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How commercial vehicles are leading India’s electric vehicle revolution

Lack of infrastructure, high prices and limited choices are some of the reasons why Indians aren't too enthused to buy personal EVs.

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In 2017, India’s transport minister Nitin Gadkari announced India’s plan to manufacture 100 per cent electric vehicles by 2030, a plan that was dismissed as by many as too ambitious. But an assertive Gadkari made it clear he wasn’t asking for a shift, he’d “bulldoze” the initiative if need be. One year down the line, Gadkari diluted the goal and pegged electric vehicles at 30 per cent of the total traffic on the road by 2030. 

According to a Bloomberg report from October 2019, India sold only 8,000 electric cars in six years. China sells more than that in two days. 

In the face of stagnant consumer demand for EVs, it is commercial vehicles that are paving the way for India’s electric revolution. 

Electric vehicle start-ups

India’s first all-electric taxi fleet was introduced by Lithium Urban Technologies. Founded by Sanjay Krishnan and Ashwin Mahesh in Bengaluru in 2015, the cab service runs on a business to business (B2B) model, providing employee transportation solutions to companies. This not only helps them bring down costs but also earns them carbon credits. The service is now available in cities across India like Gurugram, Noida, Jaipur, Hyderabad, Mumbai, Pune and Manipal, and has raised over 20 million dollars in investment. 

Blu Smart, India’s first on-demand electric taxi service, was launched in Delhi in 2019. Founded by Punit Goyal, Puneet Singh Jaggi and Anmol Singh Jaggi, it raised US$ 3 million in its first round of angel investments and has garnered support from Bollywood star Deepika Padukone who invested in the venture. “What smartphones did to landlines, electric vehicles will do to petrol and diesel cars,” Goyal tells ThePrint, adding that Blu Smart strives to be the “Ola-Uber” of electric vehicles. “Ola and Uber have done a great job, but we start where they left off.” Aiming to increase its fleet size to 5,500 in Delhi NCR by the end of 2020, Blu Smart is increasing its fleet by one car every 12 hours.

A Blu Smart cab | By special arrangement

According to reports, government think tank NITI Aayog is planning to make it mandatory for Uber and Ola to make 40 per cent of their fleets electric by 2026. 

Ola started its EV pilot project in association with Mahindra in May 2017 in Nagpur. It started with 200 EVs on its app, including auto-rickshaws and cars. In 2019, Ola incorporated a separate entity for EV business, Ola Electric Mobility. It rose to unicorn status in 2019, when Softbank invested more than US$225 million in the startup. Ola Electric Mobility’s goal is to have a million electric cars on India’s roads by 2021. 

When contacted for the story, representatives of Ola Electric Mobility declined to comment.

Also read: How to build a morally ethical self-driving car

Lack of infrastructure 

The dearth of charging stations in India is one of the reasons why Indians are reluctant to buy electric vehicles. On average, an EV takes more than an hour to charge and covers about 120-140 kilometres in a single charge. Only corporates have the kind of resources to set up adequate charging stations on their end, which is another reason they’re more willing to embrace this shift.

Vikash Mishra, head of external relations at Lithium Urban Technologies, says, “There are less than 500 charging stations in India [outside of Lithium’s], when we should have ideally had more than 2,600 by now. China has more than 5 lakh,”. He adds that functioning on a B2B model helps them map routes and plan charging in advance. “We have set up our own charging stations, more than 1,500, in accordance with client location and routes, it helps us plan charging in advance, that on an average takes more than an hour.” Mishra believes it should also fall on companies investing in electric mobility to contribute towards setting up charging stations as their “moral responsibility”.

Lithium Urban Technologies Fleet | By special arrangement

Blu Smart has partnered with various companies to set up dedicated charging stations on its routes, what Goyal terms as “the Airbnb of charging stations”, in association with REIL (Rajasthan Electronics India Limited). 

Government intervention 

In the 2019 budget, Finance Minister Nirmala Sitharaman had announced an income tax exemption of up to Rs. 1.5 lakh for people who’d buy electric vehicles on loan, which would lead to a total benefit of Rs. 2.5 lakh to the taxpayer over the period of buying. The government also brought down GST rates on electric vehicles from 12 to 5 per cent. However, the tax rebate failed to boost demand and in 2019, only 1,309 electric car units were sold between April and November. 

The government’s FAME (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles) scheme announced in 2019, was a major boost for the industry, with the government allocating Rs. 10,000 crores over a period of three years. The policy incentivises local manufacturers of EV components and allocated over Rs. 1,000 crore for setting up charging infrastructure across India. However, the government has asserted that the benefits of FAME are limited to commercial vehicles only. 

Budget 2020 was silent on electric vehicles and in fact, increased customs duty on imported CBUs (Completely Built Units) from 25 to 40 per cent, in a bid to promote local manufacturing. 

The future of electric mobility 

“All cars in the future will be electric, it’s imminent,” claims Goyal. “In fact, after attending various auto expos in India and abroad, I think all new car models produced will be electric by 2023.” 

The automobile industry is one of the biggest contributors to pollution and aggravating the climate crisis: according to a study conducted by the International Council on Clean Transportation (ICCT), George Washington University and the University of Colorado Boulder in the US, about two-thirds of the deaths caused by air pollution could be linked to diesel vehicular pollution. 

Petrol- and diesel-powered cars also come with the additional baggage of fossil fuel pollution, one of the biggest contributors to the climate crisis. A report by Greenpeace South Asia states the cost of air pollution due to fossil fuel borne by India is almost 5.4 per cent of the total GDP. The same report states that the global cost of air pollution caused by fossil fuels is US$ 2.9 trillion. 

“Electric cars will have a positive impact on the economy and the environment. India imports 80 per cent of its total crude oil needs, and electric vehicles could help it save up to US$ 100 billion in Forex reserves,” adds Mishra. He notes that Lithium Urban Technologies has already saved 20,000 metric tonnes of carbon dioxide emissions in its estimated 100 million kilometres run. 

India is home to 20 of the most polluted cities in the world. A study conducted by TERI stated that vehicular pollution contributes 28 per cent to PM 2.5. 

(This report has been updated to reflect that Lithium Urban Technologies raised $20 million in investments, not $200 million.)

Also read: India has 15 crore drivers and only 8,000 want electric cars


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