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In what has been billed as good news for the industry, the latest Union Budget announced by the Finance Minister saw a host of tax and regulatory incentives designed to spur electric vehicle use. The Budget included tax rebates of up to ₹1.5 lakh on interest paid on loans to buy electric vehicles (a total exemption benefit of ₹2.5 lakh over the entire loan period). There is three keys to spurring mass adoption of electric vehicles in India
The Minister also announced customs duty exemptions on lithium–ion cells and investment-linked tax exemptions on components used in electric vehicles and charging stations that are not made locally.
This is certainly a step in the right direction. The Budget makes it cheaper to purchase electric vehicles which should give confidence to investors. It also encourages the local manufacture of many of the components needed, thereby hopefully reducing reliance on foreign imports in the long run.
In order to really spur the use of electric vehicles among the consumer, we should focus our efforts on three main areas (for mass adoption of electric vehicles), each of which are interlinked:
Most automotive sales today in many countries are supported by bank financing. Very few people can afford to purchase a vehicle outright and so would go to a bank to get a loan for their vehicle purchase. Banks therefore need to be able to offer a competitive rate for consumers otherwise they simply won’t be able to afford the purchase.
The tax rebates are a step towards addressing the financing element. When consumers are able to place a lower down payment and more competitive monthly installments than traditional fossil fuel-powered vehicles then we will start to see more purchases.
However, even with the best financing in the world if electric vehicle users cannot charge their vehicles then they still won’t buy. Charging infrastructure is incredibly disruptive and expensive to develop especially in India’s large, congested metropolises. Space is scarce, the streets are narrow and the laying down of wires and cabling to supply the necessary electricity is very costly.
Linked to infrastructure is technology. Currently it takes hours to charge the lithium-ion batteries that make up most of the batteries in current electric vehicles. This is both inconvenient and challenging – there is precious little space to hold thousands of idling vehicles while they sit there charging. We need to look to alternative technologies such as ultra-capacitor batteries which not only charge in minutes but last 20x longer than today’s lithium-ion batteries. Ultra-capacitor batteries with comparable energy density as lithium-ion batteries are best suitable for EVs plying the streets of congested cities.
One way to develop the necessary infrastructure but at much lower cost is through India’s SMEs. Rather than taking a ‘top down’ approach whereby the government builds and installs the electric charging network, we should incentivise and empower companies and entrepreneurs to build, own and benefit from their own charging stations.
A good place to start is with Rickshaws. There are currently around 1.5 million battery-powered, three-wheeled rickshaws on the streets of India today and this is growing by approx. 11,000 new vehicles a month. By using variants containing ultracapacitor batteries that charge in minutes we can further increase this number. We should turn the users and fleet owners into real stakeholders by allowing them to invest in and own charging stations – be they on-grid (as in connected to the power grid) or off-grid (such as solar powered mobile charging stations that can be placed anywhere). With the ability to sell power to other fleets and electric vehicles, and therefore make a profit, we will quickly see the creation of an integrated charging network spring up.
By engaging SMEs and ‘leaning’ on them to develop a city- or country-wide charging infrastructure, combined with financing that makes electric vehicles more affordable, we will be able to spur the widespread adoption of electric vehicles in India and, perhaps, even the world.
Dr. Saurabh Markandeya, Co-CEO of the SHADO Group, an India- and Singapore-based company that provides Electric Vehicle technology and charging infrastructure.
The post Three keys to spurring mass adoption of electric vehicles in India appeared first on Urban Transport News.
This article first appeared on urbantransportnews.com
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