Why switching to electric vehicles is fiscally imprudent

Source: Indian Express 

Relevance: Electric vehicles are necessary for pollution control and import substitution.   

Synopsis: The government is promoting Electric vehicles in India at a good pace. However, there are issues attached to government policies towards EVs.   

Introduction 

E-vehicles or EVs are becoming increasingly popular in India. It is evident in the increasing sales of TATA Nexons EVs.  

The most important reason behind their popularity is their low running cost, which is a sixth of the diesel variant.  

However, there are many issues attached to their popularity.   

What are the issues attached to E-vehicles? 

Moral blindness behind subsidies: The cost of a basic Nexon EV was Rs 14.3 lakh and that of the diesel variant Rs 8.3 lakh. At present five states — Delhi, Maharashtra, Gujarat, Karnataka, and Meghalaya are providing a huge amount of subsidies per car i.e., Rs. 5 lakh per car.  

• Issue: Only 1 car in 50 sold cars costs more than Rs 10 lakh, which is purchased by the affluent fraction of the car-owning population. It means that Rs. 2,770 crore subsidies from taxpayers, will be paid to the affluent class of the country.  

Available alternatives: Instead of promoting EVs, India can promote other cheaper alternatives. For instance,  

• Methanol can be produced from any biomass waste from crop residues to municipal solid waste. Furthermore, it is known for superior quality and greater safety 
• For India, gasification holds even greater promise. Simple, air-blown gasifiers are already in use in food processing that can convert rice and wheat straw into a lean fuel gas. This gas can generate electricity and provide guaranteed 24-hour power to cold storage in every village. 
• Biochar, which is the bi-product of gasification, is also very useful. It can replace imported coking coal in blast furnaces. It can also be used as a feedstock for producing transport fuels even more easily than municipal solid waste.