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Ashish Suman
"With urban populations and energy consumption set to burgeon in the coming years, integrated, seamless and environmentally-friendly transportation will be key to the sustainable development of cities."

Ashish Suman
J. Sagar Associates

e-Vehicles: A Green Option for Smart Mobility

January 30, 2018
By Ashish Suman, Partner and Kartikeya Gajjala, Senior Associate, J. Sagar Associates

Smart Mobility for Smart Cities
The Smart Cities Mission was launched with the stated objective of “promot[ing] cities that provide core infrastructure and give a decent quality of life to its citizens, a clean and sustainable environment and application of ‘Smart’ Solutions.” The core infrastructure elements of a ‘Smart City’ include efficient urban mobility and public transport. A number of cities (e.g., Bhubaneswar, Vishakhapatnam) have proposed the development of e-vehicles as part of their Smart City proposals.

In a parallel development, India has, pursuant to the Paris Agreement, targeted a 33-35% reduction in the emissions-intensity of its Gross Domestic Product by 2030 from the 2005-level. To meet this commitment, India intends, amongst a host of measures, to reduce emissions in the transportation sector.

Electric or hybrid vehicles (‘e-vehicles’), being as they are an environmentally friendly alternative to fossil-fuel powered vehicles, present an ideal opportunity to further the objectives of the Smart Cities Mission as well as to aid in successfully meeting India’s commitments under the Paris Agreement.

Government Initiatives
Recent years have witnessed a turning point for the Indian e-vehicle market, with the Central and State Governments announcing a slew of incentives for the production and use of e-vehicles.

In 2013, the Government of India (Government) launched the National Electric Mobility Mission Plan 2020 (‘Mobility Mission’) with a cumulative outlay of about Rs. 14000 Crore, including industry contribution. The Mobility Mission targets national fuel security by means of promoting e-vehicles through a mix of fiscal and monetary incentives aimed at kick-starting this nascent technology, viz.:
• Demand-side incentives to facilitate acquisition of e-vehicles;
• Promoting research and development in technology (including battery technology, power electronics, motors, systems integration, battery management systems, and testing infrastructure), and ensuring industry participation in the same;
• Promoting charging infrastructure;
• Supply-side incentives; and
• Encouraging retro-fitment of on-road vehicles with hybrid kit.

Further to the Mobility Mission, in the 2015-16 Union Budget, the Government of India announced the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles Scheme (‘FAME’). FAME is proposed to be implemented over 6 years until 2020.
• FAME aims to make e-vehicles the first choice of purchasers such that these e-vehicles replace conventional vehicles and thus reduce liquid fuel consumption.
• The focus of FAME is technology development, demand creation, pilot projects and charging infrastructure.
• In 2017 itself the Government of India announced US$16.2 million in grant funding to Smart Cities for the purchase of electric vehicles to be used for mass transportation under FAME.
Additionally, to further promote e-vehicles, certain state governments (including Maharashtra and Karnataka) have announced policies and providing benefits to manufacturers of e-vehicles.

Future: Uncertain
Despite the promising climate fostered by the aforementioned measures, there remain a number of challenges that will have to be overcome before smart mobility goals are met and to ensure successful wide scale roll out of e-vehicles:
• ‘Range anxiety’: A dearth of charging points creates uncertainty in buyers’ minds about whether they could recharge their cars on long journeys. The low penetration of charging infrastructure poses a serious challenges to the e-vehicle market.
• High Prices: Another major hurdle remains that of high prices – of particular concern for the economically-minded Indian consumer. It will be some time before the cost of e-vehicles can be comparable with that the fossil fuel power vehicles. Mass mobility electric vehicles investment price is also an obstacle to adopting an electric fleet.
• Surety of supply: Ensuring uninterrupted supply of power at charging stations is also an issue. Power cuts continue to remain a challenge in India despite surging generation output.

Revitalising Momentum
While challenges admittedly exist, so too do means to tackle and overcome them. A concerted effort that combines fiscal, monetary and other incentives backed by a robust regulatory and legal dispensation is the imperative to ensure the success of India’s climate-friendly initiatives. In particular:
• It is an imperative to develop an effective model for roll-out of charging stations and pricing electricity. Such model may be developed either within the present legal framework or by making necessary amendments to extant law for the creation of an effective dispensation. In this regard, the following models are presently been considered:
♦ Charging infrastructure operated by the distribution licensee: Supplying electricity for e-vehicles is part of the activities/ functions of the distribution licensee.
♦ Charging infrastructure operated by a franchisee: The distribution licensee authorises a third party (i.e., a franchisee) to operate charging stations on its behalf in its area of supply.
♦ Privately-owned battery-swapping stations: The distribution licensee, its franchisee or any third party aggregates demand for batteries and sets up battery swapping stations.
• The government should focus on setting up large lithium-ion batteries manufacturing plants in India in order to reduce the cost of e-vehicles.

Way Forward
With urban populations and energy consumption set to burgeon in the coming years, integrated, seamless and environmentally-friendly transportation will be key to the sustainable development of cities. E-vehicles hold the potential to play a key role in such development. India, which is increasingly vying for a seat at the table of global superpowers, should redouble its efforts and take the lead in the global e-vehicles race – thereby becoming the leader of tomorrow.

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