India can save Rs 17,000 crore if electric vehicles hit the road by 2030: NITI Aayog and RMI
Thinktank NITI Aayog and the Rocky Mountain Institute (RMI) have launched a report on the opportunities for the automobile sector and the government under the Faster Adoption and Manufacturing of Electric Vehicles II (FAME II) scheme.
Titled ‘India’s Electric Mobility Transformation: Progress to Date and Future Opportunities’, the report details the oil and carbon savings vehicles under FAME II could deliver.
The report analysed the effect that FAME II and other measures could have on India's overall Electric Vehicle (EV) market. It said if FAME II and other measures – in public and private space - are successful, India could realise EV sales penetration of 30 percent of private cars, 70 percent of commercial cars, 40 percent of buses and 80 percent of two- and three-wheelers by 2030.
Also, oil and carbon savings from these electric vehicles deployed through 2030 could be many-fold larger than the direct savings from FAME II.
Pratik Gupta, Co-founder of Strom Motors, said,
“Electric vehicle costs are falling and consumers should look at EVs as their preferred choice of urban mobility."
In fact, achieving these levels of market share by 2030 could generate cumulative savings of 846 million tonnes of carbon dioxide over the total deployed vehicles’ lifetime.
The FAME II scheme, notified by the Union Cabinet in February 2019, wants to accelerate the Indian government’s commitment to a clean mobility future, with electrification of transportation as a primary focus area. This involves readying the market for faster adoption of EVs for durable economic growth and global competitiveness for India’s automotive industry.
Key highlights from the report:
- Effects of FAME II will go beyond vehicles eligible under it.
- There are considerable energy and CO2 savings associated with two, three, and four-wheeler vehicles and buses covered by FAME II over their lifetime, along with potential savings associated with greater adoption levels by 2030.
- Electric buses covered under FAME II will account for 3.8 billion vehicle kilometres travelled (e-vkt) over their lifetime.
- To capture the potential opportunity in 2030, batteries must remain a key focal point as they will continue to be the key cost driver of EVs.
- Vehicles eligible under FAME II scheme can cumulatively save 5.4 million tonnes of oil equivalent over their lifetime worth Rs 17.2 thousand crore.
EVs sold through 2030 could cumulatively save 474 million tonnes of oil equivalent worth Rs 15 lakh crore and generate net carbon dioxide savings of 846 million tonnes over their operational lifetime.
- India needs its auto industry's active participation to ease electric mobility transition.
- The auto and battery industries could collaborate to enhance customer awareness, promote domestic manufacturing, promote new business models, conduct R&D for EVs and components, and consider new business models to promote EVs.
- The government should focus on a phased manufacturing plan to promote EVs, and provide fiscal and non-fiscal incentives for phased manufacturing of EVs and batteries.
- Different government departments can consider a bouquet of potential policies, such as congestion pricing, ZEV credits, low emission/exclusion zones, parking policies, etc. to drive adoption of EVs.
India’s EV market is poised for growth with a blend of policies, such as FAME II, and the automotive industry’s willingness to provide new mobility solutions to the citizens of the country. Such a transformation will create enormous economic, social and environmental benefits for the citizens of India.
Maxson Lewis, Co-founder of Magenta Power, said,
“Startups in the EV industry are awaiting subsidies not only on the vehicle side but also on the infrastructure side. The government should immediately address this situation and help companies entering the EV infra space. Currently, there is no subsidy for electric charging infrastructure."