Delhi EV Policy: Govt lays foundation for a clean mobility future
India deserves better than the system of 1882, and has both the capabilities and need to pioneer a better answer for the rest of the world to follow.
The policy by far presents itself as the most comprehensive sub-national policy that adopts a system-wide approach to promote adoption of EVs.
The much-awaited Delhi Electric Vehicle (EV) Policy got a final nod from the state Cabinet earlier this week. The policy promises to lay the foundation for transition of the city’s mobility system to an energy efficient and low-emission trajectory. According to an analysis by the Dialogue and Development Commission and RMI, if the policy achieves its target of 25 per cent registration of EVs in new vehicle sales by 2024, approximately 500,000 EVs of various kinds will be operating in the city. For reference, Norway — a global leader in EV deployment — had 230,000 registered battery EVs as of May 2018. Deploying these EVs will result in net CO2 emissions savings of 4.82 million tonnes over the lifetime of these vehicles, a 44 per cent reduction relative to an equal-sized internal combustion engine (ICE) fleet and equivalent to CO2 emissions avoided from nearly 100,000 petrol cars over their lifetime. In addition to CO2 savings, approximately 159 tonnes of PM2.5 tailpipe emissions can be avoided with this level of EV penetration.
Anchored to the objectives of reducing air pollution in the city, the policy targets three critical areas to trigger market adoption of EVs: Demand generation; demand assurance, and infrastructure creation.
While falling battery prices have brought down the cost of EVs dramatically, EVs are still more expensive than their ICE counterparts, usually by a factor of two times or more. The government’s FAME-II scheme has provided an outlay of Rs 8,500 crores over a three-year period to give upfront incentives on purchase of EVs. Delhi EV Policy tops up the FAME-II incentives and provides incentives on purchase of electric two-wheelers, cars, auto rickshaws, e-rickshaws, e-carts, and goods carriers (L5N and N1 vehicles). The incentives in the form of upfront purchase incentive, top-up incentive, scrapping bonus, and loan interest waivers are designed in a manner that brings EVs at cost parity with ICE counterparts. Additionally, non-fiscal incentives in form of road-tax and registration fees waivers, green-registration plates and license-fee waivers have been thoughtfully designed to help in demand creation without burdening government exchequer. The policy also uses regulatory instruments such as open permits for e-autos, traffic and parking related exemptions for e-carriers, regulatory go-ahead on plying of e-bike taxis, and shared two-wheelers to create demand for EVs in these different segments.
Demand assurance to industry
Lack of products and models is one of the key barriers to EV adoption. Despite policy signals from central and state governments indicating an EV-friendly policy regime in the future, industry has shied away from making big investments, a key reason being lack of demand visibility for EVs. Delhi EV policy goes bold in supporting demand generation. Additionally, the policy hints at measures that support EVs and the need for businesses to transition to electric. Policy measures such as all two-wheelers engaged in last-mile deliveries are expected to transition 100 per cent electric by March 2025; all leased/hired cars of GNCTD officers are expected to transition to electric in one year; and 50 per cent of all new city buses are expected to be electric and are also expected to assure demand and instill confidence among industry players.
Transition to EVs implies transition from conventional fueling systems. And while electricity distribution systems reach almost everywhere in the city, there will be a need to create the infrastructure that can charge vehicles or replace batteries. A key differentiator for the Delhi policy as compared to other states policies is that it targets charging at homes and workplaces in addition to public charging infrastructure. Aiming to provide capex subsidy in both cases, Delhi’s policy may set an example for involvement of discoms in creation of charging infrastructure in residential and institutional areas. The EV policy aims to involve discoms in creation of charging infrastructure on a similar model as LEDs roll-out. If successful, Delhi could set an example for other states for fast-tracking deployment of charging stations.
Delhi’s EV policy by far presents itself as the most comprehensive sub-national policy that adopts a system-wide approach to promote adoption of EVs. It’s equal emphasis on instilling confidence in consumers and industry while ensuring that a public scheme like this invests in modes and assets that will have equitable benefits for all, positions it on a path of success if the right institutional and procedural mechanisms are put in place rapidly and efficiently. It has set an example for developing comprehensive policy frameworks that deal with new subjects and new technologies — they need extensive stakeholder engagement, political will and a champion to take the policy from draft to final stages. There is much to be learnt from the process of policy formulation and execution, as it unfolds in the future. The hope for the policy would be to deliver and exceed its stated objectives and make the capital ready for a much larger scale of EV adoption.
The opinion piece was originally published on ETEnergyWorld.