Electric Vehicles and National Electric Mobility Mission

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Context: The Supreme Court has sought the response of the government on a petition that alleges the non-implementation of the National E-Mobility Mission Plan, 2020 (NEMMP), which came out in 2012.

Relevance:
Prelims: Current events of naitonal and internaitonal importance.
Mains: GS III- 

  • Awareness in the fields of IT, Space, Computers, robotics, nanotechnology, biotechnology and issues relating to intellectual property rights.
  • Infrastructure: Energy, Ports, Roads, Airports, Railways, etc.
  • Conservation, environmental pollution and degradation, environmental impact assessment.

 

Content:
  • What is an electric vehicle?
    • The State of EVs in India
  • Why there is a need for electric vehicles in India? Push for electric mobility?
    • Impact of electric vehicles
  • Bottlenecks And Challenges in Electric vehicles?
    • How are cost structures of conventional vehicles and electric vehicles different?
    • Are EV vehicles completely environment-friendly?
    • Do not push EVs as the Only Measure
    • Other solutions available
    • Other loopholes in electric vehicles
  • Challenges And Solutions To Implement  electric vehicles
    • What challenges India is facing in mainstreaming electric vehicles?
  • Solutions:
    • Government Initiatives
      • National Electric Mobility Mission: 2020
      • Supreme Court On NEMMP
      • Faster Adoption and Manufacturing of (Hybrid &) Electric vehicles(FAME) 1 
      • FAME II
      • National Mission on Transformative Mobility and Battery Storage
      • Phased Manufacturing Programme
      • Union Budget 2019-20 On Electric Vehicles
      • Power ministry has revised guidelines for setting up charging infra for EVs
      • ‘MOVE: Global Mobility Summit’
  • Comparison With Other Countries
    • NuGen Mobility Summit, 2019
    • About ICAT
  • What India needs to be done address in order to move towards electric mobility? 
  • Conclusion

What is an electric vehicle?
  • All-electric vehicles run on electricity only. An electric vehicle uses one or more electric motors or traction motors for propulsion.
  • An electric vehicle may be powered through a collector system by electricity from off-vehicle sources or may be self-contained with a battery, solar panels or an electric generator to convert fuel to electricity.
  • EVs include road and rail vehicles, surface and underwater vessels, and electric spacecraft.

The State of EVs in India:

  • According to the Economic Survey, the market share of electric cars is only 0.06 % in India when compared to 2 % in China (world’s largest EV market) and 39 % in Norway.
  • Reasons for a lesser market presence of EVs in India are lack of charging infrastructure and high cost.

Why there is a need for electric vehicles in India? Push for electric mobility:
  • Climate change:
    • The problem of rapid global temperature increase has created the need for a reduction in the use of fossil fuels and the associated emissions.
    • India has committed to cutting its GHG emissions intensity by 33% to 35% percent below 2005 levels by 2030.
  • Rapid urbanization:
    • Economic development leads to rapid urbanization in emerging nations as rural populations move non-agricultural sectors in cities creating environmental problems.
    • According to a recent study by WHO, India is home to 14 out of 20 most polluted cities in the world. EVs will help in tackling this problem by reducing local concentrations of pollutants in cities.
  • Energy security:
    • India imports oil to cover over 80 percent of its transport fuel.
    • EVs can reduce dependence on imported crude oil promoting India’s energy security.
  • Innovation:
    • It will encourage cutting edge technology in India through adoption, adaptation, and research and development.
    • EVs manufacturing capacity will promote global scale and competitiveness.
  • Employment:
    • Promotion of EVs will facilitate employment growth in a sun-rise sector.
  • Clean and Low carbon Energy:
    • The shift towards renewable energy sources has led to cost reduction from better electricity-generating technologies. This has introduced the possibility of clean, low-carbon and inexpensive grids.
  • Cutting edge Battery Technology:
    • Advances in battery technology have led to higher energy densities, faster charging and reduced battery degradation from charging.
    • Combined with the development of motors with higher rating and reliability, these improvements in battery chemistry have reduced costs and improved the performance and efficiency of electric vehicles.
India’s deteriorating air quality: as per Lancet medical journal
  • In 2014, the World Health Organisation’s urban air quality database had found four Indian cities to be among the world’s 10 most polluted.
  • The database also placed 10 Indian cities in the 20 worst list.
  • In urban India, emissions from motor vehicles are among the prime reasons.
  • The challenge of rising vehicular pollution in Indian cities is pushing for using electric vehicles in India.

Impact of electric vehicles: Impact on oil industry.

  • A large volume of oil will go unused.
  • Prices of petroleum will reduce. Hence less profit for automakers which will affect employment in this sector.
  • It could be a disaster for many oil-exporting and OPEC countries. May lead to a financial crisis.
  • Less demand for oil will result in a fall in domestic exploration and a fall in investment in the oil sector.

 

Bottlenecks And Challenges:

How are cost structures of conventional vehicles and electric vehicles different?

  • The portion of the costs of the drive train of EVs the system in a motor vehicle that connects the transmission to the drive axles in comparison to the cost of the entire vehicle is 4% lower compared to ICE vehicles.
  • This is primarily due to less part in the electric drive train.
  • However, the battery pack takes up nearly half the cost of an electric vehicle.
  • For any meaningful reduction in the physical value of EVs, the cost of battery packs needs to reduce significantly.

Components of a battery pack and their cost:

  • The predominant battery chemistry used in EVs is lithium-ion batteries (Li-ion).
  • No new technologies are on the horizon for immediate commercial usage.
  • The cost of the materials or key-components of the battery, namely the cathode, anode, electrolyte, separator, among others, contribute the most (60%) to the total cost.
  • Any reduction in the cost of the battery pack will have to come from a reduction in materials cost or the manufacturing overhead.

How has the cost of the Li-ion battery pack cost evolved in the last decade?

  • The price of these battery packs has consistently fallen over the past few years.
  • This decrease is in part due to technological improvements, economies of scale and increased demand for lithium-ion batteries.
  • Fierce competition between major manufacturers has also been instrumental in bringing down prices.
  • The chart shows the change in the price of Li-ion batteries from 2010 to 2016. It is not clear if the battery cost can be reduced even further.
  • Given that raw materials account for 60% of the cost of the battery pack, the room for further cost reduction is rather limited.

 

Are EV vehicles completely environment-friendly?

  • In conventional ICEs, petrol or diesel fuels the engine.
  • However, in EVs, batteries are not the fuel; electrons supplied by the battery fuel the vehicle.
  • Presently, most of India’s electricity is generated using conventional sources.
  • In 2018-19, over 90% of India’s electricity was generated from conventional sources, including coal, and around 10% was produced from renewable sources such as solar, wind, and biomass.
  • While the rate of electricity generated from renewable sources has increased over the years, more needs to be done for their adoption.
  • This is because the EV-charging infrastructure needs to be powered through renewable sources to make it truly sustainable.

Do not push EVs as the Only Measure:

  • We still cannot ensure a 24×7 electricity supply to hospitals. All our villages still do not have a reliable electricity supply.
  • Close to 80% of the electricity generated is from coal and gas. Yet another 50,000MW of coal-fired power plants are being set up under the National Electricity Plan.
  • More than 20% of all the electricity generated goes into “transmission and distribution losses”.
  • Due to inadequate and irregular last-mile supply, close to 15 million tonnes of diesel is used by local generators to produce 80 billion kWh of electricity. 
  • Close to $2 billion worth of battery storage capacity is imported every year.
  • Most independent power plants operate at 12-15% below their declared capacity as they over-invoice plant costs. 
  • There will be immense pressure on the power grid that is not yet fully reliable.

Other solutions available:
  • Air pollution :
    • Construction dust, road dust, thermal power generation, diesel generators, traditional cooking fuels, stubble burning, and open waste burning also contribute. Need action against each of these sources.
    • Dependence on fossil fuels can be cut down not just by banning diesel, but by other more sane and immediate measures. Upgrade to the latest diesel-engine technology in public transport, reduce traffic congestion, ensure adequate power supply and get into diesel-blends.
    • Ban all Bharat Stage 3 (BS3) vehicles and below. At once, close to 40% of all the 300 million vehicles on the roads will be gone. There’s no “vehicle scrappage policy”.
  • Public transport:
    • Assure top-notch public transport in India’s top 24 cities. A multi-modal grid of trains, buses, taxis, three-wheelers and two-wheelers could achieve this.
    • Incentivize the manufacture and purchase of public transport vehicles through lower GST and cheaper loans.
    • Encourage greater use of public transport among citizens through redemption and loyalty programs. 
    • Get all organizations with more than 100 employees to use bus fleets.
    • Decongest the 60 top smart cities. They constitute almost 90% of our vehicular population and thus vehicular pollution. We need to focus on smoother traffic flow, better parking management, and pedestrian movement. Close to 12% of vehicular fuel is wasted on idling and traffic snarls. 
    • Expand the traffic police strength by four-five times in over-jammed cities.
    • Create and mandate dedicated parking spots for shared mobility services.
    • Create vast grids of pedestrian skywalks. Operate multi-level parking lots.
  • Each of these measures would show an immediate impact on vehicle-caused pollution and the use of fossil fuels

Other loopholes in electric vehicles:

  • Most of the electric vehicles especially cars need to be recharged again.
  • Electric cars are however silent and can lead to accidents in some cases.
  • Limited seating capability.

 

Challenges And Solutions To Implement  electric vehicles:

What challenges India is facing in mainstreaming electric vehicles?

 

  • Lack of a stable policy for EV production:
    • EV production is capital intensive sector requiring long term planning to break even and profit realization, uncertainty in government policies related to EV production discourages investment in the industry.
  • Technological challenges:
    • India is technologically deficient in the production of electronics that form the backbone of the EV industry, such as batteries, semiconductors, controllers, etc.
  • Lack of associated infrastructural support:
    • The lack of clarity over AC versus DC charging stations, grid stability and range anxiety (fear that battery will soon run out of power) are other factors that hinder the growth of the EV industry.
  • Lack of availability of materials for domestic production:
    • Battery is the single most important component of EVs. India does not have any known reserve of lithium and cobalt which are required for battery production. India is dependent on countries like Japan and China for the import of lithium-ion batteries.
  • Lack of skilled workers:
    • EVs have higher servicing costs and higher levels of skills are needed for servicing. India lacks dedicated training courses for such skill development.
Government Initiatives:
  • The government has set a target of electric vehicles making up 30 % of new sales of cars and two-wheelers by 2030 from less than 1% today.
  • To build a sustainable EV ecosystem initiatives like – National Electric Mobility Mission Plan (NEMMP) and Faster Adoption and Manufacturing of (Hybrid &) Electric vehicles in India (FAME India) have been launched by India.
National Electric Mobility Mission: 2020
  • Introduction:
    • It was launched in 2013 with an aim to achieve national fuel security by promoting hybrid and electric vehicles in the country. There is an ambitious target to achieve 6-7 million sales of hybrid and electric vehicles year on year from 2020 onwards.
  • National Electric Mobility Mission is a composite scheme using different policy-levers such as:
    • Demand-side incentives to facilitate the acquisition of hybrid/electric vehicles.
    • Promoting R&D in technology including battery technology, power electronics, motors, systems integration, battery management system, testing infrastructure, and ensuring industry participation in the same.
    • Promoting charging infrastructure.
    • Supply-side incentives.
    • Encouraging retro-fitment of on-road vehicles its hybrid kit.
  • Objectives:
    • Mitigation of the adverse impact of vehicles on the environment.
    • Achieve national energy security.
    • Growth of domestic manufacturing capabilities in the automobile sector.
  • Under NEMMP 2020, Government has launched Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) scheme to promote manufacturing of electric and hybrid vehicle technology.

Supreme Court On NEMMP
  • The Supreme Court has sought the response of the government on a petition that alleges the non-implementation of the National E-Mobility Mission Plan, 2020 (NEMMP), which came out in 2012.

What was the petition about?

  • The petition contended that the governmental apathy has violated the fundamental rights of citizens to health and clean environment guaranteed under Articles 14 and 21 of the Constitution.
  • The government had failed in its obligation to mitigate the impact of climate change and air pollution partly attributable to emissions from vehicles that burn fossil fuels.
  • Government’s failure to suitably implement these recommendations is the direct cause of air pollution levels that have turned our cities into virtual ‘gas chambers’.

 

Faster Adoption and Manufacturing of (Hybrid &) Electric vehicles(FAME) 1 :
  • Objective:
    • FAME India Scheme [Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India] was launched in 2015 with the objective to support hybrid/electric vehicles market development and manufacturing ecosystem.
  • Features:
    • The scheme has 4 focus areas i.e. Technology Development, Demand Creation, Pilot Projects and Charging Infrastructure.
    • Organizations like Bureau of Indian Standards (BIS), Department of Heavy Industry, Automotive Research Association of India are devising design and manufacturing standards of EVs, Electric Vehicle Supply Equipment (EVSEs) & charging infrastructure to smoothen the advent of in-house production of EVs.
    • In this phase, market creation through demand incentives was aimed at incentivizing all vehicle segments i.e. 2-Wheelers, 3-Wheelers Auto, Passenger 4-Wheeler vehicles, Light Commercial Vehicles, and Buses.

FAME II:
  • Objective:
    • Phase-II of FAME seeks to give a push to EVs in public transport and seeks to encourage the adoption of EVs by way of market creation and demand aggregation.
    • It envisages the holistic growth of the EV industry, including providing for charging infrastructure, research, and development of EV technologies and push towards greater indigenization.
  • Features:
    • Establishment of Charging stations are also proposed on major highways connecting major city clusters on both sides of the road at an interval of about 25 km each.
    • The scheme with a total outlay of Rs 10,000 Crores over the period of three years will be implemented with effect from 1st April 2019.
    • FAME 2 will offer incentives to manufacturers, who invest in developing electric vehicles and its components, including lithium-ion batteries and electric motors.
    • The center has asked states to frame their EV policy and provide additional fiscal and non-fiscal incentives to manufacturers and buyers.
  • Focus areas:
    • In phase two, the emphasis is on the electrification of public transportation that includes shared transport.
    • The second phase will also not provide any incentive for passenger cars used for personal use.
    • In the two-wheelers segment, however, the focus will be on private vehicles.
    • Demand Incentives on operational expenditure mode for electric buses will be delivered through State/city transport corporation (STUs).
    • In 3W and 4W segment incentives will be applicable mainly to vehicles used for public transport or registered for commercial purposes.
    • To encourage advanced technologies, the benefits of incentives will be extended to only those vehicles which are fitted with advanced batteries like a Lithium-Ion.
  • Necessary charging infrastructure:
    • It also proposes for the establishment of charging infrastructure, whereby about 2700 charging stations will be established in metros, other million-plus cities, smart cities and cities of hilly states across the country.
    • It will ensure availability of at least one charging station in a grid of 3 km x 3 km.
  • Impact:
    • Inclusion of buses, taxi, and e-rickshaws under Fame 2 will play a critical role to promote EVs.
    • The transition to electric buses is expected to not only help reduce carbon footprint but also save fuel.

 

National Mission on Transformative Mobility and Battery Storage:
  • To promote clean, connected, shared, sustainable and holistic mobility initiatives.
  • The Mission will drive mobility solutions that will bring in significant benefits to the industry, economy, and country.
Phased Manufacturing Programme:
  • Valid for 5 years till 2024 to support setting up of a few large-scale, export-competitive integrated batteries and cell-manufacturing Giga plants in India.
  • Creation of a PMP valid for 5 years till 2024 to localize production across the entire Electric Vehicles value chain.

Union Budget 2019-20 On Electric Vehicles:

  • The Union Budget 2019-20 included several incentives for developing electric vehicle industry (EV Industry) in India.
  • Income tax rebates of up to ₹1.5 lakh to customers on interest paid on loans to buy electric vehicles, with a total exemption benefit of ₹2.5 lakh over the entire loan period.
  • Customs duty exemption on lithium-ion cells, which will help lower the cost of lithium-ion batteries in India as they are not produced locally.
  • This is in addition to the ₹ 10,000 crore allocated for EVs under the FAME II scheme.
  • Makers of components such as solar electric charging infrastructure and lithium storage batteries and other components will be offered investment-linked income tax exemptions.
  • Proposal to reduce the GST rate on electric vehicles from the current 12% to 5%.
  • GST rates on electric vehicles have been slashed from the earlier 28% with cess to 12% with no cess.
  • The sale of electricity has been allowed as a 'Service' for the charging electric vehicles which is set to provide huge incentives in order to attract investments into charging infrastructure.
  • Ministry of Road Transport Highways issued notification regarding exemption of permit in case of battery-operated vehicles.

 

Power ministry has revised guidelines for setting up charging infra for EVs:
  • Why such a move?
    • Lack of charging infrastructure is one of the main reasons behind the poor adoption of electric mobility in India.
    • As the State Transport Units (STUs) have started operating electric busses on different routed lack of charging infrastructure has proven to be a significant roadblock.
  • Highlights of the revised guidelines:
    • At least one Charging Station to be available in a grid of 3 Km x 3 Km in the cities and one Charging Station at every 25 Km on both sides of highways/roads.
    • All Mega Cities & expressways connected to these Mega-Cities to be taken up for coverage in the first phase, other big cities to be taken up in the second phase.
    • For inter-city travel, Fast Charging Station to be installed at every 100 km.
    • Separate charging stations for heavy electric vehicles like buses or trucks after every 100 km on both sides of highways.
    • Bureau of Energy Efficiency (BEE), a statutory body under Ministry of Power has been nominated as the Central Nodal Agency to facilitate installation of Charging Infrastructure.
    • These Revised Guidelines and Specifications for charging infrastructure shall supersede the earlier guidelines and standards.

Bureau of Energy Efficiency (BEE):

  • The BEE is a statutory body under the Ministry of Power, Government of India.
  • It assists in developing policies and strategies with the primary objective of reducing the energy intensity of the Indian economy.
  • BEE coordinates with designated consumers, designated agencies, and other organizations to identify and utilize the existing resources and infrastructure, in performing the functions assigned to it under the Energy Conservation Act, 2001.

 

 ‘MOVE: Global Mobility Summit’
  • NITI Aayog, in collaboration with various ministries and industry partners, is organizing ‘MOVE: Global Mobility Summit’.
  • This Summit will help drive the Government’s goals for vehicle electrification, renewable energy integration, and job growth and also speed up India’s transition to a clean energy economy.

 

Comparison With Other Countries:
  • In major cities in developed markets such as Frankfurt (Germany) and others, EVs are given free parking space and in certain parts of cities, only such eco-friendly vehicles are allowed.
  • European Union (EU) countries are also trying to evolve into a hub for developing batteries and other spare parts for electric vehicles through the Strategic Action Plan For Batteries.
  • The continent hosts the countries with the largest base of electric car sales. Norway, for instance, leads the electric vehicle market—EVs comprised 46% of the total vehicles sold in the country in the year 2018.
  • In the US, California is legislating tough emission norms for vehicles and providing fiscal incentives for plug-in hybrid and battery electric vehicles.

NuGen Mobility Summit, 2019:

  • The International Centre for Automotive Technology (ICAT) is organizing a NuGen Mobility Summit, 2019, at Manesar, NCR.
  • The objective of the Summit is to share new ideas, learnings, global experiences, innovations and future technology trends for faster adoption, assimilation and development of advanced automotive technologies for a smarter and greener future.
  • The event aims to bring together the automotive OEMs, professionals, researchers, academic experts, vehicle system suppliers, test equipment supplier, quality managers, product planners, component developers, SAE members and students from all over the world.

About ICAT:

  • The International Centre for Automotive Technology (ICAT), Manesar, located in the northern automotive hub of India, is a leading world-class automotive testing, certification and R&D service provider under the aegis of NATRiP (National Automotive Testing and R&D Infrastructure Project).
  • It is a division of NATRIP Implementation Society (NATIS) under the Department of Heavy Industries, Government of India.
  • It provides services for testing, validation, design, and homologation of all categories of vehicles.
  • It has a mission to assist the automotive industry in adopting cutting edge technologies in-vehicle evaluation and component development in new generation mobility solutions.

 

What India needs to do in order to move towards electric mobility?

  • The NITI Aayog lays stress on the need for a robust action plan to move towards electric mobility by 2030, India needs to address five fundamental issues immediately.
  • Lead actor:
    • EVs, involve several actors at the national, state and city levels, respectively.  It needs multiple ministries as well as national institutes such as NITI Aayog.
    • Since the initial EV revolution would predominantly be an urban one, State and city-level players need to be involved so as to address several technical and infrastructural needs.
    • Coordination between all three is crucial in driving the EV agenda.
  • Figuring out the best mode forward:
    • China has focussed on the use of electric buses as a catalyst for EV penetration.
    • It is the largest electric bus manufacturer in the world, with most in use in the country.
    • In 2016 about 80,000 electric buses were added to China’s roads.
    • The Netherlands has captured the EV market using a simple yet well-crafted strategy of creating charging infrastructure and encouraging investment in charging technology by providing incentives to EV buyers.
    • Netherlands has the densest charging infrastructure in the world and is a major exporter of this technology.
    • These two case studies show that sustained growth is possible only due to the positive economic impacts of EVs.
    • India is today the largest manufacturer and exporter of two-wheelers and auto-rickshaws.
  • Battery conundrum:
    • India does not produce lithium-ion (Li-ion) batteries currently, and companies making battery packs are dependent almost exclusively on imports from China.
    • This is a cost-saving strategy as setting up a cell manufacturing unit in India would be expensive.
    • Accelerating EV use in India should be linked to the “Make in India” goal and domestic battery production.
    • Investment is required for research and development in battery-making and exploring alternative technologies.
  • Charging infrastructure:
    • EV charging is more than just using electricity.
    • It involves an exchange of information requiring a communication protocol.
    • There is no unique or single-charging technology for EVs.
    • The three major EV users, China, Japan, and the European Union, have their own charging technologies which are often conflicting and not interchangeable.
    • The absence of a standard global infrastructure is a major deterrent for EV penetration in India, as creating infrastructure can be cost-intensive. For this, the government needs to select or develop appropriate charging technology that avoids multiplicity and reduces the cost of infrastructure, while making it convenient and safe for users.
  • Jobs and economic impact:
    • India is the world’s fourth-largest fifth auto market, where over 25 million motor vehicles are produced.
    • The sector is estimated to provide direct and indirect employment to about three crore people and accounts for 7.1% of the nation’s GDP.
    • The industry is estimated to grow to $300 billion in annual revenue by 2026, creating 65 million additional jobs, and contributing over 12% to the GDP.

Conclusion:

  • EVs have the potential to disrupt the mobility ecosystem, and, if implemented well, could have a positive impact on the economy as well as the urban environment.
  • India, however, needs a road map, with timelines, processes, well-researched impact studies, bold initiatives and robust investments in technological research to turn its EV dream into reality.
  • A thorough qualitative and quantitative estimation of the new jobs the EV sector will create would go a long way in negating apprehensions and securing the pathway for EV technology and use.



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