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Ministers to brainstorm policy for an all-electric vehicle future

LiveMint logoLiveMint 06-03-2017 Amrit Raj

New Delhi: India’s dream of an all-electric vehicle fleet by 2030 will receive a fillip this week, with finance minister Arun Jaitley expected to chair a meeting that will be attended by other key ministers, to help formulate an electric vehicle (EV) policy, according to four people in the know.

Road transport and highways minister Nitin Gadkari, heavy industries minister Anant Geete, environment minister Anil Dave and minister for power, coal, new and renewable energy and mines Piyush Goyal are expected to attend the meeting, said two of the people, both government officials, who asked not to be identified. The effort is being driven by the Prime Minister’s Office, the two officials added. Spokespersons for the five ministries did not respond to request by Mint for comment.

Mint learns that the initiative, which envisages all passenger and commercial vehicles in India being powered by electricity by 2030, may, in the first stage, see the creation of standards and specifications.

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“There is a unanimity for India going ahead with the EV programme. India has significant advantages in terms of number of vehicles to be bought and high-density areas,” one of the two officials cited earlier said.

According to the government’s Automotive Mission Plan 2016-26, India’s passenger vehicles market is expected to more than quadruple to 13.4 million units by 2026 from 3.2 million now if the economy grows at an average rate of 7.5% a year, making it the world’s second largest market after China.

The commercial vehicle industry is expected to grow to 3.9 million units from 700,000 at the end of 2014-15.

Any shift to EVs will help reduce pollutants and fuel imports. This assumes significance given India’s energy import bill of around $150 billion, which is expected to reach $300 billion by 2030. India imports around 80% of its oil and 18% of its natural gas requirements. India imported 202 million tonnes of oil in 2015-16.

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Currently, electric vehicle sales are low in India and rose 37.5% to 22,000 units in the year ended 31 March 2016 from 16,000 in 2014-15; only 2,000 of these were cars and other four-wheelers, according to automobile lobby group Society of Indian Automobile Manufacturers.

The government wants to see 6 million electric and hybrid vehicles on the roads by 2020 under the National Electric Mobility Mission Plan (NEMMP) 2020 and Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME). It has been offering subsidies on electric and hybrid vehicles of up to Rs29,000 for bikes and Rs1.38 lakh for cars under FAME, but the plan is to make the scheme economically viable on its own.

“The scheme will be subsidy-free. Till the time prices comes down, as was seen in the case of LED bulbs, some support is required. The operating cost of EVs today is equal to the cost of a petrol-fuelled vehicle. However, the capital expenditure is higher which, over a period of time, will come down, given India’s demand. We have to design a programme that helps bridge that gap,” said the official cited above.

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A consortium comprising Maruti Suzuki India Ltd, Mahindra & Mahindra Ltd, Ford India Pvt. Ltd, Mahindra Reva Electric Vehicles Pvt. Ltd and Tata Motors Ltd was formed last June to help develop a supplier base for critical hybrid and electric vehicle components; Ford India and Maruti Suzuki have since pulled out of it.

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