Indian government to seed mass adoption of electric vehicles with 10,000 e-buses, 50,000 e-rickshaws

In a step towards mass adoption of electric vehicles in India, the central government plans to introduce 10,000 electric buses and 50,000 electric rickshaws, besides pushing for thousands of battery-operated cars and two-wheelers, on Indian roads starting as early as November.

The number of electric rickshaws, to date among the more successful implementation of EVs on Indian roads, could rise up to as many as three million in 18 months, the government estimates. India has a target of at least six million EVs on its roads by 2020, up from about half million now.

The government “wants to make EVs more affordable and efficient by opting to use a swappable battery model that are also designed to give higher performance,” a senior government official familiar with the Centre’s thinking on EVs.

This source added that several companies in the space – both EV and battery makers as also public sector units (PSUs) and utilities – have shown interest in the government-led push.

For the initial deployment of these EVs, the government has identified 12 cities across India, according to the source. He spoke to FactorDaily on the condition of anonymity.

“For buses, there are orders from state governments of Haryana, Karnataka, Himachal Pradesh, and Jammu and Kashmir,” a second senior government official said. “For autos, it is a mix of state governments and large fleet owners.” FactorDaily had earlier reported that regional transport corporations such as Bangalore Metropolitan Transport Corporation, Himachal Road Transport Corporation, and four Mumbai utilities including BEST are in the process of acquiring a fleet of electric and hybrid buses.

Energy Efficiency Services Ltd, a joint venture of PSUs under the Ministry of Power, will procure 10,000 electric cars to support the government’s programme. Earlier the plan was to buy only sedans, but now EESL will also procure electric hatchback, the second official said. He, too, asked to stay anonymous.

India wants to become an all-EV nation by 2030 as solar energy and battery costs crash. The government, seized of the fact that 1.3 billion Indians using private transportation will have disastrous consequences on the economy and environment, wants to pivot towards clean energy and public transportation. A study by NITI Aayog, India’s policy think-tank, and Rocky Mountain Institute estimated a 64% savings in energy if the country shifted to a scenario of public and shared transport powered by electricity.

Some three million cars, over 700,000 trucks and buses, and a little more than half a million three-wheelers are sold currently every year in India. Shifting this demand to expensive EVs needs policy interventions and an ecosystem with multiple players.

Eye on the fisc
One of the policy decisions is to favour swappable batteries over the conventional charging infrastructure being used in the developed world, which in any case has made almost no progress in India. The reason: affordability. Removing the cost of batteries from an EV reduces its costs by as much as 50%. If EVs can be sold without batteries and the EV owner can buy a swappable battery paying for just the charge contained in it, the government and industry players reason, EVs will be within the purchasing power of Indians.

“There will be EV manufacturers and then there will be battery manufacturers who will manufacture the batteries for these EVs. Vehicles will be bought without batteries and energy businesses will buy batteries and facilitate swapping for the EVs as a service. This way the capital cost of the EVs can be brought to as same as that of petrol/diesel vehicles,” the first source said.

An intervention planned, in part driven by technology constraints, is to support an ecosystem for EVs and swappable batteries. Think of it as a network of petrol/diesel pumps or public call phone booths all over the country, where an EV can drive in, swap its battery, pay, and drive off — exactly like a bike, car or truck today tanks up today at a fuel station.

“These outlets can keep up to 25-30 batteries in stock and swap them according to demand. The small batteries will also allow them to be easily stacked on racks and won’t take too much space,” the first source added. Fast charging of batteries in Indian hot climates is not a viable proposition because of the damage it causes, he added.

Battery swapping for smaller vehicles like bikes or e-rickshaws can be done manually as the physical size of the battery will be smaller. In the case of e-buses, where the batteries will be bigger, a mechanised method for transfer will have to be devised and is being worked upon.

Battery swapping for bikes or e-rickshaws can be done manually but for e-buses, where the batteries will be bigger, it will need to be mechanised
While the government is clear that it will not spend heavily on EV subsidies, it has plans for two kinds of fiscal support to enable their offtake. One, the government is considering zero-rated GST (short for goods and services tax) for a window of three years for EVs. The GST on cars and commercial vehicles today stands at 28%.

Two, the government wants to extend also support under a government scheme called FAME (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles) run under the department of heavy industry.

FAME offers a subsidy of up to Rs 1.3 lakh for an electric car. The second official quoted above said that the government is planning to give 60% of the manufacturing cost of the bus, or Rs 85 lakh, whichever is lower, as subsidy through the FAME initiative. Depending on the number of buses and trucks that are eligible for this subsidy, it may require a big jump in the budget for FAME, which today is a small scheme of under Rs 100 crore.

Yet, expanding it will not be a constraint should the government decide on support for a limited period of time. India’s fuel subsidy bill currently stands at about Rs 25,000 crore, primarily on support to kerosene and cooking gas, which is a fraction of what the country used to budget for a few years ago.

Private capital interest
There is significant interest among the private sector in the government’s EV and batteries push, both the officials quoted earlier said. (FactorDaily has written about the gigafactory plans of some of the largest Indian corporate groups.)

“In the short term, you will need subsidy because the volumes are lower. For example, in buses, it can be procuring 10,000 buses, for cars it may be 30,000 to 50,000, and in two-wheelers, it can be 2,00,000,” industry veteran Chetan Maini said.

Companies including SUN Mobility, Amara Raja Batteries, Exide Batteries and Electrotherm are developing Li-Ion swappable batteries, which will be ready for delivery by November. These, in turn, will help power EVs being developed in India by companies such as Tata Motors, Mahindra, Ashok Leyland, Eicher Motors, Bajaj, TVS, Piaggio, Kinetic, among others, according to the government officials.

SUN is readying swappable batteries for the taxi market. “For taxis 120 km to 150 km is sufficient. They make one swap a day and that’s enough,” Maini, the company’s vice chairman and CEO said. “The batteries are modular and can be changed as per the demand. For a scooter, it may be 60 km.”

“Mahindra is testing small electric trucks. Tata Motors and Ashok Leyland have already tested electric buses, Volvo Eicher has also started testing its electric buses…,” said a senior executive at one of the companies. Mahindra has launched an electric three-wheeler and is planning to have at least one variant in each of the passenger cars in its portfolio. Tata is also working towards bringing out an electric version of its Nano car.

Tata Motors, Mahindra, Exide, Amara Raja and Electrotherm did not comment for this story.

FactorDaily had reported in May that Japanese conglomerate SoftBank, cab ride-hailing company Ola and car maker Toyota had EV making plans for India.

The National Electric Mobility Mission Plan 2020 was launched in 2013 by the Indian government with a target of six to seven million EVs on Indian roads by 2020. But there is a huge gap between that and the number of EVs on the road — a gap that the government wants to plug using public vehicles.

Source: factordaily