The Delhi government has recently announced its Electric Vehicles (EV) Policy 2020. The policy primarily focuses on replacing two-wheelers, public transport and shared vehicles and goods-carriers with electric vehicles (EVs), rather than focusing on private four-wheelers.
Key Features of the EV Policy
The policy aims to replace existing auto-rickshaws and state buses with e-autos and e-buses respectively. It also hopes to ensure that delivery-based services in the city transition to e-mobility.
The policy includes proposals for increasing road tax for fuel-based vehicles, particularly in the luxury segment, and implementing a congestion fee in certain areas of the city from which EVs would be exempt.
A ‘scrapping incentive’ will be offered to those wanting to switch to EVs, allowing them to trade in an old fuel-based vehicle when purchasing a new EV, further lowering the cost. The government will also provide low-interest loans for those interested in purchasing commercial EVs.
Additionally, subsidies, and road tax and registration fee waivers will be granted for EVs purchased in the capital.
Financial Incentives and Support
Currently, road tax for vehicles ranges from 4% to 10% of the vehicle’s cost, while the registration fee can be up to Rs. 3,000. Additionally, a subsidy of Rs. 5,000 per kWh of the battery capacity up to Rs. 30,000 will be provided for each EV purchase.
For the first 1,000 e-cars or electric four-wheelers, a subsidy of Rs. 10,000 per kWh will be given, capped at Rs. 1,50,000 per vehicle. These grants will be given in addition to the subsidies offered by the Union government under its FAME India Phase 2 scheme.
Establishment of a State EV Fund and Electric Vehicle Board
A State EV fund will be established to cover all expenses of the EV Policy. A State Electric Vehicle Board will also be created for effective implementation of the policy and managing the fund. Moreover, a dedicated EV Cell will also be constituted.
Goals of the EV Policy
The policy intends to reduce air pollution and jumpstart the economy by increasing demand. Delhi faces an annual public health crisis due to rising air pollution levels every winter. However, during the Covid-19 lockdowns, the city saw significant reductions in PM10 and PM2.5 levels.
The EV policy aims to address two main challenges: the high upfront cost of EVs and a lack of sufficient charging infrastructure. The goal is to have at least 500,000 EVs registered in Delhi within the next five years.
Impact on Delivery and Ride-hailing Services
Ride-hailing services will be permitted to operate electric two-wheeler taxis, subject to guidelines from the Transport Department. It is anticipated that the policy’s incentives will encourage delivery service providers, e-commerce logistics providers and couriers to switch to using electric two-wheelers.
Delivery service providers are expected to convert 50% of their fleet operating in Delhi to electric by 31st March 2023 and 100% by 31st March 2025. Those that commit to these targets will be eligible for financing support from the Delhi Finance Corporation.
Auto-rickshaws Under the New Policy
Incentives related to purchase (Rs. 30,000 per vehicle) and usage of new electric autos will be provided. An open permit system will provide permits on a first-come-first-served basis to those with valid light motor vehicle driving licenses and a Public Service Vehicle badge.
Buses Going Electric
The policy envisions that half of the state-run buses will be pure electric buses within the next three years, starting with the induction of 1,000 pure electric buses by 2020.
Central Government Initiatives on EVs
The Indian government has set a target for EVs to make up 30% of new car and two-wheeler sales by 2030. Initiatives such as the National Electric Mobility Mission Plan (NEMMP) and Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) have been launched to build a sustainable EV ecosystem.
The Path Ahead
Affordable, accessible, inclusive and safe mobility solutions are vital levers for rapid economic development and improving ‘Ease of Living’. Establishing the correct coordination among the three pillars of the EV industry – urban planning, transportation and power sectors can help in the systematic adoption of EVs. The rapidly growing EV sector could potentially give a significant boost to the ‘Make in India’ initiative.
