Electric mobility needs to ride over these regulatory roadblocks

India has a negligible presence of electric vehicles at this point

As the government moves ahead with its target of having just electric vehicles in the country by 2030, a number of regulatory issues needs to be streamlined and settled.

These mostly relate to the sale and use of power to be used to charge these vehicles.

The Electricity Act allows power sale only by power distribution companies. So, if any entity wants to own and operate a charging facility, there is no provision for it unless the Act is amended, according to an industry official. 

The Central Electricity Regulatory Commission has reportedly suggested that entities entering the charging business can join hands with distribution companies or set up battery-swapping facilities. These will not require amendment. But for any other model of setting up the charging infrastructure to sell power, an amendment will be needed. 

There is also no clarity on the rates at which a distribution company will sell power to a charging company and the tariffs that customers will pay to a charging company using the facility. 

“We do not know how these rates will be regulated and who will regulate them. But this is an area that regulators can’t leave unattended,” said an expert, tracking the electricity vehicle space. It is also not clear whether domestic or commercial rates will apply to this power.

“On the charging side, clarity is needed on any differential rates of electricity for these vehicles (similar to differential taxing on fuel today) and also if these rates will vary during the day, based on the demand pattern on the grid. Clarity will also be needed on allowing fast charging (which makes the battery heat up) at higher ambient temperatures as well as in residential complexes/houses,” said Ashim Sharma, principal and division head (auto, engineering and logistics), Nomura Research Institute India. 

He also added that clarity would be needed on whether transporting batteries could be allowed independent of vehicles, as this needed to conform to the guidelines for transporting hazardous goods. This area needs clarity if battery swapping is to be promoted. “Regulations on recyclability and recycling procedures of batteries used will also need to be drafted,” said Sharma.

India, the largest market for two-wheelers and the fifth-biggest market for passenger vehicles (cars, vans, and utility vehicles), has a negligible presence of electric vehicles at this point. The government has expressed an intent to push manufacturers to get into mass manufacturing of electric vehicles to meet its 2030 target in its bid to reduce dependence on imported fuel and control environmental pollution.

The government, keen to promote electric mobility in the country, may make its officers give up diesel- and petrol-run vehicles in favour of electric cars in a phased manner. This could first start with the power ministry and the Union power sector undertakings. Energy Efficiency Services, or EESL, a joint venture of four government-owned power companies (National Thermal Power Corporation, PowerGrid, Power Finance Corporation, and Rural Electrification Corporation), recently floated a tender to procure 10,000 electric cars. It plans to lease these cars to the government departments, which now use leased vehicles powered by conventional fuel. 

A proposal to bring down import duties on electric cars is also being considered by the finance ministry. Currently, completely built imported electric cars (priced at less than $40,000) attract a Customs duty of 60 per cent.

It is learnt that a formal request has gone from the Ministry of New and Renewable Energy to the finance ministry to bring down duties on the import of electric cars to offer a level playing field to companies that are manufacturing these vehicles outside India.