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Relief to carmakers as govt drops the idea of an India electric vehicles policy

There is no need for any India EV policy now, says transport minister Nitin Gadkari, in a breather to many carmakers unprepared for the switch to electric vehicles.

business Updated: Feb 16, 2018 13:45 IST
EV Policy,India EV policy,Nitin Gadkari
Union minister Nitin Gadkari sits on the driving seat of an electric vehicle during the inauguration of two Electric Vehicle charging points at Niti Aayog, in New Delhi on Thursday.(PTI Photo)

The government has decided against formulating an electric vehicle (EV) policy in an apparent U-turn from its position so far, providing a breather to many carmakers that are unprepared for an abrupt shift to the clean-fuel technology.

“There is no need for any policy now,” Nitin Gadkari, minister for road transport, said at a press briefing on Thursday. He was addressing reporters along with Amitabh Kant, chief executive of government think tank NITI Aayog.

This is a remarkable volte-face, given that as recently as last month, Gadkari said the policy was awaiting approval from the union cabinet. He had earlier outlined the government’s ambitious plan to shift to electric vehicles by 2030. Companies such as Toyota Kirloskar Motor Pvt. Ltd, the local unit of Toyota Motor Corp., have been publicly voicing concerns about the proposed India EV policy.

“What we need is just action plans,” said Kant, backing Gadkari’s stand on the policy.

“Everyday, new technology is coming into the market. Technology is always ahead of rules and regulations. And in India, it becomes very tough to change rules and regulations, so let there be just actions,” Kant said, explaining the reason behind the decision.

Maruti Suzuki India Ltd chairman R.C. Bhargava said companies will now have the flexibility to choose a technology they want. “The fact that the government will allow the industry to work on any form of sustainable technology is itself a policy. So, if there isn’t a policy on electric vehicles, it is not a problem at all,” said Bhargava.

The government’s decision to have an EV policy had created uncertainty in the automobile industry for the past year, although several companies had outlined their strategies for EVs or lobbied the government to drop the idea.

“Implementing an EV policy package would need huge investments and with empty coffers, it is not possible for the government. So, the idea is left to the open market, manufacturers and the consumers,” a senior government official said,requesting anonymity.

Mahesh Babu, chief executive of Mahindra Electric Mobility Ltd, the country’s biggest EV maker, said the industry needs continued support from the government.

“We have already stated that the existing FAME (incentive) scheme should continue for another two years and electric vehicles should continue to be taxed at the current level. If these things continue, then there should not be a problem,” said Babu.

Electric vehicle sales are low in India because of few available models and a lack of charging infrastructure. Sales rose 37.5% to 22,000 units in fiscal 2016 from 16,000 in the previous year, according to automobile lobby group Society of Manufacturers of Electric Vehicles (SMEV). Only 2,000 of these were, however, cars and other four-wheelers.

To overcome some of the problems for electric vehicles, NITI Aayog, along with Colorado-based Rocky Mountain Institute, in their 2017 report on the future of shared, electric and connected mobility future in India, had suggested setting up “a manufacturer consortium for batteries, common components, and platforms to develop battery cell technologies and packs and to procure common components for Indian original equipment manufacturers”.

The report said that adoption of electric and shared vehicles could help India save $60 billion in diesel and petrol, along with cutting down as much as 1 gigatonne of carbon emissions by 2030.

First Published: Feb 16, 2018 13:44 IST