Policies for India’s global leadership on EV adoption Accelerating commercial fleet electrification and attracting private investments in charging Contents
Foreword | 4
Executive summary | 7
1 Introduction | 10
2 Foundational sector-wide policy recommendations | 20
3 EV charging-related policy recommendations | 27
4 Use case-specific policy recommendations | 40 a. Employee transport | 40 b. Ride-hailing | 46 c. Deliveries | 52
Evaluation of prioritized recommendations | 60
Conclusion: Guiding pathways for policy action on commercial fleet electrification | 61
2 Policies for India’s global leadership on EV adoption Knowledge contributors With thanks and recognition to all the companies who have contributed to this paper.
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3 Policies for India’s global leadership on EV adoption 4 Policies for India’s global leadership on EV adoption 5 Policies for India’s global leadership on EV adoption Foreword
can substantially decrease Indian business leaders are Mobility is at the core of urban emissions, optimize traffic flows committed to making mobility life and economic activity. It and improve the lives of our more sustainable. provides people with access employees, customers and to work, health, education, fellow city-dwellers. COVID-19 WBCSD has been a catalyst goods, services and leisure. demonstrated the need to build of collaboration and has led Mobility systems are essential resilient mobility systems and our consortium experts to to the modern economy, but for offers a unique moment to push offer consensus-based policy most large cities, they are not for systemic change. recommendations that can sustainable. accelerate electric vehicle Transport has been one of the The scale of businesses and adoption and facilitate private fastest growing sources of commercial fleet operators investments towards creating emissions and is responsible enables the economic viability an energy and charging for the unforgiving congestion of electric vehicles and makes infrastructure for the future. and pollution in most large them critical catalysts for fast Indian cities. Rapidly evolving adoption in the context of the This report collates these technologies and business growing Indian market. The Indian consensus-based policy models offer pathways to government’s policies to support suggestions and proposes sustainable mobility. electrification of mobility have practical means to improve allowed businesses and fleets to coordination between Businesses can lead this deploy electric vehicles and the businesses and policymakers to transition. Adopting sustainable related charging infrastructure. make India a global leader on EV corporate mobility policies adoption.
Praveer Sinha Nitin Prasad CEO and Managing Director, Chairman, Tata Power Shell companies in India
6 Policies for India’s global leadership on EV adoption Foreword
India’s sustainability challenges This could lead to cumulative Commercial fleets – for employee are globally critical and the lifetimes’ worth of oil and CO2 transport, ride-hailing, home country is vulnerable to the savings, amounting to 5.4 deliveries and other commercial effects of climate change. The million tons and 846 million tons and industrial applications – country is home to one sixth respectively, deployed over represent the fastest-growing of the world’s population and vehicles’ lifetimes.3 The race is segment of vehicles on Indian is one of the fastest growing on to achieve the sustainable roads. The economics of the economies, rapidly building transition of India’s economy and electric vehicle option for new infrastructure for its energy meet the needs of its young and commercial users is improving system and built environment. fast-growing population. quickly. At the same time, India is also home to 22 of the world’s 30 Mobility offers opportunities WBCSD is making business most polluted cities.1 for business growth and part of the solution for India’s sustainability. urban pollution and emissions Road transport is one of the challenges by mobilizing the fastest growing sources of Even as India invests in public entire value chain to accelerate carbon emissions. The carbon transport and infrastructure, the the adoption of electric vehicles. dioxide emissions2 in India from demand for personal mobility road transport are expected using two-, three- and four- Our REmobility project to double over the next two wheelers is growing faster than brings together businesses decades. India is the third largest the speed of deployment of representing over 10 billion global emitter of carbon dioxide mass transport. Public transport kilometers of mobility in India, of despite low per capita emissions. accounts for only a seven- which 250 million annual vehicle The speed of adopting zero- percent share of the total trips kilometers have been electrified. 4 emission vehicles and renewable in India. Urban commuting has become one of the most energy- Bringing together the combined energy in a large country like India experience and expertise can have a measurable impact and pollution-intensive activities in India. of our members to suggest on global decarbonization efforts. the consensus-based policy A successful realization of The government is actively actions collated in this report FAME II and other current policy promoting mobility electrification was essential. We hope that measures (for commercial and and the fast transformation of the this will initiate a long-lasting public adoption) could realize an mobility system, but such action collaboration between policy and electric vehicle sales penetration alone will not shift adoption of business actions that can make of 30% of private cars, 70% of electric vehicles fast enough if it India a global leader on electric commercial cars, 40% of buses is done unilaterally. vehicle adoption. and 80% of two- and three- wheelers by 2030.
Filippo Veglio Managing Director, Thomas Deloison Outreach, People & Society Director, Mobility, and Mobility, WBCSD WBCSD
7 Policies for India’s global leadership on EV adoption Executive summary
India wants to be a global leader in the manufacturing and adoption of electrified vehicles (EVs) and sees the energy transition in mobility as an important part of its emissions reduction, energy security and industrial strategies.
This decade will be crucial for India’s ambitions. A slow uptake of EVs in the 2020s will mean tens of millions of additional combustion vehicles on Indian roads. For India, it will also mean lagging behind global peers in a strategic sector for manufacturing. India urgently needs a holistic policy approach that addresses the established automotive sector’s concerns, creates market rules to build the new energy infrastructure, preserves and creates jobs, and fosters demand to accelerate technology adoption in order to fully capture the available economic opportunity.
India needs a robust national intersection of mobility, real India must enhance the scope, ambition alongside business estate and energy. These sectors utilization and efficiency of leadership and action to working in silos will result in sub- its incentive scheme: Funds achieve this once-in-a-lifetime optimal outcomes. A joint policy under India’s primary EV incentive transition. A strong ambition task force across these sectors scheme, Faster Adoption and will set a clear direction and will accelerate EV adoption Manufacturing of (Hybrid &) create long-term visibility. A and strengthen the business Electric Vehicles in India (FAME), national EV ambition along with case for efficient electric fleets, remain underutilized. There is a clear timeline and roadmap effective space management, an urgent need to review and for implementation can provide charging network creation and overhaul the scheme. There is certainty and galvanize action grid management. It is only merit in expanding the scope of across policy and market. when these sectors collaborate FAME to more fleet segments, that large-scale capital can be such as private e-buses, India needs to focus on shared, attracted to this transition. corporate e-cars and battery clean, convenient, affordable swapping for 2Ws and 3Ws. and efficient mobility for India is rightly focusing all: Electrification alone is on fleet-led adoption and Focus on non-fiscal incentives not the panacea, but shared, infrastructure build-up: India’s to maximize impact with limited electric mobility is a key part national EV incentives scheme resources: Given India’s multitude of the solution. Given the low is structured to prioritize clean of priorities and limited public operational cost of EVs, higher mobility vis-à-vis clean vehicles. resources, all opportunities to utilization increases economic The focus of the incentives encourage EV adoption without viability in terms of total cost of scheme is on electrification of dipping into the public exchequer ownership – making them ideal buses, commercial vehicles, must be explored. Instituting for shared mobility options. 2Ws and 3Ws, and an effort led Low-Emission Zones (LEZs) Shared and electrified two- by the public sector to build the in congested urban centers, wheelers (2Ws), three-wheelers backbone of a robust charging relaxing day-time municipal (3Ws), four-wheelers (4Ws) and infrastructure. The high utilization entry for electric urban freight buses can help make mobility of commercial fleets makes them and legalizing e-bike taxis are a affordable for 1.3 billion Indians. the ideal candidate to lead India’s few policy opportunities that will EV transition. Electrification of Enhance policy and market support early EV adoption without commercial fleets can provide the the need to expend resources. collaboration across mobility, demand signal and scale required energy and real estate sectors: to attract manufacturing and R&D The potential value of the investments – allowing consumer transition to EVs resides at the adoption to follow.
8 Policies for India’s global leadership on EV adoption Institute clear, unbiased Enable access to clean energy support shared mobility and regulations and market rules to power clean mobility: The enhance driver incomes across to enhance the ease of doing transition to electric mobility commercial fleets for deliveries business: As businesses start to makes the most sense when it and ride-hailing. invest in the transition, they often is powered by renewable energy. find themselves in uncharted Even as India increases the share More than 30 businesses and territory, where legacy regulations of renewable energy on the grid experts from India’s EV value do not provide the intended under its ambitious international chain co-created this policy social benefits but instead often commitments, it must liberalize paper. It provides consensus- become bottlenecks to growth. regulations for charging stations based recommendations for Policymakers must proactively to aggregate demand and policy improvement to accelerate resolve such challenges. Today, procure renewable power. adoption of EVs across these challenges are most commercial fleets and is based acute for setting up of charging The recommendations on inputs from early adopter infrastructure. Regulatory proposed in this paper support businesses that are building provisions must be created so the government’s vision of solutions and investing in in the as to set clear responsibilities for encouraging clean kilometers transition today. the costs to be incurred for the over vehicle volumes. We We hope that this paper will grid upgradation and real estate emphasize the creation of help socialize the collated policy acquisition that are required to set market rules that will help recommendations across up India’s charging infrastructure attract the private investments India’s EV value chain – but and to define how these costs required to build India’s new most importantly, enhance the would be socialized. energy infrastructure and prioritize business models that collaboration between Indian policymakers and businesses.
9 Policies for India’s global leadership on EV adoption 1 Introduction
1010 PoliciesPolicies forfor India’sIndia’s globalglobal leadershipleadership onon EVEV adoptionadoption 1 Introduction
Countries and vehicle manufacturers around the world are navigating an inevitable About FAME transition from internal India’s national flagship incentive scheme for EV adoption is combustion engine (ICE) vehicles known as the Faster Adoption and Manufacturing of (Hybrid to electric mobility. With global &) Electric vehicles (FAME) scheme. The second phase of sales of just 2.6% in 2020, EVs scheme, i.e., FAME II, is structured to prioritize clean mobility vs are expected to account for clean vehicles. An outlay of INR 100 billion (USD $1.38 billion) nearly 57% of all vehicle sales by has been allocated to encourage faster adoption of EVs and 2040.5 The year 2020 was pivotal support deployment of charging infrastructure, over a three- and saw Europe join China in year period (2019-22) by Department of Heavy Industries (DHI). the rapid uptake of EVs. As the rest of the world joins in, national Given India’s multitude of priorities and limited resources, this and sub-national governments policy paper fully agrees with and acknowledges this policy around the world are supporting approach. this transition through policy measures, incentives and regulation as part of their service, favorable indirect initiatives and Indian businesses emissions reduction, energy taxation for electric vehicles, such as Flipkart, State Bank of security and industrial strategies. direct tax benefits for individual India and Wipro have committed India is in the process of building owners of EVs and state-level EV to the globally recognized EV100 an electric mobility ecosystem policies across most large states targets. through its flagship FAME India form fertile ground for a fast As early EV adoption gathers scheme,6 supported by several transition. momentum in India, this national and sub-national As the government creates report collates inputs from initiatives. an enabling policy landscape, businesses that are building India has a strong policy forward-looking businesses solutions, making investments foundation to support a in India are stepping up to and adopting electric vehicles, transition to EVs. Capital support the transition. Leading to provide feedback on how incentives for EV adoption, global and Indian businesses policies can better support performance-linked incentives have announced plans for their efforts to accelerate the (PLIs) for manufacturing, de- commercial fleet electrification, transition. licensing of charging as a manufacturing and R&D
Photo credits: Tata Power
11 Policies for India’s global leadership on EV adoption This report considers how Two-thirds of the intended tomorrow. Unbiased regulations the FAME scheme can be FAME II scheme duration has to eliminate artificial distortions evolved to make India a global elapsed (as of March 2021), but related to land allocations could electrification leader. However, a significant portion of the fund enhance confidence among the FAME policy alone is not the remains underutilized (as of private charging businesses and only policy solution to the broad April 2021).7 spur investment. Remodeled array of challenges related to regulations enabling renewable EV adoption. The report further For example, private e-buses energy (RE) sourcing for the provides inputs on non-FAME could be included within the charging infrastructure can fiscal and non-fiscal measures ambit of the FAME scheme, ensure that India’s transition to support new business models as they constitute 90% of the to electric mobility is powered and address challenges linked entire bus fleet share in India, using RE. with early adoption. It also align with government vision captures best practices from and enjoy significant market Enabling a faster transition city- and state-level policy traction from many service requires collaboration innovations that can be scaled providers and corporate between policymakers and up to all regions of the country. customers. Similarly, improving the private sector. A nimble driver incomes by intervening in policy environment with a clear By liberalizing the scope infrastructure requirements of direction and purpose is key to a of the FAME scheme to last-mile connectivity; non-fiscal successful transformation. Such cover promising new high- measures such as instituting a transformation will not just utilization use cases and low-emission zones, relaxing enable the clean, safe, affordable market segments where daytime entry restrictions for and efficient movement of there is proven traction and urban freight EVs, legalizing people and goods, it will create a strong alignment with the e-bike taxis and streamlining the enormous economic, social government’s vision of clean licensing of e-bike rentals across and environmental benefits for kilometers through shared states can encourage adoption the country. This report and mobility, India could enable and shift behavior. Definition of WBCSD’s REmobility project aim higher fund utilization and market rules for attracting private to foster this collaboration. result in compounded benefits investment in charging can WBCSD has been working with for the entire ecosystem. help build the infrastructure of India’s EV value chain under
12 Policies for India’s global leadership on EV adoption Approach its REmobility coalition with Both these reports emphasized • High-impact and scalable the objective of accelerating how business leadership can use cases in proximity commercial fleet electrification. capture the early EV adoption to economic viability are As part of our efforts, WBCSD opportunity. prioritized. introduced a how-to-guide for businesses looking to adopt The present paper informs • Promising new business EVs.8 This document is a ready relevant policymakers on models are supported. reckoner for businesses looking market feedback from early EV businesses adopters and • Ease of doing business to adopt electric vehicles. It becomes a policy priority. identifies employee transport, describes how different policy ride hailing and deliveries as the interventions can accelerate EV • Market rules support private most prominent high-utilization adoption by businesses. investments and provide use cases, ready for scaling up in The selection of long-term certainty. the Indian context. A subsequent recommendations for this report documentation of India’s first all- • Driver incomes are ensures that: electric car ride-hailing company, enhanced and new income BluSmart,9 was released in • There is shared, balanced opportunities are created 2020 to support electrification understanding and alignment across use cases. of ride-hailing across all similar on recommendations by services in India and globally. businesses, after accounting for varying perspectives.
13 Policies for India’s global leadership on EV adoption help accelerate commercial early adopters (businesses), Engagement timeline and fleet electrification in India and validating the recommendations, process encourage private investments presentation to relevant In 2020, WBCSD convened in the setting up of charging ministries and incorporation more than 30 businesses and infrastructure. This paper is of policymakers’ feedback, experts from across India’s EV the product of a structured developed over a period of 1.5 value chain to draw a set of approach, including evaluation years. The engagement timeline high-level policy and regulatory of the existing policy landscape, and process are illustrated in the recommendations that can seeking recommendations from figure below.
Policy paper engagement timeline and process Figure 1:
Evaluation of existing policies I Aug–Sep 2019
1 Workshop - WBCSD India Day
2 Workshop - REI Expo 2019
Recommendations from businesses II Mar–Apr 2020 Four virtual web meetings on each section
3 Deliveries 4 Employee transport
Validation from companies 5 Ride-hailing 6 Charging/swapping III ct 2020
7 Virtual web meeting Draft validation from companies
Feedback from policymakers IV Nov–Dec 2020 Virtual web meetings with ministries
8 Department of Heavy Industries (DHI) V PAPER LAUNC Jun 2021 9 Ministry of Power (MoP)
14 Policies for India’s global leadership on EV adoption and intends to serve as a consciously focuses on policy Scope resource for India’s transition or regulatory recommendations This report focuses on towards electrifying fleets for a defined scope of certain commercial fleet adoption and increasing investments in users, technologies, markets, and related charging/battery charging infrastructure. transportation modes and swapping infrastructure. vehicle segments mentioned It evaluates unaddressed The report does not claim to in the figure below (refer to the barriers to commercial fleet be an all-inclusive coverage endnotes to read about the electrification, identifies of policy recommendations considerations behind their actionable policy and regulatory on EV adoption in India and exclusions).10 opportunities for policymakers,
Scope of the paper Figure 2:
Within scope Beyond scope Road transport Non-road transport modes – aviation, Transportation mode shipping and railways. Also mining, construction and agriculture
Battery electric vehicles (BEVs) Hybrid electric vehicles Vehicle technology Hydrogen/fuel cell vehicles
2Ws, 3Ws (passenger, goods), 4Ws (cars), Heavy-duty freight vehicles, i.e., trucks Vehicle segments small/medium commercial vehicles (SCVs/ (HCVs) MCVs) and buses
Fleet adoption (across high utilization use Personal transport User segment cases of ride-hailing, employee transport, urban freight and deliveries) Public transport
Demand-side initiatives for fleets and Manufacturing and other supply- Market segment charging point operators (CPOs)/battery side initiatives for original equipment swapping operators (BSOs) manufacturers (OEMs) and component makers such as Make in India Service-related initiatives for charging/ battery swapping
15 Policies for India’s global leadership on EV adoption of related charging infrastructure. (3) EV charging infrastructure Sections The recommendations presented recommendations and (4) High- This paper recommends a in the paper are broadly utilization use case-specific pool of 18 actionable policy classified into three distinct recommendations with the use and regulatory opportunities categories: (2) Foundational cases defined in the scope to accelerate commercial fleet sector-wide recommendations, above. electrification and deployment
2. Foundational sector-wide recommendations This section explores overarching recommendations that could lay the foundations for a profound transformation, across the EV ecosystem (primarily fleets) and address all use cases for EV adoption.
3. EV charging-related recommendations Characteristics unique to commercial fleets – predictability of journeys/routes and constancy of daily trips – support planning and occupancy of associated infrastructure, which is an advantage for fleet adoption. This section explores policy and regulatory measures to create a competitive, scalable market for setting up charging/battery swapping infrastructure.
4. Use case-specific recommendations This section explores policy and regulatory measures to accelerate EV adoption in three high-utilization use cases. Three of the most scalable use cases in India for fleet electrification, identified collaboratively by WBCSD’s REmobility coalition, are employee transport, ride-hailing and urban freight/deliveries – also covered in WBCSD’s earlier reports. These three use cases make a strong case for EV transition because of proximity to total cost of ownership (TCO) parity, high emissions/pollution reduction potential and greater alignment with FAME’s existing focus on high-impact vehicle segments.
4a. Employee transport 4b. Ride-hailing 4c. Deliveries Mobility service providers App-based and conventional Vehicle segments employed by contracted by employers to ride-hailing services, which operate logistics fleets, e-commerce transport employees. These service in cities. This use case considers companies, online food and grocery providers support corporate clients 2Ws, 3Ws and cars. companies and more, for their with any or all mobility purposes: last mile-deliveries. This use case airport ferries, ad hoc meetings and considers 2Ws, 3Ws, SCVs and employee transport using cars and MCVs. buses.
16 Policies for India’s global leadership on EV adoption
Analysis framework Classification of (c) Regulatory provisions: Rules and directives to mandate, recommendations The paper covers each of the encourage, enable, limit or recommendations following an Each recommendation in the otherwise direct subjects to analysis framework that has the report has been classified based act according to policy goals following three layers: on its type, presented through (for example, liberal regulations varying colored boxes, as Identify fleet enable virtual power aggregation (a) Context (WHAT): illustrated. EV and related infrastructure for charging stations to avail RE). development opportunities, (a) FAME-related examining the current landscape. Policy recommendations: What do these colored instruments related to demand boxes in the paper Understand incentives, which directly help (b) Rationale (WHY): represent? market barriers for fleet EV in demand generation of EVs uptake that could be addressed and deployment of related Recommendations based on through policy or regulatory infrastructure, by reducing the their nature/type intervention, developing a cost of acquisition. FAME-related recommendations robust rationale to pursue the recommendations for Non-FAME fiscal measures (b) Non-FAME fiscal measures: policymakers. Fiscal policy instruments other Regulatory provisions than FAME, given to institutions
(c) Recommendations (HOW): to ease the economic burden Determine a policy or regulatory (such as relaxation in taxes), in recommendation and, in a few the overall interest of society. cases, the mechanism for its implementation.
17 Policies for India’s global leadership on EV adoption Summary: Actionable opportunities
This table lays down 18 charging infrastructure, divided segments and its relevance to actionable policy and regulatory into three sections. It also key government stakeholders. opportunities to accelerate classifies each recommendation Interventions listed here are commercial fleet electrification based on its type/nature, its detailed in the subsequent and deployment of related applicability to relevant vehicle chapters.
S. No. Recommendations Vehicle Key govt. FAME Non-FAME Regulatory segments stakeholder incentives fiscal provisions measures (2) Foundational sector-wide recommendations [F] F1 Set out a national EV ambition F2 ICE vehicle scrapping incentives linked to EV adoption F3 Provide EV leasing with a level playing field with respect to EV buying F4 Institute low-emission zones (LEZs) F5 Exemptions, discounts and incentives to EVs
(3) EV charging-related recommendations [CI] CI1 Support market creation for private All MoP, charging investments DISCOMs CI2 Facilitate allocation of affordable and All ULBs accessible land parcels for private investors for charging operators in cities CI3 Permit battery swapping to allow 2W, 3W MoP access to FAME subsidy and EV tariff CI4 Reduce GST on charging and battery All MoF swapping services CI5 Liberal regulations enabling virtual All MoP power aggregation and/or lower open access threshold for charging stations to avail RE
18 Policies for India’s global leadership on EV adoption S. No. Recommendations Vehicle Key govt. FAME Non-FAME Regulatory segments stakeholder incentives fiscal provisions measures (4a) Use case 1: Employee transport [E] E1 Include privately operated e-buses Bus DHI within the ambit of the FAME II scheme E2 Extend FAME subsidies to institutional 4W DHI and corporate buyers for e-cars
(4b) Use case 2: Ride-hailing [R] R1 Legalize e-bike taxis and streamline 2W MoRTH, licensing of e-bike rentals across RTOs states R2 Waive toll fees and airport charges for 4W MoRTH EV taxis
(4c) Use case 3: Deliveries [D] D1 Experiment with daytime entry of SCV, MCV ULBs electric SCVs and MCVs into cities for a timebound period D2 Allocate FAME funds to subsidize SCV, MCV, DHI, MoF, certified retrofitting kits for electric HCV MoRTH SCVs and MCVs for a timebound period D3 Enable permit flexibility for usage of 2W MoRTH e-2Ws across use cases D4 Consult and revise regulations for 2W ARAI e-2Ws related to motor power ratings and OEM licensing structure
19 Policies for India’s global leadership on EV adoption 2 Foundational sector-wide policy recommendations Photo credits: Lithium credits: Photo
2020 PoliciesPolicies forfor India’sIndia’s globalglobal leadershipleadership onon EVEV adoptionadoption 2 Foundational sector-wide policy recommendations
F1. Set out a national EV ambition SETTING TARGETS AND MANDATES AS THE CORNERSTONE OF THE EV ADOPTION STRATEGY
about the rate at which A national EV ambition, Rationale the Indian government is along with a roadmap for A national target and envisioning the EV transition. implementation, will provide commitment have made clarity and set the path for a India a global leader in RE. Road transport emissions in successful transition. India is To keep the country’s auto India, accounting for 87% of already a signatory of Clean sector competitive and reduce transport sector greenhouse Energy Ministerial’s (CEM) emissions, India must invest in gas (GHG) emissions today, are EV30@30 campaign, with an electrification. Businesses look expected to increase by more objective of a 30% new sales to governments to provide than 500% by 2030 (compared share for EVs by 2030. consistent, ambitious targets to 2005 levels).11 Also, India’s combined import bill for fossil and clear timelines to give them Global precedence clarity and confidence on the fuels is expected to triple over way forward. While recent Indian next two decades, with oil Globally, 17 countries EV policy advancements are for road transport being the have announced 100% encouraging electrification, largest component, pointing to zero-emission vehicle (ZEV) continued risks to the country’s targets or phase-out targets of the absence of ambition and 13 mandates leaves ambiguity energy security.12 ICE vehicles through 2050.
Global EV ambition or ICE phase-out timeline13 Figure 3:
Norwa Denmar German 2025 2035 2050 Cabo Verde Costa Rica
Iceland Portugal Ireland France Israel Spain 2030 Sweden 2040 Canada nited ingdom Sri Lan a Netherlands Slovenia
EV sales/stoc s target ICE phase-out target
21 Policies for India’s global leadership on EV adoption Summary of India’s EV ambition announcements Figure 4:
2017 2018 2019 – MoP minister – – MoRTH – 2W automakers April, 2017 January, 2018 June, 2019 India eyeing all-electric car fleet confirms NITI Aayog has drafted strongly object to NITI Aayog’s by 2030 GoI’s EV policy, and it awaits proposition of all electric two- cabinet approval wheelers by 2025
– Target of 30% new – GoI decides June, 2017 February, 2018 EV sales by 2030 as a part of against formulating national- CEM’s EV30@30 campaign level EV policy and targets
– MoRTH – Maruti Suzuki September, 2017 July, 2018 minister – reaffirms 2030 target India Ltd. considering to sell 1.5 million (15 lakh) electric cars in India by 2030
– NITI Aayog, November, 2017 RMI releases a 2032 EV transition trajectory
– SIAM December, 2017 whitepaper – target of 40% new private and 100% new public transport vehicles by 2030
Government announcements Private sector announcements India is yet to come up with a access and efficiency through COP26, scheduled in November national-level EV target, that better planning for space and 2021, could be a suitable platform is supported by regulatory public transport infrastructure, for India to unveil its national-level, framework of mechanisms. promoting modal shifts to long-term EV ambitions. Past announcements and more sustainable options and efforts between ministries managing the overall transition A starting point (base case) and private bodies have been to sustainable mobility through towards formulating an ambition un-coordinated and subject to development of a national could be the recommendation revisions roadmap for action. made by the Society of Indian Automobile Manufacturers To galvanize investment and (SIAM)14 in 2017, i.e., Recommendation(s) business action specific to electrification of 40% of new Formulate and announce accelerated deployment of sales in the 2W, 3W and car a national EV target shared electric mobility, the Indian vehicle segments and 100% government should consider of public intracity vehicles by There is a need for an open- announcing an ambitious national 2030. It could further consider minded collaboration between commitment. WBCSD and its 100% electrification of new sales businesses and governments partner for electric mobility of commercial fleet vehicles to formulate India’s EV ambition. ambition and action in India, The by 2025 as its North Star Putting together an EV ambition Climate Group, are engaging ambition,15 in the 2W, 3W, car statement should be a part companies in the EV ecosystem and bus vehicle segments. We of a larger industry dialogue to formulate and align on an believe that a more ambitious that considers a systemic EV ambition that can act as a target is both pragmatic and transformation towards catalyst and support the Indian advantageous as it will help sustainable mobility, including government to announce an galvanize investments required deliberating on the role of private EV-specific ambition. The 2021 for a now-inevitable energy and shared mobility in India’s United Nations Climate Change transition in mobility. transportation future, improving Conference, also known as
22 Policies for India’s global leadership on EV adoption F2. ICE vehicle scrapping incentives linked to EV adoption GENERATING DEMAND FOR EVs THROUGH SCRAPPING OLD ICE VEHICLES
transit passes (Canada), rebates The Indian government has Rationale on purchase of new cleaner recently announced its vehicle As many as 22 million ICE vehicles, i.e., compressed scrappage policy in the 2021 vehicles will reach end-of-life natural gas (CNG), electric or budget, the details of which are between 2019 and 2025.16 hydrogen (Italy) and many others. expected to be unveiled soon. Government-budgeted Both the amount and nature of The Ministry of Road Transport scrappage programs are widely financial incentives determine and Highways (MoRTH) released adopted across the world to participation. Linking vehicle a draft ‘Consultation note eliminate polluting and inefficient scrappage with the purchase of on scrapping of commercial vehicles from the road. The EVs serves the dual purpose of vehicles’ in 2018. The note nature of incentives to promote managing the current fleet of old is suggestive of applicability replacement (scrappage) of old ICE vehicles while accelerating of FAME incentives on the vehicles varies, ranging from EV penetration.17 purchase of new EVs against cash grants (Austria), public scrapped ICE vehicles.18
Global precedence - In 2014, France launched a scrappage scheme where the government offered a discount of France INR 0.35 million or USD $4,500 (5–10% of the average EV price) against the price of a new EV and INR 0.25 million or USD $3,400 for new plug-in hybrid EV (PHEV) if the vehicle being scrapped was over 13 years old.
- The USA announced a Cash for Clunkers-type plan of USD $454 billion over 10 years to offer USA incentives to trade in gas cars for electric, hybrid or hydrogen fuel cell vehicles.19
Recommendation(s) Provide subsidy for old ICE vehicle replacement (scrappage) against the purchase of new EV Given that fleet operators are major buyers of vehicles and that their fleets reach end of life (EoL) early compared to individual users on account of higher utilization rates, extending such incentives to fleet operators ensures a faster transition to e-mobility.17
23 Policies for India’s global leadership on EV adoption F3. Provide EV leasing with a level playing field with respect to EV buying ENCOURAGING NEW OWNERSHIP MODELS THAT FACILITATE FASTER EV ADOPTION
Supportive government policies • Leasing companies assume Rationale can create a higher risk appetite the resale risk of EVs and Vehicle ‘usership’ is growing among leasing companies in promote EVs through their prevalence around the world financing the products that the financial and operational over vehicle ‘ownership’. market has to offer. This could leasing services. They should Corporates are relying on catalyze growth of EVs among benefit from favorable interest financially and operationally corporates. rates and attractive financial leased vehicles across use products. This benefit would cases, as they realize savings Global precedence trickle down to end-users and in operations. E-mobility customers as well. compounded with leasing Hotspots for EV leasing are could support corporates in majorly developed markets • Most leased vehicles are meeting their sustainability goals, such as Europe (Belgium, registered as commercial. The reduce the burden of upfront Luxembourg, Netherlands charges for reselling vehicles investments, avail operational and Sweden) and the USA, to private use are substantial cost savings and address where both original equipment – this hampers the viability short-term technology risks manufacturers (OEMs), such as of a healthy resale market. associated with the values of BMW, Volkswagen and Volvo, Therefore, resale charges EVs. Companies in India such as and leasing companies, such as should be waived for leased LeasePlan and Energy Efficiency LeasePlan, ELD Electric, Go Arval EVs moving to the private Electric and AlphaElectric, are market at the end of lease Services Limited (EESL) have 20 pioneered EV leasing models expanding operations. period. and taken the lead in enabling this transition. Recommendation(s) • A new section 80EEB was introduced in the union Right now, leasing companies Encourage leasing of EVs budget 2019 allowing a in India do not benefit from amongst corporates through deduction for interest paid on EV-related subsidies or fiscal policy support loans taken for the purchase support. The future residual • Leasing should be recognized of EVs for individuals. Income (resale) value of EVs is practically as a valid mode of financing, tax benefits under this section a black box in this nascent and incentives such as should be extended to market. A key concern for subsidies and tax breaks corporates, which would make leasing companies has been that are applicable on EV leasing EVs an attractive the high risks associated with loans could be extended to proposition for them. the future marketability of companies procuring EVs for available products. the purposes of corporate leasing.
24 Policies for India’s global leadership on EV adoption F4. Institute low-emission zones (LEZs) TACKLING LOCAL POLLUTION AND EMISSIONS IN CITY CENTERS
Rationale The relative advantage of EVs can be highly transformed by creating a situation where the access of emitting vehicles is restricted. 21 out of the top 30 most polluted cities in the world are in India.21 LEZs provide a targeted way to combat air quality and pollution problems that are worsening the state of urban core cities and imposing significant economic costs to health of citizens.
Global precedence
- The movement of emitting vehicles is restricted temporarily or permanently in certain Paris, France zones depending on the air quality values.22 The penalties for violation range from INR 6,000 to INR 33,500 (USD $82 to USD $450) and vary according to vehicle type and the fuel standards that need to be met.
- The LEZ in London encourages the most polluting heavy diesel vehicles to become London, UK cleaner. Penalties are imposed on vehicles not meeting the LEZ standards.23 Most EVs are exempted from congestion charges levied for entering the city on weekdays.
Recommendation(s) Implement LEZs in focus cities with underlying elements such as: • Designate congested markets and commercial streets as LEZs across major cities across India.
• Introduce phased fuel standards that need to be met in LEZs (EVs being exempt).
• Introduce congestion pricing/fees for ICE vehicles to operate in LEZs where required.
25 Policies for India’s global leadership on EV adoption F5. Exemptions, discounts and incentives to EVs MEASURES TOWARDS IMPROVING EV COST COMPETITIVENESS
the upfront purchase cost of waivers and discounted EV Rationale EVs. Some of the measures tariffs The government should announced in India at the central introduce an array of and state levels include: All these regulations, measures improving the accompanied by the cost competitiveness of EVs, • GST reduction for EVs recommendations below, should to reduce the upfront cost from 12% to 5% and for EV be adopted uniformly across all disadvantage. These measures chargers from 18% to 5% Indian states. include providing financial and nonfinancial incentives, • Green registration plates for ZEVs for distinct identity Global precedence disincentivizing ICE vehicles Some of the top EV markets in through taxation and offering EV • State-led measures such the world reveal a strong reliance exemptions such as tax and toll as road tax waivers, free on exemptions in the early waivers, all of which can reduce EV parking, registration tax stages of growth:
- EVs benefit from free parking and value-added tax (VAT) exemptions.24 Norway - EVs are exempted from registration tax.24 Denmark - EVs are exempted from sales tax.25 China
Recommendation(s) State-level actions: • Uniform implementation of national schemes across states
• Road tax waivers, free EV parking, registration tax waivers, concession/exemption from road tolls, subsidized electricity for charging and dedicated pick-up/drop points for EVs such as taxis and delivery vehicles. A financing mechanism similar to the one proposed in the Delhi EV policy26 could be followed, i.e., creation of an umbrella, non-lapsable ‘state EV fund’ that is to be financed through additional taxes/ cesses on polluting vehicles, such as a pollution cess, road tax or congestion fee.
National-level actions: • Waiver of Social Welfare Surcharge (SWS) on import of EVs
• Ranking the states on an “EV attractiveness index” based on the above parameters
26 Policies for India’s global leadership on EV adoption 3 EV charging-related policy recommendations
2727 PoliciesPolicies forfor India’sIndia’s globalglobal leadershipleadership onon EVEV adoptionadoption 3 EV charging-related policy recommendations EV fueling is an activity that is of public charging facilities. Despite the involvement of integral to operating EVs. Lack of Public entities such as Energy the aforementioned entities, accessible charging/swapping Efficiency Services Limited several challenges remain with infrastructure is one of the (EESL), National Thermal Power respect to planning, deployment top barriers to EV adoption in Corporation (NTPC) and state and operations of charging developing EV markets such as power distribution utilities have infrastructure, which have India27 – a survey conducted by already taken some initiatives to resulted in slower progress Volvo Cars-Harris revealed that this end. While most chargers than required. The challenges a robust charging infrastructure have been set up in cities, the included in this section are network is the most important government has also focused related to unclear market rules enabler to procure EVs. Hence, on deployment on highways and on grid upgradation; uncertain deployment of an accessible, expressways. grid upgradation timelines and available and affordable charging artificial distortions related network in India is instrumental The central and state to land hindering private for any electrification ambitions governments in their continued investments in charging; in the transportation sector. effort to support the creation absence of subsidy support of charging infrastructure to battery swapping; double Charging infrastructure in India have made steady progress taxation levied on charging is still in its infancy. The FAME on policies and regulations. services; and operational II scheme launched in 2019 For example: (a) delicensing of difficulties related to the had an initial outlay of INR EV charging infrastructure by open-access regulation 10 billion (USD $138 million) the Ministry of Power (MoP) to threshold. This section covers to support the installation of create a scalable competitive recommendations across charging infrastructure. The market; (b) provision for 20% various aspects of the charging central and state governments parking space reservation for EV infrastructure and battery are encouraging central and charging in new establishments swapping landscape that could state public sector undertakings by the Ministry of Housing and catalyze the progress already (PSUs), state power distribution Urban Affairs (MoHUA) through made on deployment and companies (DISCOMs) and other the model building bylaws; (c) operations. public agencies, including urban recognition of battery swapping local bodies (ULBs) and urban/ as a mode of charging by MoP area development authorities, and more. to support the establishment
28 Policies for India’s global leadership on EV adoption CI1. Support market creation for private charging investments INSTITUTING CLEAR MARKET RULES TO SET UP CHARGING INFRASTRUCTURE
A key issue related to charging term and recovered through Context infrastructure is the lack of profitable sale of power in EV charging is a new domain market rules around setting out the longer term. Transferring for many of the public and responsibilities in terms of who the entire burden to CPOs/ private entities, which presents pays for the grid upgradation BSOs or fleet operators will be challenges in defining unbiased – the fleet operator, the real detrimental to the transition. market rules that create estate owner, the charging public good. Various issues point operator (CPO)/battery Revisiting governing market rules directly influence the ease of swapping operator (BSO) or the and instituting clear guidelines doing business with respect DISCOM. It is important that for both DISCOMs and fleet to installation or operation of this grid upgradation capital operators/CPOs/BSOs may charging infrastructure. cost be socialized in the short accelerate the installation of EV charging networks in the country.
Photo credits: Tata Power
29 Policies for India’s global leadership on EV adoption Rationale
Subject Rationale • FAME does not earmark any financial assistance to DISCOMs or CPOs with regard to Market rules: grid grid upgradation. In the absence of transparent market rules or any financial support, the upgradation cost operators are compelled to pay for all upgradation costs on instances, disregarding who owns the asset. The quantum of cost is sometimes as high as the total cost of charging infrastructure altogether.
• Parallelly, DISCOMs face an infrastructure challenge, that is not supportive of adding incremental load onto the system and requires them to invest heavily. • There are two types of connections – Low Tension (LT) and High Tension (HT), the Market rules: low thresholds of which vary across states. For states like Haryana, the LT threshold is 50 tension (LT) threshold kW,28 while it is as high as 200 kW for states like Delhi.29
• As per LT regulations, DISCOMs are not expected to charge the applicant for grid upgradation, except for a nominal development charge if the concerned load is below the LT threshold.
• Fleet operations require setting up of a good quantum of chargers (both fast and slow). However, states having an LT threshold of ~50 kW allow for only three DC001 chargers of 15 kW each, compelling the CPOs and fleet operators to bear the expenses for an HT connection if they wish to set up more than three such chargers. These additional expenses burden operators financially. • The service level agreements (SLAs) for grid upgradation are often not defined and the Uncertain timelines time taken by some DISCOMs is as long as six months.
• This affects project timelines and project costs negatively, primarily owing to the high unutilized leased land rentals. • In August 2019, DHI invited proposals from PSUs, ULBs, private charging operators and Commercial hubs others to set up public charging stations in cities. As per the expression of interest (EoI), and workplaces three types of applications were considered:30 Category A covered stations at public places used for commercial purposes, including parking lots, petrol pumps, malls and market complexes; Category B covered stations at government offices; and Category C covered stations for commercial use at semi-restricted locations (for example, stations set up by taxi operators). As per the DHI, charging stations installed in such locations can avail of EV tariffs.
• Commercial hubs and workplaces may fall under Category A or C. While these sites can avail of EV tariffs, setting up separate meters and connections for chargers has proven to be challenging. In addition, big commercial hubs and workplaces often procure (captive) power through open access, thus increasing the complexity for DISCOMs to set up separate metered connections for charging infrastructure.
30 Policies for India’s global leadership on EV adoption Recommendation(s)
The MoP could explore new models of financing the required grid Market rules – grid upgradation: upgrades (For example, democratization or sharing mechanisms to share the upgrade costs).
The MoP could consider increasing the threshold of LT connections for Market rules – LT threshold: EV charging to 200 kW across states, through issuing an advisory to the forum of regulators (FoR), the central electricity regulatory commission (CERC) and state electricity regulatory commissions (SERCs).
DISCOMs should define the SLAs and maximum timelines for grid upgradation. Uncertain timelines: The MoP should support and facilitate extension of separate EV Commercial hubs and workplaces: connections to commercial hubs and workplaces.
DHI should consider facilitating cabinet approvals and Market rules – grid upgradation: amendments to the FAME scheme, re-appropriating a portion of funds allocated for charging towards DISCOMs aimed at funding the grid upgradation cost required for setting up the charging infrastructure.
AND/OR
The MoP should consider providing funds to DISCOMs through the Integrated Power Development Scheme (IPDS), or other means, to support the grid augmentation required for large- scale installation of charging infrastructure.
There is an existing global precedent that can be reviewed by the government: the US Department of Energy’s Technical Assistance Grants to set up charging infrastructure. The Clean Cities Program offered technical assistance grants to cities to develop EV charging infrastructure plans.
31 Policies for India’s global leadership on EV adoption CI2. Facilitate allocation of affordable and accessible land parcels for private investors for charging operators in cities ENABLING A LEVEL PLAYING FIELD FOR ALL COMPETITORS IN THE CHARGING BUSINESS
In the DHI’s phase I of tendering Context of subsidy for charging Rationale The early stages of the market infrastructure in cities, private • Land rentals and leases have observed a lack of companies were mandated form a considerable cost accessible and affordable land to have a prior MoU with component for CPOs. They for CPOs where chargers can be location owners that meant increase the delivered cost set up for optimal utilization by routing applications through of power to end users and fleets and personal users. Fleet local city authorities. However, further diminish the business operators or CPOs are required the process for competing case for charging operators in to undergo lengthy processes PSUs in the tender was eased the short term. for permissions and approvals out, wherein they were allowed • The lack of affordable from DISCOMs and ULBs to set to send applications to DHI the land pockets and the high up charging points at optimal without the need for well tied associated cost of grid locations. Private investors face up contracts. Additionally, most upgradation are two of the a challenge in getting good PSUs benefit from having captive top challenges for charging locations at suitable prices. Due land parcels in cities. to regulatory distortions, CPOs companies and fleets. and fleet operators are often left For the market to spur private Policy support to allocate with the choice of commercial investments, there is a need favorable land parcels for real estate locations to set up to eliminate such artificial chargers could attract private charging infrastructure, where distortions and establish a level investment and initiative at a the value and cost of land is high. playing field for all competitors to greater scale. access affordable land parcels.
Recommendation(s)
ULBs should earmark land parcels for charging infrastructure and/or allocate land to both government and private agencies assuming consistent parameters. Either approach could be followed: • Government-owned locations for charging stations could be earmarked by the local administration through consultations with industry (CPOs and fleet operators).
• ULBs could organize competitive bids, similar to those for parking operators in cities, for CPOs, both private and government-owned, to set up charging infrastructure on ULB-owned land parcels; favorable land rentals could also be used as incentives for CPOs to invest in charging infrastructure.
32 Policies for India’s global leadership on EV adoption CI3. Permit battery swapping to allow access to FAME subsidy and EV tariff ADOPTING A TECHNOLOGY-AGNOSTIC STANCE ON EV FUELING
peak operations inhibits drivers’ 3W across use cases such as Context earning opportunities. deliveries, ride-hailing, bike/ India is a 2W- and 3W-dominant scooter rentals and others. market. In FY20, 2W and 3W Battery swapping is an attractive sales made up ~85% of total proposition in high-demand Like direct (conventional) domestic motor vehicle sales.31 areas where the opportunity charging, a precursor to India’s electrification ambitions cost for charging downtime is incentivizing battery swapping will, in large part, focus on significant. It is a proven enabler should be standardizing these segments. Refueling time for 2W electrification in markets the technology itself and has been an Achilles’ heel for such has Taiwan.32 India can developing protocols for commercial applications of EVs. lead the global market in handling and setting up stations While automakers and charging battery swapping technology; (communication protocols, companies now offer rapid wide-scale adoption could connectors, voltage, etc.). This charging, this issue still impedes also make India an exporter will alleviate policymakers’ the efficiency of commercial of technology and expertise. uncertainties around standards, fleet operations, for whom higher Battery swapping can enable performance and safety of driver wait time (idle time) during adoption of electric 2W and proven technology.
Photo credits: SUN Mobility
33 Policies for India’s global leadership on EV adoption The following table lays down the policy advancements on battery swapping technology over time.
Segment Current scenario • The 2W and 3W vehicle segments together account for 50% of the total FAME II subsidy FAME II package for vehicles. However, for charging infrastructure, most of the fund allocation is set to go towards chargers suited only for the car vehicle segment (as high-powered DC chargers are not suitable for 2W and 3W).
• Battery swapping has not been included within the ambit of the INR 10 billion (USD $138 million) charging infrastructure subsidy package in the FAME II scheme. Providing subsidies to only direct charging technology limits the transition opportunity for high- utilization, convenient, quick and proven battery swapping models.
33 • The MoP in June 2020 issued revised guidelines and standards for EV charging MoP Guidelines infrastructure, officially recognizing battery swapping as a mode of charging, deeming battery charging stations (swap stations) at par with conventional charging stations.
• The guidelines also apply to state governments. Many of the existing state EV policies do not recognize battery swapping, and so they fail to provide the necessary regulatory support to battery swapping operators (BSO). • In August 2020, the MoRTH allowed sale and registration of electric 2W and 3Ws without Sale of EVs w/o batteries.34 batteries
In 2019, the Federation of Indian Chambers of Commerce & Industry (FICCI) submitted a detailed position paper35 to the DHI recommending the inclusion of battery swapping within the ambit of FAME II. The paper helps to understand how the industry has previously represented the recommendation.
Rationale Value proposition for stakeholders through battery swapping Figure 5:
Benefits • Drastically reduced wait time of under 5 minutes compared to 1-1.5 hours of Drivers/fleet conventional fast charging operators • Higher daily utilization of 140 -160 km/day against fixed battery achieving 90-100 km/day due to charging downtime
• Increased driver earnings
• Reduced upfront cost enabling demand, as the battery, which constitutes 30-50% of the total EV cost, is separated from the vehicle
• Lowered swapping (fueling) fee on account of increased productivity of land • Supports demand load balancing as batteries can be charged during non-peak hours Power companies/ DISCOMs • Provide an energy storage solution as batteries can store RE during its generation peak • Increased battery life due to controlled charging conditions BSOs/Energy operators • Improved land utilization and increased revenue
34 Policies for India’s global leadership on EV adoption Recommendation(s)
The DHI should facilitate cabinet amendments to the FAME II scheme to include battery swapping: Battery swapping should be included in the ambit of the FAME II scheme. The subsidy for swappable batteries could continue to remain at INR 10,000 (USD $138) per kWh, the same as for fixed batteries in conventional EVs.
CERC and SERCs should release clarifications on EV tariffs for battery swapping operators: While the MoP’s guidelines officially recognize battery swapping as a mode of charging, swapping operators still face issues in availing EV tariffs in some states; most receive a delivered cost of electricity close to INR 9–10 (USD $0.12–0.14) per unit. CERC and SERCs, hence, should notify DISCOMs to facilitate EV tariffs for battery swapping operations.
Also, battery swapping should be acknowledged as a mode of charging in the state EV policies as well.
35 Policies for India’s global leadership on EV adoption CI4. Reduce GST on charging and battery swapping services EXTENDING CONSISTENT FISCAL BENEFITS TO EVS TO INCREASE AFFORDABILITY
Context The current GST applicable on EVs and electric vehicle supply equipment (EVSE) is 5%. In addition, GST applicable on services such as ride-hailing is 5%.36 However, the GST on EV charging and battery swapping as a service is 18%. This can be reduced to 5% as well, to facilitate investments and early adoption.
Rationale Photo credits: Ola Mobility Institute A key component in the operational costs of EVs is the results in double taxation affects auto drivers and delivery power expense/service paid by when coupled with taxes on EV personnel, who are at the lower users for charging or swapping charging and battery swapping end of the income segment. batteries in their vehicles. This services. Additionally, upon discounting cost is significant, especially the taxes on services, the loss in high-utilization cases, where Levying a tax of 18% on of revenue for the government 2/3Ws may swap 2–3 times a charging/swapping services associated with reducing GST day and charge their batteries increases the operating cost of on charging/swapping services fully 1–2 times a day. Electricity vehicles, adversely impacting the could be recovered through a already fetches taxes in the economic viability of EVs. Such financing mechanism proposed form of electricity duty. This a regimen disproportionately in recommendation F5.
Recommendation(s)
The Ministry of Finance (MoF) should rationalize the GST rate applicable on charging- and battery swapping-as-a-service: Charging- and battery swapping-as-a-service should be moved to a lower GST bracket of 5%.
36 Policies for India’s global leadership on EV adoption CI5. Liberal regulations enabling virtual power aggregation and/or lower open-access threshold for charging stations to avail RE ENABLE ACCESS TO CLEAN ENERGY TO POWER CLEAN MOBILITY
Amendment Bill. It is essential charging exist, in the form of Context that the two dots of RE and EV open access and on-site RE, The Government of India (GoI) connect, to derive maximum fleet operators/CPOs/BSOs has rightly encouraged the value from the EV transition. often face difficulty in accessing adoption of RE to power EVs, While multiple mechanisms to these mechanisms, as described through the Draft Electricity avail RE-sourced energy for below.
Mechanisms Challenges Open access Open access: Challenges to operators norms allow use of RE for loads • Charging demand is expected to be scattered and disaggregated. With the greater than 1 MW current utilization levels, it is a difficult proposition to achieve the 1 MW open access threshold for contracted demand for operators.
• Operators must, per regulation, schedule demand in advance; this is an added difficulty for operators.
Challenges to DISCOMs • DISCOMs will have to cater to real-time deviations caused by operators’ varying demand, and bear penalties as per the universal service obligation (USO)
• Net-metered operators who also choose to avail RE through open access may encounter accounting and grid security issues.
• High-end consumers moving to open access may drive up differences in commercial and subsidized tariffs, which may compromise revenue security for DISCOMs.
After the • Chargers may not always be set up at conventional stations where rooftops for On-site RE: Delhi Electricity Regulatory solar is available. Commission (DERC) policy on • The upfront investment and the scale required reduces the economic viability virtual net metering,37 operators of the projects. can consider rooftop solar and storage options to complement their power requirements
37 Policies for India’s global leadership on EV adoption have been reduced to a drawn by operators. The average Rationale substantial 79% compared to EV tariff (AET) in India across the RE-sourced EV charging offers ICE vehicles by transitioning to a states is INR 5.6 (USD $0.08) per two major benefits: renewables-dominated grid such unit, while the average residential as Sweden’s.38 tariff (ART) and average Reduced lifetime emissions commercial tariff (ACT) are INR The lifetime of EVs globally: 4.8 (USD $0.07) and INR 7.6 carbon dioxide (CO ) emissions Further reduction in power 2 (USD $0.10) per unit respectively. of EVs are about 22% lower tariff for operators over In the long In 2020, solar tariffs averaged than diesel cars and 28% lower commercial tariff: run, with the increase in charger between INR 3.5 to INR 4 (USD than petrol cars, even when they utilization, cheaper RE could be $0.05–0.06) per unit (subject to are driven and manufactured in an important lever in reducing open access charges). a coal-dominant grid such as energy expense, compared to Poland’s. The lifetime emissions the current commercial/EV tariff
38 Policies for India’s global leadership on EV adoption Impact of RE on life cycle emissions and power tariff38 Figure 6:
Scenario where average EU electricity is used to produce the Power tariffs in India batteries and the cars
-29% -25% Coal-dominated grid eq/km 2
-30%*
-79% RE-dominated grid Life cycle emissions in gCO cycle Life
4.8 4.0 5.6 7.6
Petrol Diesel Poland Sweden Average Solar Average Average residential tariff EV tariff commercial tariff (ART) (AET) (ACT) Driving (fuel/electricity production and use)
Car production Tariff (INR/kWh)
Battery production *Based on 2020 SECI Tenders – weighted average
Recommendation(s)
SERCs and DISCOMs should allow virtual demand aggregation of smaller charging stations to avail RE through open access: • CERC, FoR and SERCs should develop load management guidelines and consumption accounting guidelines for virtually aggregated CPOs/BSOs/fleet operators.
• DISCOMs should implement procedures of load management, consumption accounting and installation of smart meters for operators’ charging loads.
• Further, virtual accounting for operators to avail RE within the same DISCOM network or inter- DISCOM networks could be encouraged. This may lead to more DISCOMs meeting the renewable purchase obligation (RPO).
AND/OR
CERC and SERCs should explore regulatory mechanisms to lower the open access threshold of 1 MW for charging stations, so that stand-alone stations or virtually aggregated networks can achieve the threshold and avail RE: The mechanism should also support DISCOMs. This could be facilitated through the following measures:
• Allay technical constraints: The USO could be reviewed for open access – operators and DISCOMs could both be responsible for managing load.
• Allay accounting constraints: Open access and net metering with EV charging could pose accounting issues. Providing open access and net metering to the same consumers could be reviewed.
• Revenue security: Required tariff rationalization and transparent open access charges could be determined by eliminating subsidies.
39 Policies for India’s global leadership on EV adoption 4a Use case-specific policy recommendations – employee transport
4040 PoliciesPolicies forfor India’sIndia’s globalglobal leadershipleadership onon EVEV adoptionadoption 4a Use case-specific policy recommendations – employee transport
As India’s urban areas expand Today, the workforces in cities Electrification of employee in terms of population and demand mobility services transport is aligned to the workforce, the lack of reliable that are clean, efficient, fast, government’s vision of clean public transportation systems accessible and safe. With India and shared mobility. While many and passenger safety concerns becoming the largest offshoring companies (both services has given birth to a burgeoning destination, the ETS sector has and corporate customers), corporate employee transport a critical role in determining the having tested the waters, can ecosystem. The large ways in which urban mobility corroborate the business outsourcing services industry systems evolve, one of which viability argument for EVs, (IT/BPO) has been a major could be the transitioning of many other companies remain contributor towards the growth fleets to EVs. on the sidelines, primarily due of employee transportation to a lack of subsidy support services (ETS). ETS forms 23% Companies such as Google, for certain vehicle segments. of the pan-India taxi market, Amex, Accenture, Wipro and Policymakers have a vital role estimated to be worth USD $3.5 Adobe are known to have in enabling this transition and billion (as of 2017). The ETS deployed EVs for their employee realizing the latent EV demand market is projected to grow at transport requirements across through policy measures. This 13.7% (compounded annual major Indian cities. This in turn section highlights the need and growth rate or CAGR), primarily is supporting the creation of an measures to liberalize the FAME consisting of cars and buses. independent electric mobility scheme to accommodate fleet While COVID-19 proved to be a ecosystem with business segments (i.e., private e-buses tipping point for many forms of investments in electric fleets and corporate e-cars) relevant to people and goods mobility, the and charging infrastructure and employee transport, where there ETS sector was most disrupted, the emergence of new mobility is significant market traction. as most service sector business models. Service employees shifted to remote providers in the employee working. However, the post- transport ecosystem such as pandemic shifts are expected eee-taxi, Lithium Urban, Shuttl, to be positive overall as a return Glyd and rydS are emerging with to office working is inevitable in innovative models and solutions many ways. for customers.
Photo credits: Lithium
41 Policies for India’s global leadership on EV adoption E1. Include privately operated e-buses within the ambit of the FAME II scheme ELIMINATING SUBSIDY ALLOCATION ANOMALIES ACROSS VEHICLE SEGMENTS
employee transport, school Adoption of EVs by private bus Context buses and airport transfers. fleets in such high-utilization In the FAME II scheme, a budget cases would also be beneficial of INR 35.45 billion (USD $490 Many companies, such as from an emissions standpoint: 40 41 million) has been allocated for Shuttl and Lithium , have buses emit close to 0.92 kg of e-buses – only buses used for already expressed interest and CO2 per km, against 0.12 kg per public transport are covered. are adopting EV buses for the km, 0.2 kg per km and 0.35 kg The DHI had invited EoIs from employee transport segment. per km, for 3Ws, cars and SCVs cities to submit a proposal Similarly, there is latent demand respectively.42 for deployment of e-buses from forward-looking corporate under Gross Cost Contract customers who are encouraging Extending subsidies to privately (GCC) models. A total of their fleet partners to consider operated e-buses is in line with ~7,100 e-buses were subject e-buses. In 2019, we supported the FAME II standpoint of being to the scheme. But there are Shell India to evaluate the use of supportive to high-utilization and no provisions for private bus e-buses for employee transport high-impact (emissions) vehicle operators to avail subsidies. at the Bangalore Technology segments. Center. While commercial operations of other EV segments (i.e., Bus market in India – total stock (million)39 e-2Ws, e-3Ws or e-cars) are Figure 7: subsidized under FAME II, e-buses are excluded. This appears to be an anomaly, 0.17~10% million given that e-buses are largely aligned to the vision of clean and shared mobility.
Rationale ~58% ~32% Of the total 1.7 million buses in 1 million 0.54 million India,39 only 10% are owned by state transport undertakings (STUs). Providing subsidies to only STU-run buses limits the early transition opportunity for private players running buses with higher utilization (180–200+ STU fleets Corporate fleets Other private operators km/day) for use cases such as
42 Policies for India’s global leadership on EV adoption
Recommendation(s)
The DHI should support the inclusion of privately operated e-buses under the ambit of the FAME scheme: • The DHI can consider facilitating cabinet approvals and amendments to the FAME scheme, reappropriating a portion of the INR 20 billion (USD $276 million) fund allocated for 2Ws (which is unutilized) for privately operated e-buses.
• A subsidy mechanism for private bus operators could be introduced with a reduced quantum of subsidy per bus – targeting more buses with the same subsidy outlay.
• For transparency, public procurement tenders can form the basis of a private e-bus subsidy OR the state governments can issue tender-based rate contracts for private e-bus sales.
Examining FAME II budget allocation for e-2Ws Re-appropriating INR 5 billion Figure 8: (USD $70 million) from the 2W funds would mean an additional 1000 e-buses funding for 1,000 e-buses – assuming a subsidy quantum of If INR 5 billion of the remaining 180 INR 20,000 (USD $276) per kWh; budget is allocated for km/day this additional coverage could e-buses, an additional 1,000 serve the short-term demand 1,890 e-buses can be subsidized 300 coming from private e-bus day/year operators, airlines and airports and others. ~60Mn kg of CO ~44,000 e-2Ws sold under 2 avoided per year 110 FAME II (as of March ’21)
FAME II budget used FAME II budget remaining
43 Policies for India’s global leadership on EV adoption E2. Extend FAME subsidies to institutional and corporate buyers for e-cars SUPPORTING ELECTRIFICATION OF A RISING SEGMENT OF CORPORATE VEHICLES AND FLEETS
India car leasing market (2017–2030) Context Figure 9: Companies provide cars to their employees under a variety of USD $207 million schemes: car leasing market
• The company buys and leases cars operationally 20,000+ the car to the employee. The leased annually car belongs to the employee 20% on completion of the lease CAGR cars financially 60,000+ period. leased annually • The company provides a car as an in-kind benefit to middle and senior executives.
• The company provides a car 200 2,140
as part of the cost to company 2017 2030
(CTC) for the employee. Market Size (USD $ million) Presently, these corporate electric four-wheelers cannot claim subsidies under the FAME II scheme because the subsidies for e-4Ws are limited to high- utilization use cases such as taxis. Thus, this recommendation is the only exception in this report that is divergent to the guiding principle of high- utilization use cases assumed initially in the report. This exception is assumed because of the potential scale of the market. The Indian car leasing market is today worth USD $207 million and is poised to grow at CAGR 15–20% between 2020–30.
44 Policies for India’s global leadership on EV adoption Corporate EV leasing could • Corporates can design tax- Rationale benefit both employers and efficient salary structures for Corporates increasingly employees because of the employees. offer leased vehicles to their following reasons: employees. Corporate leasing • Corporates can use this as an has been a big driver for vehicle • A vehicle used solely for employee-retention benefit. sales globally and is catching official purposes by the up in India as well. With an employee attracts no tax • Employees need to make increasing number of businesses liability; any deduction from zero down payment (this is committed to acting on climate, salary on account of lease otherwise usually 20–30% of this market segment can be rental is a tax-deductible the on-road price). leveraged to promote sales of benefit. electric mobility.
Recommendation(s)
Evaluate extension of FAME subsidies to institutional/corporate buyers (including for financial leasing to employees) The DHI can consider facilitating cabinet amendments to the FAME scheme to include cars procured by corporates and leasing companies for a time-bound period. The subsidy from the FAME scheme would enable leasing companies and corporates to offer EVs for lease at lower and more favorable rates.
Photo credits: eee-taxi
45 Policies for India’s global leadership on EV adoption 4b Use case-specific policy recommendations – ride-hailing Photo credits: BluSmart credits: Photo
4646 PoliciesPolicies forfor India’sIndia’s globalglobal leadershipleadership onon EVEV adoptionadoption 4b Use case-specific policy recommendations – ride-hailing Ride-hailing is evolving as a has been primarily led by India.45 With such high-utilization preferred form of commute companies like Ola and Uber. rates and scope for expansion, in Indian cities. India’s shared Both companies have deployed ride-hailing becomes an ideal vehicle market has undergone over USD $2 billion in the Indian use case for EVs. significant structural changes market and have created an in recent years and the advent inventory of over 0.7 million cabs, Electrification of ride-hailing is of ride-hailing services has catering to 3 million trips per aligned to the government’s been one of the major mobility day.44 vision of clean and shared transitions. The emergence mobility and already enjoys of innovative, app-based ride- However, this growth in the ride- policy and regulatory support. hailing services across vehicle hailing market, primarily powered However, uncertainties prevail segments has extended on- by petrol and diesel in India, also for the growth of e-bike taxis and demand transport options has huge implications for India’s rentals in India across states, for consumers beyond the energy use, carbon emissions and could be addressed through traditional/offline taxi industry. and air quality. Ride-hailing also regulatory interventions. There represents a relatively high are policy opportunities that can The overall size of the Indian taxi percentage of urban vehicles also enhance ride-hailing driver market is approximately USD $10 in most major Indian cities, and incomes, thus driving adoption. billion and is expected to reach their high mileage makes them This section highlights needs USD $60 billion by 2030. While large contributors to problems and measures to legalize e-bike the current COVID-19 pandemic of climate change and air taxis and streamline licensing of may delay achievement of quality in cities. Ride-hailing e-bike rentals across all states turnover targets, medium- to cars, representing 1.2% of the and to use fiscal measures to long-term growth of ride-hailing total car stock in India (as of nudge individual drivers to switch in India is likely. The app-based 2019), contribute 6% of the total to electric. ride-hailing transition in India emissions caused by cars in
Photo credits: SmartE
47 Policies for India’s global leadership on EV adoption R1. Legalize e-bike taxis and streamline licensing of e-bike rentals across states USING 2W LEADERSHIP AND ECONOMIC VIABILITY TO ACCELERATE CLEAN AND SHARED MOBILITY
Evolution of policy and regulations governing bike taxis and Figure 10: Context rentals India is a 2W-dominant market. The uncertain and differing Central Government launches the regulatory approaches at the 1997 Rent-a-Motorcycle Scheme state level have constrained the growth of India’s market for bike taxis and rentals. The high utilization of taxi and rental Central Government allows services plays to the economic motorcycles to be categorized 2004 advantages of EVs and has the under the MV Act potential to create organic and large-scale uptake of e-2Ws.
The year 2018 saw many MoRTH proposes guidelines including recommending to states state departments in Haryana, 2016 Telangana, Gujarat and Uttar to allow 2W taxi permits Pradesh issue bike taxi permits. Close to 14 states have now legalized bike taxis.46 Despite MoRTH recommends to Lok Sabha that such regulatory updates, many states may issue permits for bike taxis 2018 states, such as Madhya Pradesh under the MV Act and Karnataka, have explicitly banned bike taxis, citing safety 47 reasons. The Motor Vehicles (Amendment) Act, 2019, inducts app-based mobility Parallelly, while bike rentals were 2019 made legal through the Rent-a- solution providers Motorcycle Scheme since 1997, a few states have not developed Rentals or adopted guidelines to facilitate such models. App-based fleets Taxis are facing delays in license issuance by states – which may take over nine months, as the process is not streamlined. Additionally, a few states are not issuing licenses, given how they do not have guidelines in place.48
48 Policies for India’s global leadership on EV adoption Despite regulatory hindrances, partners traveled 38,289 km. Rationale numerous promising companies Bounce reported more than 90 The demand-responsiveness have deployed electric bike million km in 2019. Legalization and affordable nature of bike taxis and bike rentals, such as of e-bike taxis and stre\ taxis make them the ideal mode Ola Bike, Bounce and eBikeGo, amlining licensing of e-bike to increase the reach of public corroborating the business rentals through an easier and transit. A 2018 NITI Aayog viability argument for EVs and more efficient regulatory report49 proposed expanding demonstrating the potential landscape would likely spur the definition of shared mobility for this market. In 2019, Ola fund utilization for 2Ws under to include bike sharing and bikes alone recorded 166 the FAME II scheme, which has acknowledged it as a great low- million km and their top bike otherwise been low. cost option for first- and last-mile connectivity.
Photo credits: Bounce
49 Policies for India’s global leadership on EV adoption Recommendation(s)
BIKE TAXIS
The MoRTH should enforce legalization of e-bike taxis across all states in pursuit of implementing the 2019 amendment to the Motor Vehicle (MV) Act 1988: • Electric bike-taxis should be legalized across all states.
• Licensing and permit processes should be eased – application requests must be addressed within one month for drivers.
• The cost of bike taxi licensing is comparable to cars. In some states, it is as high as 25% of 2W cost. This could be re-examined and lowered for electric bike taxis.
State governments through their regional transport offices (RTOs) could issue consistent, supportive policies enabling commercial application of electric bikes used for rental, taxi and pooling options.
City authorities and planners should synthesize e-bike taxi operations at the city planning stage to improve links with public transit: • This can be done by providing designated pick and drop spots at public transit stations; parking and charging spaces for bike taxi services; and digital integration with public transit for ticketing and payment purposes.
BIKE RENTALS
The MoRTH should ensure that all states and union territories have guidelines in place for bike rentals to streamline licensing requests in a time-based manner: • All states and union territories should have guidelines in place for issuing licenses for bike rentals.
• Licenses to bike rental businesses for operations should be issued within a stipulated time of one month from the day of application, without restriction on the number of vehicles.
• Digitization of the whole licensing process could be encouraged at the state and city levels.
50 Policies for India’s global leadership on EV adoption R2. Waive toll fees and airport charges for EV taxis INCENTIVIZING INDIVIDUAL DRIVERS AND FLEETS TO SWITCH TO ELECTRIC TAXIS
Context Presently, only six states, including Karnataka, Maharashtra and Tamil Nadu have waived road tax on EVs. Other states are yet to provide such benefits for EVs. The draft toll policy prepared by the National Highways Authority of India (NHAI) proposes a 50% concession in toll fees for EVs.50
Rationale We estimate that toll fees and airport charges equate to 15% to 20% of a taxi driver’s income, assuming a monthly income of INR 20,000 (i.e., USD $276, excluding fuel costs) and having to spend INR 3,000 to INR 4,000 (USD $40 to $55) on toll fees and airport charges. E-taxi drivers find it increasingly difficult to afford EVs due to their high upfront costs. Waiving toll fees and airport charges reduces their operating cost and awards them for their early adoption. They also encourage ICE taxi drivers to switch to EVs.
Recommendation(s)
Waive government-administered toll fees, airport entry charges and parking charges for EV taxi drivers.
Photo credits: BluSmart
51 Policies for India’s global leadership on EV adoption 4c Use case-specific policy recommendations – deliveries Photo credits: IKEA India credits: Photo
5252 PoliciesPolicies forfor India’sIndia’s globalglobal leadershipleadership onon EVEV adoptionadoption 4c Use case-specific policy recommendations – deliveries
India is ordering more goods 36% and 21% respectively, until Many companies in India are online now than ever before 2030.51 already acting on this transition — and demanding that those and are known to have deployed goods arrive at a lightning pace. In 2020, the World Economic light EV pilots for their delivery This trend has only accelerated Forum (WEF), together with requirements across major because of COVID-19. The past WBCSD and McKinsey & Indian cities. In 2020, Flipkart decade has seen unparalleled Company, developed 24 became the first e-commerce growth in last-mile deliveries, supply chain and technology marketplace in India to commit primarily across new markets interventions that last-mile to transitioning 100% of their such as urban e-commerce, logistics companies should vehicle fleets to electric by 2030, food/grocery deliveries and adopt to solve delivery by joining the EV100 global couriers. Last-mile freight and challenges and lower emissions initiative. They are primarily 52 deliveries have been a key without affecting profit. Among assisted by service providers enabler in the growth of the these, accelerated adoption such as e-Kart, Delhivery, GATI digital retail market. of EVs is one of the prioritized and others to transition their interventions that offers the ICE fleets to more cost- and The growing shipments of highest potential impact towards environmentally-effective EV goods to consumers’ doorsteps abatement of urban emissions variants. have a negative impact on and air pollution. cities – an increasing quantum However, there are challenges of carbon emissions, local The surge in demand, related to EV adoption in this vehicular and noise pollution accompanied by increased use case, such as a lack of EV and traffic congestion. In the vehicle utilization (and rising options for heavier delivery business-as-usual scenario, fuel prices), presents an vehicles; permit concerns the carbon footprint and the economically beneficial related to cross-sector congestion caused by urban opportunity for delivery usage of the same vehicle; logistics globally is expected to companies contemplating a and concerns related to the grow continually and increase by transition to electric mobility. licensing regime of 2Ws vehicles, and these challenges require policy and regulatory interventions. This section highlights recommendations that could catalyze EV adoption in this last-mile urban freight and deliveries use case, such as experimental daytime entry of heavier electric delivery vehicles in cities for a timebound period to drive early adoption; allocation of FAME funds to subsidize certified retrofitting kits for heavier electric delivery vehicles; establishing favorable regulations for cross-industry usage of e-2Ws; and establishing a robust licensing structure to foster e-2W development and sales.
53 Policies for India’s global leadership on EV adoption D1. Experiment with daytime entry of electric SCVs and MCVs into cities for a timebound period USING DAYTIME ENTRY RELAXATION AS A LEVER TO DRIVE EV ADOPTION FOR DELIVERIES
From a fleet operator’s Context perspective, daytime operations Rationale Cities such as Delhi instate bring in operational efficiency. Day-time entry incentives could daytime entry rules for heavier Extending a similar timebound offer the following to concerned vehicle segments, with the relaxation to heavier commercial stakeholders: primary objective of managing EVs for daytime entry into cities Daytime traffic congestion during peak could be used as a key lever • Delivery fleets: entry will reduce the turn- hours. Usually, heavy-duty freight to drive EV adoption among around time for delivery fleets, vehicles are allowed into the city these companies. The local which is a key performance only during off-peak hours (11 governments could consider indicator, encouraging them to pm–6 am). These entry timings experimenting with regulatory switch to electric variants. are subject to change on a day- alterations. to-day basis for reasons such as festivals, construction projects, While the recommendation • Government authorities: Daytime entry rules offer the changing traffic peaks and acknowledges that EVs may not government an instrument more.53 tackle the primary focus of road However, city authorities with greater flexibility than congestion (categorizing form often relax such measures more firmer measures such as factors) and may instead inflate according to their requirement LEZs. and need. For example, Delhi it, entry relaxation experiments exempts commercial vehicles through time-bound pilots in • Auto OEMs and fleet carrying water, oxygen cylinders, key city pockets and along Since not a lot operators: medicines, medical waste and select highways could be of EV options are available fuel (kerosene, diesel, CNG, used to gauge effectiveness in segments governed by petrol and LPG) from taking and plan measures for future daytime entry rules, added permission for day-time entry. implementation. incentives could offer clear demand signals to OEMs to develop such vehicles and to fleet owners to pilot them.
Recommendation(s)
City authorities should consider relaxing city daytime entry restrictions for heavier commercial EVs for a timebound (short-term) period: • The regulatory measure could initially focus on specific segments such as SCVs and MCVs in delivery and logistics fleets.
• Pilots could be hosted in key city pockets and routes.
• The regulatory measure could be short-term (2-4 years)
54 Policies for India’s global leadership on EV adoption D2. Allocate FAME funds to subsidize certified retrofitting kits for electric SCVs and MCVs for a timebound period ADDRESSING THE BARRIER OF MODEL AVAILABILITY AND ACQUISITION COST FOR DELIVERIES
recognized or incentivized under In addition to this, nearly Context FAME. 10% of all 4Ws are vehicles EV retrofitting to convert ICE used for commercial vehicles to EVs has increasingly Rationale purposes, such as taxis and been seen as a short-term cabs. Electrifying 4Ws and solution to the lack of EV options • Electrifying current vehicle 2Ws serving commercial In India, annual 2W in certain vehicle segments. stock: purposes in use cases sales in FY19 were 21 million Presently, for 4Ws and SCVs, such as deliveries and units (~10% of national 2W the E-Trio electric kit is priced ride-hailing already makes stock); and annual 4W sales between INR 0.35-0.50 million good economic sense for in FY19 were 3.3 million units (USD $4,800-$6,900), while 3W drivers, even with newly (~11% of national 4W stock kits range between INR 0.05- fabricated EVs. Retrofitting of 30 million cars). The current 0.10 million (USD $700-$1,400). kits would hence target the FAME scheme is targeting Batteries account for most of other 90% of the market and only new sales in the 2W, 3W, this cost.54 Presently, retrofitting enable conversion of easier and 4W categories, i.e., less ICE vehicles into EVs is one of segments (cabs, taxis) to than or equal to 10%56 of the the more widely used methods electric today. of electrifying commercial fleets. market. However, retrofitting kits are not
Annual new sales vs vehicle stock of 2Ws and 4Ws55 Figure 11:
2Ws 4Ws
21~10% million 3.3~11% million units units
New Sales (FY19) New Sales (FY19)
Total Stock Total Stock
55 Policies for India’s global leadership on EV adoption In an annual new vehicle sale of SCV vehicle segments could • Increasing EV options: delivery use cases, vehicle 500,000 vehicles. Both 3Ws hence offer benefits in four segments such as 2W, 3W and SCVs, however, have few broad ways: and SCV are heavily employed. or no electric options in the Viable electric variants for market. Competing in the • Boosting electrification of such vehicle segments may 3W goods carrier segment current vehicle stock for 2Ws, not be available in the short are only 3–4 EV options from 3Ws and SCVs term. In the 3W (goods carrier) Gayam Motors, Kinetic Green • Boosting the number of EV segment (payloads between 57 and a few other local OEMs. models available for 2Ws and 0.35–0.5 tons), Piaggio, Bajaj 3Ws Auto, Mahindra & Mahindra, • Foster circularity in Extending vehicle Atul Auto and Scooter India vehicles: • Rolling out EV options for are leading players, each life through retrofitting SCVs and MCVs in the short with 2–3 popular models. increases the full life- term Similarly, in the SCVs segment cycle value of vehicles and (payloads between 0.5–2 contributes significantly • Providing an additional tons), many popular vehicle to reducing manufacturing demand for charging options from Mahindra, Tata environmental footprints. infrastructure, fostering Motors and Ashok Leyland the development of the Encouraging uptake of exist. The SCV market sees ecosystem retrofitting kits in the 2W, 3W and
Recommendation(s)
The DHI could facilitate cabinet amendments to the FAME II scheme to include certified retrofitting kits for heavier delivery vehicles (SCVs, MCVs and HCVs). The DHI could allocate funds to subsidize retrofitting kits for SCVs under FAME. It can assume the same INR 10,000 (USD $138) per kWh value for subsidies, which can be granted to retrofitting companies developing the kits. similar to OEMs for newly-fabricated EVs.
The MoF should institute fiscal measures and incentives for certified retrofitting kits for heavier delivery vehicles (SCVs, MCVs and HCVs). These include reducing the GST charged on retrofitting services from 18% to 5%, bringing it on par with GST on new EV sales.
MoRTH should waive registration charges on retrofitted EVs, the same as new EVs, to encourage more consumers to use retrofitting kits.
56 Policies for India’s global leadership on EV adoption D3. Enable permit flexibility for usage of e-2Ws across use cases ESTABLISHING FAVORABLE REGULATORY INFRASTRUCTURE FOR CROSS- INDUSTRY USE
Context Current daily and required daily utilization (in km/day) for Figure 12: e-2Ws to achieve TCO parity with ICE 2Ws This recommendation is applicable to both the ride-hailing Current daily utilization Required daily utilization and the deliveries use cases. Presently, permits are issued to vehicles for a singular purpose. Groceries 50 If the owner of a personal 2W wants to operate it as a bike 100-120 km/day E-commerce delivery 60 TCO parity threshold taxi, then he/she requires a for e-2Ws separate permit for this purpose. Obtaining these permits is Online food delivery 70 often a time-consuming and complicated process.
Rationale Recommendation(s) Owing to the high upfront price disparity between EVs and their Allowing permit flexibility for usage of e-2Ws across use ICE counterparts, users must run cases: their vehicles at high-utilization Allowing cross-industry use of e-2Ws across people and goods rates to benefit from EVs’ low movement would count as preferential treatment to EVs and would operational costs. This may not encourage people to own EVs. This would allow EV owners to earn be the case if commercial 2Ws dual revenue from passenger and deliveries transport using the same are made to run only on one vehicle, simultaneously achieving higher utilization. dedicated platform.
For a variety of reasons, such as the nature of duty-cycle curves and demand–supply restrictions, drivers may not be able to achieve parity thresholds in the use cases. Instead, as private contractors, they could switch between platforms to maintain utilization thresholds (for example, a 2W can deliver e-commerce goods in the afternoon and deliver food in the morning and evening to boost vehicle utilization).
57 Policies for India’s global leadership on EV adoption D4. Consult and revise regulations for e-2W related to motor power ratings and OEM licensing structure ESTABLISHING A ROBUST LICENSING STRUCTURE TO FOSTER E-2W DEVELOPMENT AND SALES
Based on industry consultations, Such a regulation based on Context the regulatory threshold put forth European standards might This recommendation is by the Automotive Research not fully suit Indian conditions, applicable to both the ride- Association of India (ARAI) and especially where all vehicles hailing and the deliveries use other participating regulatory share the main roads and there cases. bodies, of 250W for electric is no separate infrastructure for 2Ws, has been inspired by pedestrians and (e-)bicycles. In the current scenario, norms established in Europe regulations set by the Central and the United States for Per industry experts, today, Motor Vehicles Rules (CMVR), electric bicycles; in particular, 70–80% of the e-2Ws running 1989 lays down that OEMs that the EN 15194:2017 European on roads are circumventing manufacture/assemble e-2Ws standard60 for electric bicycles the ARAI-CMVR by getting with motor ratings below 250W with pedal assistance up to a their vehicles approved as and a speed limit of 25 kmph will maximum of 25 kmph and a non-number plate vehicles to be subject to a homologation maximum continuous motor avoid the high licensing fees cost of INR 0.35-0.45 million output of 250W, which was (INR 5 million, i.e., USD $0.07 (USD $5,000-$6,000),58 while harmonized under the Machinery million). These vehicles are later OEMs that manufacture e-2Ws Directive. It is to be noted, that modified with increased motor with motor ratings above 250W e-bicycles in these countries wattage and speed depending and speed limits above 25 kmph are predominantly confined to on operations (deliveries, ride- must register them with CMVR pedestrian pathways and cycling hailing). and incur a licensing cost of INR 59 routes developed around cities, 5 million (USD $0.07 million) (i.e., and not on roads where bikes, approximately 10 times). cars and buses would ply.
Regulatory landscape for OEMs based on EV motor power ratings and maximum speed Figure 13:
Homologation cost of License fee of INR 0.35- INR 5 million charged to OEMs 0.45 million (USD $5,000-$6,000) (USD $70,000) charged to OEMs manufacturing manufacturing EVs with motors EVs with motors below 250W above 250W rating
Need not be registered as a type Need to be registered as a type with the CMVR; with the CMVR; non-number- number-plated plate vehicle vehicle 0W
Watts <250W 250W >250W
Speed <25kmph 25kmph >25kmph
58 Policies for India’s global leadership on EV adoption Rationale The rationale for this recommendation stems from the legacy regulatory landscape in the Indian EV market. The following events were observed:
Challenge Impact on OEMs and users • Manufacturers developing products with motor ratings higher than 250W bear Number-plated e-2Ws get the INR 5 million (USD $0.07 million) licensing cost. priced higher • Number-plated vehicles are automatically priced higher than their unregistered counterparts, which usually perform at par (given that the specifications of battery size and motor rating are almost comparable).
• Considering the licensing regulations for EVs with motors below and above Local and new manufacturers 250W and 25 kmph, many budding local OEMs elect to circumvent the bypass regulations regulation and register their vehicles in the below-250W–25kmph category to avoid paying high licensing costs. Consequently, they deploy the same vehicles with motors well beyond 250W ratings (up to 2 kW in some cases). This allows them to undercut their more established competitors who are adhering to the regulations and paying hefty licensing fees. • Manufacturers operating in the below 250W–25 kmph category tend to pair Vehicle quality and user safety the same battery (for example a 700–800Wh battery meant to be paired with are compromised a 250–500W motor) with high-rated motors such as 1–2kW. This results in an increased strain on the battery and a subsequent reduction in battery life (within as little as six months). The same manufacturers then fail to provide customers with replacements. This has resulted in vehicle performance and quality concerns for customers.
• As per industry experts, this same phenomenon has also led to incidents where excessive strain on batteries from motors in e-bikes has led to the battery catching fire, seriously putting the rider in danger. This would also have serious implications on the consumer psyche and confidence in EV technology, and thus the future of e-2W adoption in India.
Recommendation(s)
ARAI should consult with the industry and revise the technical regulations related to licensing fees based on motor power ratings in electric 2Ws: The government should explore dialogues and wider consultation with leading members and industry associations such as the Society of Manufacturers of Electric Vehicles (SMEV) on the following suggested measures:
• Revise licensing regime for OEMs based on motor power ratings of EVs manufactured.
• Revise ARAI and CMVR regulation on motor power ratings and speed limits to legitimize manufacturers circumventing the current regulation; a short- to medium-term measure could be moving the 250W threshold to 500W.
• Reduce the licensing cost differential for OEMs manufacturing e-2Ws below or above 250W. Challenges in this system have come to light in a recent High Court case in Karnataka.61
59 Policies for India’s global leadership on EV adoption Evaluation of prioritized recommendations Based on inputs from experts were asked to classify implementation perspective; and companies, WBCSD policy recommendations on a (c) the ease of implementation qualitatively evaluated all the scale of high, medium and low, , of policy recommendation recommendations in the report individually and relatively, on considering the mechanism (except for foundational sector- three metrics. These metrics proposed. The high, medium wide recommendations) to are: (a) and low scales were then possible impact of assess priority. The foundational assigned weights. The policy recommendation recommendations were on investments and market following chart represents the considered independent of creation; (b) consensus-based evaluation of cost of policy the other policy asks and from an recommendations. recommendation were not evaluated. Company
Relative evaluation of recommendations based on ease of implementation (y-axis); impact on EV Figure 14: investment and market creation (x-axis); and cost of implementation ($)
Foundational sector-wide policy recommendations
F2. Vehicle scrapping F3. Fiscal benefits F5. Exemptions, F1. National EV F4. Low-emission linked to EV to leasing discounts and ambition zones adoption industry incentives
Recommendations to accelerate commercial fleet electrification and encourage private investments in charging/ battery swapping infrastructure
High ease
R2 $$
E2 E-taxi toll / $$ parking waivers Subsidy for E1 corporate e-car D1 leasing $ $$$ CI3 Unrestricted urban $$$ Subsidy for Low impact D3 entry for e-freight private e-buses High impact $ Battery swapping – subsidy + charging tariff Enable permit flexibility for e-2Ws for cross- R1 industry use CI4 CI5 $$ $ $$ Legalizing e-bike taxi D4 GST rationalization – (across states) CI1 Liberal open access D2 charging / swapping $$ and net-metering $ $$$ regulations for Support market creation CI2 RE-based charging Revised Subsidy for for private charging/ $$ e-2W regulations retrofitting swapping investments (delivery vehicles) Land allocation for public Low ease charging
CHART LEGEND D Deliveries COST INDICATOR
FAME-related recommendations R Ride-hailing $$$ High cost
Non-FAME fiscal measures E Employee Transport $$ Medium cost
Regulatory provisions CI Charging $ Low cost
60 Policies for India’s global leadership on EV adoption Conclusion: Guiding pathways for policy action on commercial fleet electrification
1. ADOPT AN AMBITIOUS NATIONAL EV TARGET TO TRIGGER DEMAND – STATUS QUO IS NOT AN OPTION A strong ambition for electrification will set a clear direction and create long term visibility, triggering demand so that every participant in the value chain can engage in joined up planning and investment. A national EV ambition, either in the shape of an EV sales target or an ICE phase out target, along with a clear timeline and roadmap for implementation can provide certainty and galvanize action across policy and market.
2. TRANSITION COMMERCIAL FLEETS FIRST Prioritizing the commercial fleet segment will secure the biggest and fastest impact , owing to high vehicle utilization and resulting economic viability. Capturing these low hanging opportunities immediately through policy interventions can both catalyze high impact EV uptake and pave the way forward for scaled manufacturing in the coming years. Learnings from commercial fleets and the value they deliver are transferable to other segments in transition. In the Indian context, prioritized use cases for commercial fleets include employee transport, ride-hailing and urban freight/deliveries.
3. LIBERALIZE FAME SUBSIDY SCHEME Two thirds of the intended FAME II scheme duration have elapsed (as of Apr 2021) While there is more traction on buses and charging, only 4% of the incentives allocated for light vehicles (2Ws and 3Ws) and cars have been utilized7 This highlights the need to adapt the structure and duration of fund allocation. There is merit in: (a) expanding the scope of the FAME subsidy scheme to more fleet segments (private e-buses, corporate e-cars), fueling technologies (battery swapping) and business models (certified retrofitting), where there is significant market traction, and (b) continuation of the scheme beyond Mar 2022.
4. HARMONIZE POLICIES ACROSS GOVERNMENT MINISTRIES AND DEPARTMENTS India’s electrification agenda involves many diverse stakeholders, ministries and interdependent parts in the economy. To realize the full potential of electric mobility transformation, a systems approach within ministries can best address and exploit these diverse perspectives. Future policies in relevant economic sectors (mobility, real estate and energy) should: (a) factor in transversal pathways to propel EVs (e.g. national logistics policy, vehicle scrappage policy, model building by- laws and national RE policy) and (b) be aligned to the vehicle electrification ambition.
61 Policies for India’s global leadership on EV adoption 5. OFFER NON-FINANCIAL INCENTIVES TO EVs – CREATE IMPACT WITHOUT SPENDING FROM PUBLIC EXCHEQUER Complementing central- and state-level fiscal incentives (such as exemptions/discounts on registration, tolls, parking etc.) with enhanced non-fiscal incentives such as instituting LEZs; relaxing daytime entry restrictions for urban freight EVs; legalizing e-bike taxis and streamlining the licensing of e-bike rentals across states; and providing exemptions/discounts can encourage and accelerate adoption without the need for dipping into the public exchequer. All such opportunities should be explored.
6. ESTABLISH MARKET RULES – ENHANCE EASE AND ACCESSIBILITY OF REGULATIONS Instituting clear, unbiased market rules and guidelines for all stakeholders can ease regulatory barriers. For example, socializing grid upgradation cost and setting out responsibilities for the payment of the cost; defining associated maximum timelines; earmarking and supporting acquisition of optimal real estate for charge point operators; and establishing favorable regulations for cross-industry utilization of 2W vehicles.
7. ENABLE ACCESS TO CLEAN ENERGY TO POWER CLEAN MOBILITY India’s ambitious RE targets are appreciated across the world. EV charging demand is currently scattered and disaggregated. Liberal regulations to aggregate demand for charging stations to allow usage of RE through open access or lowering the open access threshold for charging operations would allow India to power its energy transition for mobility using RE.
8. ENSURE A LEVEL PLAYING FIELD WHILE FORMULATING POLICIES Extensive participation from various stakeholders will be required to create impact at scale. Distortions such as preferential treatment to the public sector vis-à-vis the private sector to set up public charging infrastructure and related allocation of land; absence of subsidies for battery swapping technology; and absence of fiscal benefits for EV leasing compared to EV buying should be eliminated.
62 Policies for India’s global leadership on EV adoption Partners for this report
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THE CLIMATE GROUP – PROJECT PARTNER The Climate Group drives climate action. Fast. Our goal is a world of net zero carbon emissions by 2050, with greater prosperity for all. We focus on systems with the highest emissions and where our networks have the greatest opportunity to drive change. We do this by building large and influential networks and holding organisations accountable, turning their commitments into action. We share what we achieve together to show more organisations what they could do. We are an international non- profit organisation, founded in 2004, with offices in London, New Delhi and New York.
EY INDIA – TECHNICAL PARTNER EY is a ‘Big 4’ management consulting firm and a leading advisor to the power & utilities sector, and the upcoming e-mobility sector. EY works with senior management at federal and private sector firms, including 9 out of the top 10 Fortune Global 500 utilities. In India, EY has extensively worked in and shaped the e-mobility sector. As part of marquee engagements, EY India has worked with leading auto-OEMs, power- and transport-utilities, Government entities such as NITI Aayog, MoP, BEE, MNRE, and promising think-tanks, start-up and contemporary charging infrastructure companies, battery manufacturers, and more.
63 Policies for India’s global leadership on EV adoption Endnotes 1 CNN Health. 2019. 22 of the top 30 8 WBCSD. 2019. India Business Manufacturing and supply- most polluted cities in the world are Guide to EV Adoption. Encouraging side initiatives: in India. https://www.wbcsd.org/ibgtea manufacturing under the Make in https://edition.cnn. India campaign and supporting the com/2019/03/04/health/most- 9 WBCSD. 2020. Advancing supply chain stakeholders is an polluted-cities-india-china-intl/ electrification in ride-hailing in India indispensable part of EV transition. index.html – A BluSmart case study. This report does not examine https://www.wbcsd.org/wubkz the various manufacturing- 2 IEA. 2021. India Energy Outlook related incentives and makes 10 The exclusion of certain 2021. no recommendations for their elements is subject to following https://www.iea.org/reports/india- improvement. energy-outlook-2021 considerations: The 11 Vehicle technology: 10th Annual Conference of 3 RMI. 2019. India’s electric mobility industry is witnessing significant Knowledge Forum. 2015. Urban transformation – progress to date advancements in alternate transport policies in India in context and future opportunities. technologies such as fuel cell- to climate change: an international https://rmi.org/insight/indias- based/hydrogen-based heavy perspective. electric-mobility-transformation/ trucks. In view of the nascent https://www.toi.no/getfile. stage of the technology, this report php/1348402-1530775902/ 4 KPMG. 2017. Reimagining public makes no recommendations on Publikasjoner/NIAS_conf_Paper_ transport in India. the technology choices for future iisc_KF_INAE_2015_02.pdf https://assets.kpmg/content/dam/ policies. kpmg/in/pdf/2017/10/Reimagining- 12 IEA. 2021. India Energy Outlook public-transport.pdf 2021. Heavy-duty freight vehicles: There is limited availability of https://www.iea.org/reports/india- 5 Bloomberg New Energy Finance medium- and heavy-duty freight energy-outlook-2021 (BNEF). 2020. Electric vehicle vehicle models globally as well as outlook 2020. 13 in India. This report tackles urban IEA. 2019. Global EV Outlook https://about.bnef.com/electric- deliveries and electrification of 2020. vehicle-outlook/ light/medium-duty freight but does https://www.iea.org/reports/global- ev-outlook-2020 6 DHI. 2019. Scheme for FAME II. not make any recommendations to electrify medium- and heavy- https://fame2.heavyindustry.gov.in/ 14 SIAM . 2017. White paper on duty freight. WBCSD plans to WriteReadData/userfiles/8th%20 electric vehicles. work further on the “India Guide to March%202019%20Gazette%20 https://www.siam.in/uploads/ Electric Freight Adoption”, where Notification%20FAME-II.pdf filemanager/114SIAMWhite this topic will be dealt with in PaperonElectricVehicles.pdf 7 DHI website. Accessed on Apr 8, greater detail.
2021. 15 This is based on WBCSD’s https://fame2.heavyindustry.gov.in/ Public transport and personal webinar on “National EV Ambition”, We acknowledge that transport: organized with leading industry The incentive utilization percentage the utilization levels of public stakeholders, including OEMs, for light electric vehicles (2W transport and the scale of personal CPOs, fleet operators, logistics and 3W) and e-cars is 4% and is transport are prime use cases for companies and corporates. calculated in proportion to the total EV adoption. This is acknowledged vehicles sold as of the mentioned under current Indian policy 16 The Economic Times. 2019. By date, i.e., 2W – 52,386, 3W – 13,778, framework and this paper does 2025 India will have 22 million cars – 1,522. not provide any recommendations obsolete vehicles? Where will they beyond the use cases selected go to die? Of the total allocation for e-buses, above, therefore excluding public https://economictimes.indiatimes. supply orders for 38% were transport buses. com/small-biz/sme-sector/by- achieved. Of the total allocation 2025-india-will-have-22-million- for charging infrastructure, letters obsolete-vehicles-where-will-they- of approval (LoAs) for 66% were go-to-die/articleshow/72137063. issued. The source for these two cms?from=mdr figures is an announcement made by the DHI at the launch of the Go Electric Campaign on Feb 19, 2021.
64 Policies for India’s global leadership on EV adoption 17Ola Mobility Institute. 2019. Beyond 26 Government of Delhi. 2020. Delhi 34 MoRTH. 2020. Sale and Nagpur: the promise of electric EV policy. registration of electric vehicles mobility. https://olawebcdn.com/ https://transport.delhi.gov.in/sites/ without batteries. ola-institute/nagpur-report.pdf default/files/All-PDF/Delhi_Electric_ https://evreporter.com/wp-content/ Vehicles_Policy_2020.pdf uploads/2020/08/Advisory-EV- 18 MoRTH. 2018. Consultation note Battery-Regis.pdf on scrapping of commercial 27 Deloitte Consumer Survey. 2018. vehicles. New market, new entrants, new 35 FICCI. 2019. Position paper on http://jhtransport.gov.in/pdf/Morth_ challenges. the inclusion of battery swapping Scrapping%20of%20Older%20 https://www2.deloitte.com/content/ services in FAME II policy. Vehicle.pdf dam/Deloitte/uk/Documents/ http://ficci.in/Feedback-Consulting manufacturing/deloitte-uk-battery- _FICCI_Position-Paper.doc 19 Car and Driver. 2020. Biden’s electric-vehicles.pdf climate plan includes cash for 36 Clear Tax. 2021. Impact of GST on clunkers to speed electric car 28 DHBVN. 2014. Electricity supply cab services. https://cleartax.in/s/ adoption. code. gst-impact-on-cabs https://www.caranddriver.com/ https://dhbvn.org.in/staticContent/ news/a33313899/biden-climate- saleregulation/salecircular/ 37DERC. 2019. Virtual/group net plan-electric-cars/ circular2014/SC.2014-12.pdf metering for RE guidelines. http://www.derc.gov.in/sites/default/ 20 Frost & Sullivan. 2019. Global fleet 29 DERC. 2017. Classification files/DERC%28Group%20Net%20 vehicle leasing market outlook. of supply under supply code Metering%20and%20Virtual%20 https://ww2.frost.com/frost- regulations. Net%20Metering%20for%20 perspectives/global-fleet-vehicle- https://www.tatapower-ddl. Renewable%20Energy%29%20 leasing-market-outlook-top- com/UploadedDocuments/ Guidelines%2C%202019.pdf prediction-2019/ Schedule%20of%20Charges%20 %20and%20Procedure.pdf 38 Transport & Environment. 2020. 21 IQ Air. 2019. World’s most polluted How clean are electric cars? cities 2019. 30 DHI. 2019. EoI inviting proposals https://www.transportenvironment. https://www.iqair.com/world-most- for availing incentives under org/sites/te/files/downloads/ polluted-cities FAME II For deployment of EV T%26E%E2%80%99s%20EV%20 charging infrastructure within cities. life%20cycle%20analysis%20 22 EU Green Zones. 2020. https://dhi.nic.in/writereaddata/ LCA_0.pdf Environnemental zones in France. UploadFile/EOI%20for%20EV%20 https://www.lez-france.fr/nc/en/ charging%20in%20cities%20 Assumptions: Poland’s 2019 grid french-environmental-zones-zcr/ 12%20july.pdf energy mix – 70% coal, 15% RES; paris-zone-zpa.html Sweden’s 2017 grid energy mix – 31 SIAM. 2020. Auto industry sales 27% coal, natural gas, rest nuclear/ 23 Transport for London (TfL). 2020. performance. RES. It is also assumed that the Low Emission Zone. https://www.siam.in/pressrelease- battery & EV manufacturing has https://tfl.gov.uk/modes/driving/ details.aspx?mpgid=48&pgidtrail= taken place in a country with a low-emission-zone 50&pid=474 similar grid mix for both Poland & 24 Sweden. ICCT. 2014. A global comparison 32 EET Asia. 2018. Gogoro to enter of fiscal incentive policy for electric southeast Asian market. 39 India Innovation Lab for Climate vehicles. https://www.eetasia.com/ Finance. 2018. Battery subscription https://theicct.org/sites/default/ 18081506-gogoro-to-enter- facility. files/publications/ICCT_EV-fiscal- south-east-asian-market/ https://www.climatefinancelab.org/ incentives_20140506.pdf wp-content/uploads/2018/02/ 33 EMobility plus. 2020. MoP issues 25 Battery-Subscription-Facility_ Automotive News. 2020. Beijing revised guidelines and standards Instrument-Analysis.pdf extends subsidies, tax exemption for EV charging infrastructure. for EVs; cuts VAT on used vehicles. https://emobilityplus.com/ https://www.autonews.com/china/ 2020/06/10/mop-issues-revised- beijing-extends-subsidies-tax- guidelines-and-standards-for-ev- exemption-evs-cuts-vat-used- charging-infrastructure/ vehicles
65 Policies for India’s global leadership on EV adoption 40 PV Magazine. 2019. Shuttl will 47 Ikigai Law. 2019. What is holding 55 Statista. 2020. Market share of add 300 e-buses by 2020, BRPL back bike taxi services in India? automotive industry across India in fleet to go all-electric by 2030. https://www.ikigailaw.com/what-is- FY 2019, by segment. https://www.pv-magazine-india. holding-back-bike-taxi-services-in- https://www.statista.com/ com/2019/04/17/shuttl-will-add- india/#acceptLicense statistics/1066695/india- 300-e-buses-by-2020-brpl-fleet- automotive-industry-market-share- to-go-all-electric-by-2030/ 48 WBCSD’s consultations with by-segment/ industry experts. 41 Autocar Professional. 2019. 56 WBCSD’s consultations with the Lithium Urban Tech introduces 49 Niti Aayog. 2018. Moving forward industry. e-bus in its New Delhi fleet. together – enabling shared mobility https://www.autocarpro.in/news- in India. 57 EV Reporter. 2020. Top electric national/lithium-urban- https://niti.gov.in/writereaddata/ 3W cargo vehicles in L5 category. files/document_publication/ https://evreporter.com/top-electric- 42 Asian Development Bank. Shared-mobility.pdf 3w-cargo-vehicles-l5/ 2003. Vehicle Emissions Policy Guidelines. 50 Economic Times. 2019. Lower tolls 58 EVreporter. 2020. Guide to https://www.adb.org/publications/ for EVs on the cards to push green homologation of electric 2W and series/vehicle-emissions-policy- mobility. 3W in India. guidelines https://economictimes.indiatimes. https://evreporter.com/guide-to- com/news/economy/policy/ homologation-of-electric-vehicles/ 43 Business Standard. 2019. India’s lower-toll-for-evs-on-the- new mobility market expected cards-to-push-green-mobility/ 59 ARAI. 2021. ARAI FAQs - CMVR to touch $90 bn by 2030: Data. articleshow/71510925. rules for 2Ws with motor ratings https://www.business-standard. cms?from=mdr above 250W and top speed above com/article/companies/india-s- 25 kmph. https://www.araiindia. new-mobility-market-expected- 51 WEF. 2020. The Future of the Last- com/faqs to-touch-90-bn-by-2030- Mile Ecosystem. 60 Light Electric Vehicle Association data-119101500156_1.html http://www3.weforum.org/docs/ WEF_Future_of_the_last_mile_ (LEVA). 2017. EN 15194:2017 44 Entrackr. 2020. Operations of Ola ecosystem.pdf harmonized under Machinery & Uber in India. Numbers tell the Directive. story of Ola vs Uber rivalry in India. 52 WEF. 2020. Online shopping is https://leva-eu.com/en- https://entrackr.com/2020/02/uber- polluting the planet – but it’s not 151942017-harmonized-under- ola-market-share-rivalry-in-india/ too late. machinery-directive-what-does-it- https://www.weforum.org/ mean/ 45 WBCSD. 2020. Advancing agenda/2020/01/carbon- electrification of ride-hailing in India emissions-online-shopping- 61 The Hindu. 2020. HC issues – a BluSmart case study. solutions/ notice on plea against non- https://www.wbcsd.org/wubkz registration of some e-scooters. 53 Delhi Police. 2019. Standing order https://www.thehindu.com/news/ 46 Economic Times. 2018. Taxi on entry timings. national/karnataka/hc-issues- permits to two-wheelers by states http://delhipolice.nic.in/ notice-on-plea-against-non- legal: Govt. standing%20order/368.pdf registration-of-some-e-scooters/ https://economictimes.indiatimes. article32047639.ece com/small-biz/startups/ 54 Inc42. 2019. Cost breakup of newsbuzz/taxi-permits-to- retrofitting kits and contribution of two-wheelers-by-states-legal- battery component. govt/articleshow/67076261. cms?from=mdr
66 Policies for India’s global leadership on EV adoption Associated business-focused initiatives in India
EV100 EV100 is a global initiative led by The Climate Group bringing together forward-looking companies committed to accelerating the transition to EVs and making electric transport the new normal by 2030. The Climate Group harnesses the collective purchasing power of EV100 members to build demand for EVs and send a clear signal to the market. Electric transport offers a major solution in cutting millions of tons of greenhouse gas emissions per year, as well as curbing transport-related air and noise pollution.
Urban Mobility Lab Initiative Rocky Mountain Institute India accelerates India’s transition to a clean, accessible, and prosperous energy future. It engages government, industry, and civil-society leaders to design innovative policy frameworks and market solutions to support India’s clean energy and mobility transformations. At the national level, RMI collaborates with NITI Aayog and Ministries to help establish a vision for the future of EVs and energy storage in India. At the subnational level, RMI India collaborates with state governments, urban local bodies, and the private sector through its Urban Mobility Lab initiative to deploy pilot projects that realize environmental impacts and build confidence towards further action.
Electric Mobility Initiative (EMI) Electric Mobility Initiative (EMI) is a multi-funder platform mobilizing philanthropic efforts supporting the accelerated adoption of electric mobility in India. The initiative brings together like-minded organizations under a common strategy to drive forward electric mobility policy design and implementation. EMI collaborates with stakeholders across the spectrum including government, regulators and industry, through our grantees and partners who share our vision for a clean and secure energy future for India. EMI is hosted by Shakti Sustainable Energy Foundation.
CEEW – Centre for Energy Finance The Council on Energy, Environment and Water (CEEW) is one of Asia’s leading not-for-profit policy research institutions. The Council uses data, integrated analysis, and strategic outreach to explain — and change — the use, reuse, and misuse of resources. The Council addresses pressing global challenges through an integrated and internationally focused approach. CEEW’s Centre for Energy Finance is actively working on electric mobility, and has two key projects underway – EV charging interoperability (in partnership with eDRV) and an Electric Mobility dashboard. These projects aim to support the mobility transition by increasing transparency and building consensus among different stakeholders.
67 Policies for India’s global leadership on EV adoption List of abbreviations two-wheeler liquefied petroleum gas 2W LPG three-wheeler Low-emission zone 3W LEZ four-wheeler low tension 4W LT average commercial tariff medium commercial vehicle ACT MCV average electric vehicle tariff Ministry of New and Renewable Energy AET MNRE average residential tariff Ministry of Environment, Forest, and Climate Change ART MoEFCC Automotive Research Association of India Ministry of Finance ARAI MoF battery electric vehicle Ministry of Heavy Industries and Public Enterprises BEV MoHIPE business process outsourcing Ministry of Power BPO MoP battery swapping operator Ministry of Road Transport and Highways BSO MoRTH Clean Air Act Motor Vehicle Act CAA MV Act compounded annual growth rate nationally determined contribution CAGR NDC Clean Energy Ministerial National Capital Region CEM NCR Central Electricity Regulatory Commission new energy vehicle CERC NEV Central Motor Vehicle Rules National Highways Authority of India CMVR NHAI compressed natural gas National Thermal Power Corporation CNG NTPC carbon dioxide original equipment manufacturer CO2 OEM Conference of the Parties plug-in hybrid electric vehicle COP PHEV charging point operator production-linked incentives CPO PLI coronavirus disease public sector undertaking COVID-19 PSU Delhi Electricity Regulatory Commission renewable energy DERC RE Department of Heavy Industry Renewable Energy India Expo DHI REI Expo power distribution company Rocky Mountain Institute DISCOM RMI Energy Efficiency Services Limited renewable purchase obligation EESL RPO ease of doing business Regional Transport Office EoDB RTO expression of interest small commercial vehicle (also referred to as light EoI SCV commercial vehicles) end of life Solar Energy Corporation of India EoL SECI employee transportation services State Electricity Regulatory Commission ETS SERC European Union Society of Indian Automobile Manufacturers EU SIAM electric vehicle Service Level Agreement EV SLA electric vehicle supply equipment Society of Manufacturers of Electric Vehicles EVSE SMEV Faster Adoption and Manufacturing of (Hybrid &) state transport undertaking FAME India STU Electric Vehicles in India Federation of Indian Chambers of Commerce & social welfare surcharge FICCI SWS Industry Forum of Regulators sports utility vehicle FoR SUV gross cost contract total cost of ownership GCC TCO greenhouse gas urban local body GHG ULB Government of India United Nations Framework Convention on Climate GoI UNFCCC Change Goods and Services Tax United States dollar GST USD heavy commercial vehicle universal service obligation HCV USO high tension Value-added Tax HT VAT internal combustion engine World Business Council for Sustainable Development ICE WBCSD Integrated Power Development Scheme zero-emission vehicle IPDS ZEV letter of agreement LoA
68 Policies for India’s global leadership on EV adoption and the Hewlett Foundation. This : Kanv Garg, Shrey Singhal, EY ACKNOWLEDGEMENTS report has been co-authored by Harsh Jain, Vikramaditya Singh WBCSD’s REmobility project multiple stakeholders. in India has brought together Knowledge Contributors companies across the EV value Authors Atul The Climate Group: chain to collaboratively develop : Jasmeet Khurana, Mudaliar, Falgun Patel WBCSD this report. This work has been Appurva Appan funded by We Mean Business
We thank the following people for their contributions and thought leadership:
COMPANY NAME COMPANY NAME Vaibhav Deshwal Suvranil Majumdar ABB International Finance Corporation Vittalkumar A Dhage Manoj Gupta Accenture JBM Shyamasis Das Shalini Baveja Alliance for an Energy LeasePlan India Efficient Economy Chandana Sasidharan Sanjay Krishnan Alliance for an Energy Lithium Efficient Economy Anirudh Arun Nitish Arora BluSmart Lithium Tushar Garg Maxson Lewis BluSmart Magenta Karthik Gogula Aditya Ramji Bounce Mahindra Pradeep Karuturi Hitesh Kataria Bounce Mahindra Devanshu Sharma Vikash Mishra BYPL MoEVing Mukesh Dadhich Manuj Khurana BYPL New Mobility Nakul Kukar Mazhar Hossain Cell Propulsion Ola Electric + Kartikey Hariyani Aishwarya Raman Charge Zone Ola Mobility Institute + Ravindra Mohan Shilpi Samantray Charge Zone Ola Mobility Institute Dolan Sekar Mandar Patil eBikeGO Rocky Mountain Institute Nishant Saini Chetna Nagpal eee-taxi Shakti Sustainable Energy Foundation Manas Trivedi Shashank Sanket Exicom Shell Krishna Sharma Diwyesh Rawal Exicom Shell Dharashree Panda Goldie Srivastava Flipkart SmartE Awadhesh Jha Yuvraj Sarda Fortum SUN Mobility Dhivik Ashok Pramod Sharma Go GreenBOV SUN Mobility Govind Raj Kaushik Metpally Manasvi Sharma IKEA India Tata Power Gopika Pawar Taruna Saxena IKEA India Tata Steel Debi Prasad Dash Abinaswar Das India Energy Storage Uber Alliance Mamta Pant Abichandani Neha Kapoor Infineon Technologies Uber
6969 PoliciesPolicies forfor India’sIndia’s globalglobal leadershipleadership onon EVEV adoptionadoption Photos from the EV policy roundtable discussions at WBCSD India Day 2019 and REI Expo 2019
To contact WBCSD about this DISCLAIMER ABOUT WBCSD’S report: This report has been developed TRANSFORMING URBAN in the name of WBCSD. Like MOBILITY PROJECT Jasmeet Khurana Manager, Mobility other WBCSD publications, it is Transforming Urban Mobility [email protected] the result of a collaborative effort brings together leading by members of the secretariat companies across the and senior executives from extended mobility value chain to Appurva Appan member companies. A wide Associate, Mobility spearhead the mobility system range of members reviewed transformation. We have three [email protected] drafts, thereby ensuring that the projects across three intersecting document broadly represents areas: decarbonization, the perspective of the WBCSD digitalization and behavior membership. Input and feedback change. Through these projects, from stakeholders listed above we develop tools, guidance was incorporated in a balanced and policy recommendations way. This does not mean, to support the transport sector however, that every member on its path to achieving global company or stakeholder agrees climate targets and Sustainable with every word. Development Goals. We design and advocate for solutions that help companies advance their own sustainability transition and play a leading role in delivering sustainable urban mobility in cities around the world.
7070 PoliciesPolicies forfor India’sIndia’s globalglobal leadershipleadership onon EVEV adoptionadoption We are working with companies ABOUT WBCSD’S and experts from various parts ABOUT WBCSD REMOBILITY COALITION of the national EV value chain, WBCSD is a global, CEO-led Our REmobility project brings including original equipment organization of over 200 leading together businesses representing manufacturers, charging businesses working together over 10 billion kilometers of infrastructure providers, battery to accelerate the transition to mobility in India, of which 250 manufacturers, utilities, renewable a sustainable world. We help million annual vehicle kilometers project developers, information make our member companies have been electrified. and communications technology more successful and sustainable (ICT) providers and corporate by focusing on the maximum The objective of REmobility in end customers. As of May 2021, positive impact for shareholders, India is to support the business over 100 experts and decision- the environment and societies. adoption of electric vehicles, makers from different parts of the Our member companies come energy storage and renewable EV value chain, including some from all business sectors and all energy. The project will meet institutional partners and end major economies, representing a these objectives by identifying customers, have agreed to share combined revenue of more than market barriers, sharing time and expertise to help meet USD $8.5 trillion and 19 million knowledge and collaborations, our common objectives. reviewing regulatory and policy employees. Our global network frameworks, creating innovative of almost 70 national business business models and setting up councils gives our members scalable demonstration projects. unparalleled reach across the globe. Since 1995, WBCSD has been uniquely positioned to work with member companies As part of our efforts to accelerate vehicle fleet along and across value chains electrification in India under the REmobility coalition, to deliver impactful business a series of reports have been produced by WBCSD’s solutions to the most challenging REmobility coalition sustainability issues.
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