It's raining EV policies

Globally, mobility bore the brunt of the havoc created by the pandemic and the lockdown. In India, our central theme of "shared connected and clean mobility", is no longer appealing enough in the COVID era. 'Personal' and 'Safe' are the operational key words on everyone's mind. The young workforce of India, who dwell in cities (including me), not keen on the hassles of vehicle ownership is rethinking daily commute as life is returning to normal. Perhaps this is the ideal chance to think clean and green, and time is right for a little nudge to purchase/lease an EV. It is also time to revamp to "shared, connected, safe and clean" mobility, and the forerunners in commercial electrification can use a little help. This week, we saw two state electric vehicle policies, Delhi and Telangana which might just do the trick.

Go Electric

Delhi Government seems crystal clear on the target, 25% Battery electric vehicle registrations by 2024. For any resident subject to the grey gloomy skies, and notorious air pollution, it's a welcome step. International experience for climate action and sustainable development already shows that sub-national actors, i.e., the actions by States, Cities and Communities are key to achieving goals. Coupling the Delhi state subsidies with the incentives offered under the National Policy, FAME-II makes electric vehicles an attractive option in the National Capital.

Let's take the case of electric two-wheelers. Under the FAME-II they receive an incentive of INR 10K per kWh for the battery. Delhi government is sweetening the pot with an additional INR 5K per kWh subsidy for the batteries, and along with a scrapping incentive of INR 5K for old ICE two-wheelers. They have also tightened the norms for eligibility, and it is tougher than the FAME guidelines.

Electric cars will receive an additional subsidy of INR 10K per kWh, thus doubling the benefit to INR 20K per kWh (including FAME and State Subsidy). This offer is available for the first 1000 electric car procurements, subject to a maximum incentive of INR 1.5 Lakh per car. Road tax and registration fees are waived for all EVs.

Addressing Swapping

Remaining technology-neutral, the Government extends the benefits to swappable models and swapping service also. In case the battery is not sold with the vehicle, the vehicle owner and the energy operator (swapping service provider) will share the subsidy equally. The policy tackles the high land cost barrier for public swapping/charging infrastructure by allocating locations with bare minimum lease rentals. The energy operators will also receive a capital subsidy for the cost of the chargers if timely installed in the allocated location. The energy operators will also receive SGST reimbursement for battery procurement.

Tackling the cost of the electricity problem, the Government will endeavour to maintain the EV charging tariff at the current level or even lower the rate during the policy period. Greening of charging will be encouraged with renewable energy procurement, power banking with DISCOMs, and by trying to reduce the hurdles to avail open access.

Not just about public charging

Remembering that the share of public charging will be less in comparison to private charging, the government has extended the benefit of EV charging tariff to private charging point that can be managed by the DISCOMs. Consumers can procure the chargers at a subsidised rate from DISCOMs, who will install the chargers. This policy thus encourages both home and workplace charging, and is committed to modify bye-laws to make buildings EV ready. 20% of parking places have to be made EV ready in new construction, and existing building owners will receive incentives to install shared private charging points.

Ebike taxis, E rickshaws and E-autos

For passenger transport, ride-hailing services are permitted to operate electric taxis. This is an important step because this service that provides quick and economical commute is not permitted in some states. In a city like Delhi, this is a welcome move and enabling easy hop-on and hop-off rides for the workforce.

E rickshaw (e-rick) has already become part of the urban fabric of last-mile connectivity in many places. E-rick might be the most popular and most widespread electric vehicle in India. Most days, even I used to catch a ride on the e-rick to the nearest metro station. Delhi EV policy provides support of INR 30K for e-ricks including swappable models. Both Lead Acid and Advanced battery chemistries are eligible for the incentive. Factoring in the additional cost for the Advanced batteries, an additional interest subvention of 5% is provided for vehicle purchase loans.

However, the low-speed e-ricks are not suitable for the operation of all roads. The next step in the transition is a replacement for the CNG/Petrol/Diesel autos that serve the intermediate transport requirements. E-autos also receive incentives as same as the e-ricks i.e. INR 30K per vehicle incentive and 5% interest subvention. The e-autos also get a little edge over the e-ricks, with the open permit system without any cap, scrapping incentives for ICE vehicles and permitting the exchange of ICE vehicle permit for an EV permit at zero additional cost.

Making Logistics Green

Apart from this, the logistics fleet operators, such as the courier, food delivery and e-commerce are asked to electrify their fleet. This should be a welcome measure for the segment, wherein electrification is already under progress, The low operational costs are making EVs attractive for fleet operators, but they are in need financial support for scaling up. The government has thought through the challenges and has decided to extend financing support to the service providers.

Apart from the two-wheeler fleets, Delhi Government is also committed to ensuring electrification of the larger goods carrier fleets. Fleet operators will receive a purchase incentive of INR 30K for the first 10K vehicle registrations, an interest subversion of 5% for procurement and a scrapping incentive of INR 7.5K.

Feebates and Others

The policy is centred on the idea of feebates, disincentivising ICE procurement, and incentivising EVs. Pollution cess, road tax, congestion fee and environment compensation fee will be bought into a single umbrella called State EV fund. Feebate is a widely popular policy tool, which is practised in markets with high EV penetration with good success.

Delhi policy offers support to buses to ensure that 50% of new additions are electric and sets a benchmark of 1000 electric buses in the year itself. The policy also encourages the reuse and recycling of EV batteries. The government will also factor in need of skill development with vocational training courses.

Not forgetting Telangana

It may seem that with the attention to detail, Delhi policy has the ability to single-handedly outshine all other EV policies. However every small step matters, especially that of Telangana and all other States which have notified EV policies. Telangana policy also aims for 15% electrification. The targets of electrification of 80% two- and three-wheelers, 70% commercial cars, 30% private cars and 40% buses will also lead to significant improvement in emissions and pollution. Measures such as road tax and registration fees exception, incentives for purchase, and added incentives for swappable batteries are all commendable. The policy also has noteworthy incentives for charging infrastructure include a capital subsidy for fast charging/swapping stations and special electricity tariff rates.

All that is left for us is to act, and make hay when the sun is shining. Be it for commercial or personal use, with the added advantages brought on by the shower of policies the future of EV and charging is looking brighter. Let's embrace clean mobility for our safer commutes.