Authors: Authors: Archit Fursule
Energy Review, Vol 4. Issue 12. 2022
Energy Review: At the recently held 27th Conference of Parties Summit (COP 27), the Indian government submitted a comprehensive Long-Term Low Emission Development Strategy to the UNFCCC. The document emphasises the expansion of the market share of electric vehicles (EVs) as its policy priority for low-carbon development. In this context, can you briefly tell us about the existing policies that have been put forth to foster the domestic manufacturing of EVs in India?
Mr. Fursule: The electric vehicle transition started a decade back in India and got a good pace around 2018 when India aimed to switch 30 per cent of private cars, 70 per cent of commercial vehicles, and 80 per cent of two and three-wheelers to EVs by the year 2030. For this, both Central and state governments are offering various incentives to buyers and manufacturers. To assist and uptake this translation, India has come up with various policy and regulatory initiatives.
In 2012, the “National Electric Mobility Mission Plan (NEMMP) 2020” was published as a follow-up to the Automotive Mission Plan (AMP) 2006- 2016. However, the project did not take off as planned due to a variety of factors, including technology, materials availability, local knowledge and market acceptance. Under this plan, Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME) Scheme was proposed. FAME is a demand-side scheme that incentivises technology development and infrastructure creation through subsidies and pilot projects. Electric and hybrid technologies, including mild hybrid, strong hybrid, plug-in hybrid and battery electric vehicles, are covered under this policy. The first phase of the scheme, namely FAME I was implemented in April 2015 and extended through March 31, 2019. FAME II was implemented from April 1, 2019, for 3 years.
Along with the Centre, state governments are also leaving no stone unturned to promote faster adoption of EVs in India. To increase penetration and adoption of battery electric vehicles (BEVs), the state governments are also in the process of drafting state-level EV policies along with the Centre. On the supply side, there have been Production Linked Incentive (PLI) schemes providing incentives to domestic manufacturers of EVs based on incremental revenue. One such scheme for advanced chemistry cell (ACC) battery manufacturing was approved in 2020.
There are other policies in place such as the battery swapping policy that aims to remove the upfront charging barrier by providing a BaaS (battery as a service) facility, and a charging infrastructure policy. Moreover, there are policies envisaged for vehicle scrapping that would encourage citizens to shift from old and outdated vehicles and explore newer options such as EV vehicles.
ER: A robust presence of vehicle-to-grid integration and off-grid charging stations (especially through clean energy sources) shall further expand the adoption of EVs in India. Are these envisioned in the national policy set-up?
Mr. Fursule: We currently see no provisions for V2G & Off-grid charging under different EV Policies. With India’s plan of reaching 30 per cent of electric vehicle sales by 2030 while ensuring a green transition, it is key to accelerate EV adoption and scale up renewable energy-based EV charging mechanisms. The electricity utilised for charging EVs are from coal-powered sources implying that electric mobility is still not carbon-neutral. Shifting to EVs should come with a low-carbon-intensive electricity grid which Indian policies should set up as a priority.
However, with India’s COP26 conference announcing that it intends to scale its non-fossil fuel generation to 500 GW by 2030, the share of clean energy in the Indian electricity grid is expected to ramp up significantly over the coming decade. This shall help the governments to transition to charging EVs through clean electricity grids. Smart charging gives way to optimizing charging based on grid needs, renewable energy availability and customer preferences. This employs mechanisms such as vehicle-to-grid integration, vehicle-to-home and vehicle-to-building options.
ER: A shift towards EV shall require a substantial amount of (re)skilling of the workforce. On this note, what are your opinions of electric mobility contributing to “just” energy transition? What will be the challenges to the pace of such a transition?
Mr. Fursule:The discourse of just transitions in the transport sector, albeit crucial, has always been limited both in policy and praxis. While it is observed that most EV policies are focused on supply-side effectiveness, the justness of adopting EVs in an equitable and inclusive way has to be carefully studied and implemented. The Indian transport industry is poised to shift rapidly from conventional internal combustion engines to EVs. This transition is expected to be accompanied by significant changes in technology, production processes, and consumption patterns, which in turn will impact employment generation in these industries.
First of all, as the conventional internal combustion vehicle system and its components will be replaced by batteries and other electronic components, with the adoption of EVs, the research and development (R&D) for new-age technologies and components will grow substantially. Furthermore, the EV ecosystem is more data-intensive, thereby providing scope for the creation of new data services and business models. EVs also need components made of rare earth metals and semiconductors leading to the advancement of the semiconductor manufacturing industries.
On the other hand, as EVs have fewer mechanical parts, automotive dealers are likely to experience a decrease in aftersales revenue and affiliated jobs. Traditional repair services and jobs related to them are likely to reduce with the imminent transition. This shall be taken over by authorised service centres catering to the new needs of the EV systems.
The rise of EVs shall also affect other industries such as metals and mining, oil and gas, utilities, and so on. These jobs will require new skill sets, for which the existing workforce must be upskilled even as new workers get trained. these opportunities must be exploited to improve the readiness of youth to enter the job market and increase the representation of women and marginalized groups in the workforce.
(Mr. Archit Fursule is a strategy consultant at Climate Trends, a research-based consulting and capacity-building initiative that aims to bring greater focus on issues of environment, climate change and sustainable development. He is an EV enthusiast and with a strong experience in the clean mobility sector. He has interacted with over 2,800 companies in clean mobility tech, land base and airborne systems, and has worked to convene diverse stakeholders in the sector. He led and implemented the Urban Mobility Lab workshop to accelerate the adoption of EVs in southern India in partnership with central and state-level institutions.) ■□■