufacturer has put electrification as the driving motto of its future course. The Volvo CEO Hakan Samuelsson said, “Volvo Cars had earlier said it plans to sell a total of 1 million electrified cars by 2025. When we said it, we meant it. This is how we are going to do it.”

According to a report in The Economic Times, Tom Von Bonsdorff, the MD of Volvo Auto India, said that the first fully-electric Volvo car would be revealed in 2019 and would likely be launched in India by 2020. The company is launching a series of plug-in hybrids before that.

A big challenge for increasing electric vehicle (E) demand in India is that the charging infrastructure here is not on par with the western world. There is also a lack of vehicle charging stations. This year, Nagpur got its first car charging station. Nagpur boasts having one of India's first electric taxi fleet wherein 200 vehicles operate under Ola.

To boost demand for electric vehicles, National Thermal Power Corporation (NTPC) plans to create EV charging facilities. The first of its kind were installed near its Delhi and Noida offices in last month.

As India aims to cut down on carbon emission and live up to its pledge in Paris Climate Agreement, low-pollution electric cars can help the country in the transition, experts believe.

Last month, Ashok Leyland CEO and MD Vinod Dasari said in an interview to CNBC-TV18 that it was making a Rs 100-crore investment towards electric vehicle development.

Ashok Leyland, India’s second largest bus manufacturer, is building infrastructure to grow its EV production wherein it will include battery-swapping. The company, which launched the first electric bus in India, is not yet equipped to be manufacturing their own car batteries, the CEO said.

Dasari further added that the government was demanding between 2,000-20,000 electric buses. According to him, the global prices for batteries are coming down steadily and soon electric technology would be able to compete with the operating cost of diesel cars.

Niti Aayog, along with Rocky Mountain Institute, is also framing policies to enable vehicle-grid integration (VGI). It plans to create a Forum of Regulators (FOR) to lay out framework to make EV charging accessible and affordable.

According to the government’s Automotive Mission Plan 2016-26, India’s auto market is expected to grow 3.5-4 times to about Rs 16,16,000 - 18,88,5000 crore by 2026.

 

 

Source: Money Control