Electric change

Delhi proposes an ambitious plan to boost EV usage

The Delhi government’s draft policy on e-vehicles (EVs) deserves credit for displaying a serious intent to combat vehicular pollution, one critical component in the smog that envelops the city for most part of the year. The broad thrust of the policy is to target that 25 per cent of all new vehicle registrations be electric by 2023. Given the relatively low adoption of CNG vehicles to date, this target looks challenging. But the Delhi government has anticipated this issue by putting some skin in the game, so to speak. Thus, it is offering subsidies for auto, two-wheelers and e-buses that would be over and above the central government’s Faster Adoption for Manufacture of (Hybrid and) Electrical Vehicles, better known as FAME. The FAME programme incentivises manufacturers. The Delhi government’s scheme incentivises consumers. Among other things, it proposes to offer a subsidy of Rs 22,000 on the purchase of an e-two-wheeler to ensure that its cost is equal or less than the petrol variants.

The enlightened element of the scheme, however, is that it focuses on enhancing the quality of public transport rather than on private vehicle ownership. For instance, e-two-wheelers will also be permitted to provide last-mile connectivity, and they will be additionally offered a “scrapping incentive” of up to Rs 15,000 on older two-wheelers. For e-auto owners, the state proposes a payment subsidy of Rs 20,000 plus an interest subvention of 5 per cent. For e-cabs, the government plans to offer a full waiver on registration fees, road tax and the one-time parking fees. Passengers who use e-cabs will enjoy a cash-back of up to Rs 10 per trip. The state government also plans to ensure that e-buses will comprise half the fleet of new buses (1,000 of these are to be inducted in 2019). E-carriers, too, will be offered subsidies as well as exemption on restrictions on plying times and parking for light goods e-vehicles. All stakeholders have stated that this plan marks a welcome first step in combating pollution in the city and sets a precedent for those states that are yet to announce similar policies.

It is unclear, however, how much this would cost the state or how the state government plans to finance these subsidies. As with all the best-laid out e-vehicle plans, the proof of the success lies in access to charging stations. The underwhelming experience with CNG, principally because of the relative dearth of refilling points, suggests that success hinges critically on the efficiency of the infrastructure, in this case the existence of charging stations. Power distribution companies have mostly welcomed the plan, principally on the assumption that they will be able to charge full rates at charging stations. But the real challenge here is to ensure that Delhi’s discoms have the wherewithal to lay parallel lines for charging stations. The discoms say they cannot do so, which means EVs must be charged from existing infrastructure, requiring a significant upgrade of capabilities and network management and maintenance. Discoms say they, too, will need at least a one-time grant to bolster their networks. Without that, they will be forced to pass on the costs to consumers, which will disincentivise the use of e-vehicles. In other words, the state government will have to work closely with the discoms first, so that the buyers’ incentive it is building into its e-vehicles has a solid supporting foundation.