Our unique EV transition is a leadership opportunity

Source: The post is based on the article “Our unique EV transition is a leadership opportunity” published in the Live Mint on 9th February 2023.

Syllabus: GS 3 – Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

Relevance: About electric 2Ws and 3Ws transition.

News: The 2023-24 budget gave the EV industry a boost by announcing the removal of customs duties on capital goods used for manufacturing lithium cells used in Electric vehicles.

A greater focus on passenger three-wheelers and commercial two-wheelers can accelerate India’s green push by improving livelihoods while reducing environmental and transport costs.

What are the challenges faced by EVs?

Electric two-wheelers and three-wheelers (including e-rickshaws) accounted for 92% of EVs registered in the country in 2022. Despite clear economic gains and the availability of EV models, e-2Wheelers(e-2Ws) and e-3Wheelers(e-3Ws) are still not being adopted at the desired pace.

Only 4.5% of three-wheelers registered last year were electric. Similarly, e-2Ws made up just 3.9% of total two-wheelers sales last year.

What are the advantages of the adoption of electric 2Ws and 3Ws?

Analysis by the Council on Energy, Environment and Water (CEEW) shows the total cost of owning an electric three-wheeler (e-3W) is 13-46% lower than that of owning similar vehicles using petrol, diesel and compressed natural gas. When drivers switch to electric, a 30% increase in daily savings is enough to pay back an e-3W loan.

What are the challenges faced in the adoption of electric 2Ws and 3Ws transition?

The slow uptake can be attributed to low awareness, lack of trust in EV performance, high finance cost, poor visibility and poor access to charging infrastructure.

What should be done to promote the electric 2Ws and 3Ws transition?

Setting up EV credit guarantee trust funds to de-risk financiers: Most 2W delivery riders and 3W drivers rely on high-interest loans from informal markets. MSMEs, which face a similar challenge, have benefited from credit guarantee funds. Hence, it should be extended to commercial EV segment as well.

Make chargers easily accessible: Auto-rickshaws spend their operational and non-operational idle times at specific parking locations with high footfall. Similarly, 2W delivery riders spend their idle time near pick-up hubs and restaurants. Hence, the charging infrastructure should be strategically developed for them.

Incentivize battery swapping ecosystems: Time loss is crucial for commercial EVs. So, India should promote interoperability among heterogeneous fleets within the same battery-swapping ecosystems.

Allocate higher funds to improve awareness: Swachh Bharat Mission-like awareness is required to improve awareness of FAME scheme.

India should double its electric 2Ws and 3Ws transition to maximize its benefits for the environment, people’s livelihoods and the Indian economy. With this, India has an opportunity to lead the efforts of other Asian emerging economies to chart their inclusive energy-transition strategies.