India Becoming Electric Car Friendly! But is It?
Electric Vehicles (EVs), when announced, created fascination and curiosity that bound more than just a few! Although when you understand and analyze closely, it is more than just technology. They are also a more sustainable alternative to fossil fuel. Sounds great? Doesn’t it? But how far does this promise of sustainability take us? The thing that pops up in our head after the initial utopian imagination, is its adoption and feasibility of EVs as a reality.
Being fairly up there on the global stage with its technology game, India wasted less time to adapt to the invention of EVs, and offered the world the best. In 2013 the Indian electric vehicle industry unveiled the National Electric Mobility Mission Plan (NEMMP) 2020. The transport ministry reported this year, that nearly 400,000 registered electric vehicles already run on Indian roads. The current government has committed to gradually reducing the dependability on fossil fuels and moving towards renewable energy. A major step in this direction is to offer tax reduction on both, EVs and EV Batteries.
At the 36th meeting of the Goods and Services Tax, in an attempt to cater to its commitment to support clean energy, the council slashed tax rates from 12% to 5% on EVs, and from 18 % to 5 % on EV chargers.
Are Tax Cuts Cutting It?
In 2018, about 8,000 EVs were sold in India against 4 million non-EV, passenger and commercial vehicles. Apart from the almost prohibitive production costs and market prices of the EVs, the lack of other infrastructure (such as a reliable network of charging stations), creates even more resistance against it, in a majority of potential customers.
It is positive to say that the government has indeed taken the responsibility to support the development of this asset of technology very seriously. The sector is yet to properly take off, and therefore the revenue generation for the government by means of taxes is not sizeable enough to talk about. The benefits to the individual consumer, however, are still worth getting on-board the EV tide early.
From solar power developers and manufacturers to lithium-ion producers and major automobile manufacturers, everyone seems to have discovered the potential of immense growth and contribution that this industry will churn out. It only makes sense that they too, like the government, see it as a long-term opportunity and seem to be fully invested in it.
Is India Ready?
As we observe and understand the opportunity that this technology has to offer, the evaluation we need to seek is, is our country ready? If it is, does it understand the real-world challenges that are part of this make-believe development?
As we mentioned for manufacturers and other energy firms, manufacturing, production and charging infrastructure looks like an attractive prospect. The other essential factor that is of concern, is the battery. All EVs use lithium-ion batteries(LIBs), which are expensive and do not support long travel needs. Not to mention that the raw material needed to make LIBs is already short in supply. The typical battery used in an EV is as massive as 500kg pack which hold hundreds of large lithium-ion cells.
Lithium is a fairly rare resource in the world and is found in very few spots around the globe. Some countries where most of the lithium reserves are located today are Bolivia, Chile and reserves of cobalt in Congo.
Hence, it is not surprising to understand that the battery is the most expensive part of the vehicle.
Wise or Worse?
An understanding of the fact that the depleting state of fossil fuel is already a problem and hence we are looking out for a positive solution. With the country’s population of 1.2 billion people as of 2017, there were about 33.11 million vehicles manufactured. Which says a lot about our needs and dependability on the same.
As lucrative and opportunistic the deal for the EV business sounds, we also need to consider the cost of anticipation that may not look the same to us, in the future.
However, with the government’s measures to promote clean energy, tax reductions of about ₹1.5 Lakh on interest paid to buy EVs are one way to go about their goal. The roadmap laid out by the government aims at making all two and three-wheelers on Indian roads electric by 2023 and all commercial vehicles by 2026.
The affordability of this technology is still however, in question. You may save on your taxes and even reap the benefits of the efficiency on technology in a distant future, but as an immediate decision, you need to weigh all its pros and cons well.
One way to go about the easy adaptation of EVs is expanding the already existing shared economy of public transport. In fact, Delhi already uses E-rickshaws that run on shorter routes and help passengers commute in an eco-friendly manner, this can be considered as an example that the rest of the nation can emulate.
Similarly, if we convert public transport on a large scale and switch them to EVs in public interests, a lot of factors that hinder people’s interest today to invest in an EV can be solved too. Public transport caters to millions of people and the charging infrastructures, service stations, etc. the government will need to develop for electric public transport, will also encourage people to invest in their own EVs at a faster pace.
Adding to this, it will also spread across the board, the bulk cost of an EV, which will in turn make it more affordable and functionally efficient.
After all EVs do offer similar comfort and other aspects that you look for in a vehicle, with an added motivator of it being an eco-friendly, socially responsible and a credible investment for the future.
