Electric and Hybrid Cars – FAME, National Electric Mobility Mission, etc.

[op-ed snap] Electric vehicles don’t need a government push

Note4students

Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

From UPSC perspective, the following things are important:

Prelims level: Read the attached story

Mains level: The newscard discusses some issues related to the (possible) early adoption of the EVs in India.


News

Context

  1. EVs are the future, but the investments are still risky and rushing the change could leave us with an overpriced fleet of early-generation vehicles

Government is considering some exemptions

  1. Government has recently announced that the government is considering
    (1) exemption from permits, concessional toll,
    (2) a rate of depreciation of 50% as against the prevailing 15% for conventional vehicles,
    (3) lowering of the goods and services tax on batteries and
    (4) a rule mandating taxi aggregators to have a certain percentage of EVs in their fleet
  2. Government has spoken about making the public transport system fully electric through the second phase of Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India (FAME India) scheme
  3. It’s possible that some of these plans will not materialize

Important issue related to the EVs: Pricing

  1. EVs are superior to internal combustion engines, but also expensive
  2. Therefore, incentives to purchase EVs, as well as procurement of EVs for public transport, could be fiscally expensive, and we might end up with an overpriced fleet of early-generation vehicles
  3. Suggestion: Just like early smartphones, a better idea would be to wait until the rich nations buy sufficient volumes of the products on offer, and bring prices down

An all-electric fleet of buses is an expensive solution to the problem: A World Bank study

  1. A World Bank study on the cost effectiveness of electric and hybrid buses in developing countries concluded that
  2. in order to tackle air pollution, the policy goal should be to incentivise more people to leave their cars at home

Government should be cautious

  1. The government should avoid regulating the supply of infrastructure with arbitrary prescriptions and subsidies
  2. While everyone agrees that charging infrastructure is essential to the success of EVs, whether there should be a charging station at every five kilometres or 10 cannot be known in advance
  3. Factors such as the driving range of vehicles, private charging capabilities of users and charging speed will determine the number and location of charging stations
  4. Similarly, shifts in technology(such as wireless charging, solid state batteries or a transition to hydrogen fuel cells) will have to be anticipated as these might render existing infrastructure obsolete

The way forward

  1. The government needs to focus on the less appealing, but more effective solutions
  2. Choosing new technologies is the task of venture capitalists and entrepreneurs, not the government
Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments