Budget boost for Electric Vehicles will give India a first mover advantage: NITI Aayog’s Rajiv Kumarhttps://indianexpress.com/article/business/budget/budget-boost-for-electric-vehicles-will-give-india-a-first-mover-advantage-niti-aayogs-rajiv-kumar-5829232/

Budget boost for Electric Vehicles will give India a first mover advantage: NITI Aayog’s Rajiv Kumar

"In most other industries, we have been followers. But in this case, we can take the lead and crack the world markets by expanding exports of electric vehicles. Electric mobility is a sector which will drive economic activity in [the] coming years."

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Niti Aayog Vice-Chairman Rajiv Kumar. (Express file photo)

The Union Budget 2019-20 has announced some steps to boost purchase of electric vehicles, but a full policy framework on electric mobility will be unveiled after the Cabinet approval. In his interview with The Indian Express, NITI Aayog Vice Chairman Rajiv Kumar says that India can become a leader in manufacturing and exports of electric vehicles, which is the next big wave in the global economy.

The Budget has announced certain measures to push electric mobility. Are they enough?

I think it’s a very good start. It’s a very clear signal that the entire government is behind it and that’s a very important message to convey, that it is not just one wing of a department [that] is trying to push it but the whole government sees it as the next big wave.

The reasons for that are very clear to us: electric vehicles are the next big revolution. Zero emissions and connected mobility will transform the entire manner in which we do things in the economy. The government’s objective is to use electric mobility to create mass manufacturing in India which is globally competitive at every level, including the manufacturing of batteries and cells, and research & development in these areas such as the hydrogen cells. In most other industries, we have been followers. But in this case, we can take the lead and crack the world markets by expanding exports of electric vehicles. Electric mobility is a sector which will drive economic activity in [the] coming years.

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What about the impact on traditional (internal combustion engine-based) automobile sector?

We are well aware that the auto sector contributes very largely to the GDP, generates large employment and is also investing in the transition towards BS-VI. That’s why we are not doing it in a hurry. Even the announcement from NITI Aayog was that (electric mobility for two- and three-wheelers) will be attempted by 2025, which is a good six years away, in which time the investments that companies have made in existing technologies, can be fully depreciated and fully utilised.

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Government has been the biggest beneficiary through taxes on petrol and diesel. Will the electric mobility push not affect the Centre’s revenues from fuels?

By announcing measures in the Budget, the government has shown clearly that they don’t mind this. The revenues are not going away tomorrow, they will continue. The government’s own declared intention is that we want to reduce our dependence upon energy imports, to reduce pollution and to meet climate change targets. So our dependence upon fuel taxes will go down as GST expands and other tax revenues rise. On the other hand, high taxes on fuels will promote electric mobility. Clearly, [the] government’s dependence on these fuel tax revenues cannot be allowed to hold the other policy objectives of the government.

How can the challenges of charging infrastructure at a mass scale be overcome?

I am convinced that the private entrepreneurs in this country will find a solution for that. I have no doubt. I can also see that people who build houses, once electric mobility is promoted, they will make provision for charging infrastructure in new projects. Another point is that if one focuses on battery swapping technology, then you don’t need any of that, especially in two-wheelers where the battery size is so small and so convenient, always shrinking.

For example, in IIT Madras, all the three-wheelers inside the campus are now Lithium-ion battery operated. What they do is that there is a centralised place where the batteries are charged and batteries are swapped. Such swapping stations can emerge all over the urban locales and we may not need the kind of charging infrastructure that we are imagining. Similar is true for public buses, for which the average daily commute in a city like Delhi is not more than 50 km and every battery lasts you more than 100 km even in the present technology. Every time the bus goes into the station, it can be charged once. So the challenge that whole of city will be dug out for charging stations is entirely misplaced. And finally, for long distance travel, the government has already declared that every gas station along the highway will have [the] charging infrastructure.

What, then, is the challenge?

The issue is whether the grid system can take this extra load. But because this (complete rollout) is 6-10 years away and now we know the challenge, we can start working on it, we can improve the quality of the grid. But all that thinking can start if you have a target date in mind.