India's 'gradual' shift to electric vehicles a blow to green goal

The country’s policy should be geared toward electric two-wheelers
India’s shift to electric vehicles has to be “gradual”, a government adviser said, signalling that the country may have further watered down its ambitions of having green vehicles comprise about a third of its fleet by 2030.

India needs to push for EVs in a consistent manner over a long period of time and ensure automobile jobs stay unaffected as the country moves toward battery-driven vehicles, Amitabh Kant, the chief executive officer of NITI Aayog, said in New Delhi on Friday. Cheaper EVs, whose costs are likely to be at par with internal combustion vehicles by 2026, will push their adoption even without subsidies.

“I’m against a policy where you drive electric vehicles through large subsidies,” he said at a BNEF conference on the future of energy and mobility. “That’s not sustainable.”

BNEF expects EVs to comprise about seven per cent of sales in India by 2030 as cheap fossil fuel-driven cars dominate the market and state subsidies for electric vehicles are absent. That is well below PM Narendra Modi’s administration’s aim to have more than 30 per cent of vehicles run on electricity by 2030. That ambition was undermined by his transport minister’s stance earlier this year that India can achieve its goals without a guiding policy.

“While the inflection point for higher EV adoption in India will come from a fall in battery prices, expected around 2030, India does need subsidies for the next five-seven years as the upfront cost of owning an EV is much higher than an internal combustion engine,” said Shantanu Jaiswal, the research head for BNEF India.

The country’s policy should be geared toward electric two-wheelers, three-wheelers and public transportation as it has a relatively low rate of car ownership, Kant said. The government also needs to support the creation of charging infrastructure.

India pushed back a deadline to put thousands of battery-driven cars on the road by nearly a year last month, impeded partially by a lack of charging points. State-owned Energy Efficiency Services Ltd., which is responsible for procuring electric cars to replace the petrol and diesel vehicles used by government officials, will roll out the first 10,000 vehicles by March 2019. It planned to roll out 500 cars by November and the rest by June.

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