Electric Vehicles | Build the charging infrastructure, they will come

File image

The NDA government wants the Indian automobile industry to go electric. Progress has been slow and it blames the automobile industry for not doing enough. While the government has taken a confrontational approach, the Economic Survey has tried to show how it may be done, without breaking any bones. Its findings tie in with what others, including the automobile industry, have been saying.

In the chapter on energy, the Survey focuses attention on how charging infrastructure has influenced the uptake of electric vehicles (EVs). It comes to this step, after assessing the incentives that have been provided in various countries, such as incentives in areas such as tax exemptions, tolls and parking fees or mandated electric vehicle targets for companies.

It then concludes that while some studies say incentives have been effective, others have indicated otherwise and have concluded that charging infrastructure has been a more important determinant of EV adoption. It took data for certain countries and mapped availability of chargers to market share of electric vehicles in the country’s automobile market. It found that the market share is positively related to availability of chargers.

A corollary is how the increasing availability of CNG pumps made it an easier decision for people to buy a CNG-fuelled car. While CNG was earlier available in the main metros, its spread to cities means even inter-city travel in a CNG vehicle is possible.

The Survey says India’s limited charging infrastructure appears to be a ‘major impediment’ to the increased adoption of EVs. Of course, it is being clever also. If a slew of tax incentives are given to electric vehicle companies, tax revenues could get hit as low-taxed EVs gain share at the expense of fully-taxed fossil fuel vehicles.

Not just infrastructure, there’s a need for the right technology too. The Survey talks about how the time taken for charging, half an hour for a fast charger and eight hours for a slow charging device, act as impediments. Compare that with the few minutes it takes to refuel at a pump. It recommends universal charging standards for the country and battery technology suited for India’s climatic conditions.

These are imperative if India is to succeed in its ambitious EV targets. The National Electric Mobility Mission Plan had a target of sales of 60-70lakh units by 2020. In 2018, the Survey says we sold 54800 two-wheelers and in 2017 we sold 2,000 cars. That's the scale of the gap between hope and reality.

The Survey has left one issue unaddressed. Who is going to build this infrastructure: The central government, the state governments, a public-private partnership or a private entity? And, who will fund it? In the initial years, the infrastructure will be under-utilized till the EV population increases. Will the government subsidize it to make up for losses in the initial years and ensure it can meet expenses and service its debt?

Will the owner of the charging infrastructure be free to charge any fee or will the government have a say in its pricing? Will it be uniform across the country? The government should pay heed to the Survey’s finding on creating charging infrastructure and also think through the ownership, financing and gestation issues.