Big push for electric vehicles to boost demand, cut air pollution
The Delhi government on Friday notified the Delhi Electric Vehicle (EV) Policy, 2020 -- with an aim to reduce air pollution and to kick-start the economy by spurring demand -- that offers subsidies,and road tax and registration free waivers, for electric vehicles bought in the Capital.
The policy, launched by chief minister Arvind Kejriwal on Friday, also talks about increasing road tax for fuel-based vehicles, at least in the luxury segment, and imposing in certain parts of the city a congestion fee that EVs will be exempt from. The details of both the surcharges are still being worked out, transport minster Kailash Gahlot said.
Addressing a digital press briefing, Kejriwal said the EV policy has been notified after consultations with consumers and experts from around the world over the past three years.
“It is believed worldwide that China has a really good electric vehicle system in place. But, now I am sure that when discussions on electric vehicles will be held across the world after five years, Delhi will be leading the way in this field. I am happy to say that our policy is one of the most progressive policies of all the electric policies across the world,” he said.
The government aims to register at least 500,000 EVs in Delhi in the next five years. Delhi has over 83,000 electric vehicles out of a total of over 11 million vehicles registered in the city. Of the more than 83,000 registered EVs, over 75,500 are e-rickshaws. There are only over 900 private electric cars and over 3,700 e-two-wheelers in Delhi as of now.
The Capital experiences a public health emergency every winter due to the rise in air pollution, which has become a recurrent annual crisis. “In the last five years, the people of Delhi have collectively worked together to reduce pollution levels, but we have to reduce it further,” Kejriwal said on Friday. “During the pandemic (lockdown), we saw that PM10 and PM2.5 levels witnessed a drastic reduction. We could see the clear skies and feel the clean breeze. So, this policy will give the Capital a much needed push towards a cleaner and greener Delhi,” he added.
There are largely two problems militating against the rise of private EVs in Delhi -- the high cost of purchase, and the lack of sufficient charging infrastructure -- and the policy aims to address both.
According to the document, those buying electric vehicles will be exempt from paying road tax and registration fee. At present, road tax ranges from 4% to 10% of the cost of the vehicle, while registration fee could cost up to Rs 3,000 In addition, a subsidy of Rs 5,000 per kWh of the battery capacity up to Rs 30,000 will be given on the purchase of each electric two-wheeler, auto-rickshaw, rickshaw and freight vehicle. 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 150,000 per vehicle.
To push people to shift to EVs, the policy also has a “scrapping incentive” for those who make the switch.
“Many people own polluting petrol and diesel vehicles. Since EVs are still relatively costlier in the market, under this policy, now an old fuel-based vehicle can be exchanged while purchasing a new e-vehicle so that it reduces the cost of the EV further. This scrapping incentive is being given for the first time in the entire country,” Kejriwal said.
Talking about providing adequate charging infrastructure to support the demand for EVs that the policy aims to create, Kejriwal said the government aims to set up at least 200 new EV charging stations across Delhi in 12 months. At present there are less than 25 operational authorised EV charging stations across Delhi.
Kejriwal said the policy -- it will be valid for a period of three years, after which it will be revised -- will also help in creating jobs “at a huge level” in the fields of driving, servicing, financing, charging and so on.
Gahlot said that the policy lays the maximum emphasis on two-wheelers, public transport and shared vehicles, and goods-carriers instead of private four wheelers.
“To purchase an electric commercial vehicle, the government will also offer loans to the people on low-interest rates. There are two types of electric vehicles, one which runs on fixed charging and the second, in which there is a need for battery swapping. The incentives will be available on all kinds of electric vehicles. All Delhi government vehicles will be EVs in the next 12 months. All two-wheelers engaged in last-mile deliveries such as food delivery, e-commerce, logistics etc. will be expected to shift 50% of their fleet to electric by March 31, 2023, and 100% of their fleet by March 31, 2025,” the transport minister said.
Kejriwal stressed that the grants offered by the Delhi government will be in addition to the subsidies offered by the Union government under its FAME India Phase 2 scheme, which offers similar incentives, especially on the purchase of electric two-wheelers and electric heavy passenger and goods vehicles, and has a total budget allocation of ₹10,000 crore nationally.
The government will set up a State EV fund, which will encompass all the expenditure of the EV Policy. A State Electric Vehicle Board will be constituted for effective implementation of the EV policy and managing the EV fund, and the chairman of the board will be the transport minister. Besides, a dedicated EV cell will also be constituted.
Experts and stakeholders from the industry welcomed the move. Anumita Roychowdhury, executive director (research and advocacy), Centre for Science and Environment (CSE) said it is commendable that despite the economic slowdown this policy has set a target to achieve 25% electrification of new fleet by 2024. “This zero emissions mandate is needed to cut air pollution and toxic exposure. But firm milestones are needed for time bound implementation. This move is an important message for green recovery post pandemic,” she said adding that at present only 0.2% of Delhi’s registered vehicles are EVs.
Naveen Munjal, managing director, Hero Electric Vehicles Private Limited, said the policy is “a great move towards a pollution-free nation”.
Mahesh Babu, CEO, Mahindra Electric thanked the Delhi government and Kejriwal for announcing “a long term futuristic” EV policy. “Mahindra will work jointly to transform the mobility sector to a sustainable one in Delhi,” he said.
RMI India, an independent think-tank that works with stakeholders to support India’s clean energy transition and which also worked with the Delhi government in this policy called the document a “game changer” in India’s EV story.
“Anchored to the objective of improving Delhi’s air quality, it is by far the most comprehensive sub-national policy that focuses on making EVs affordable to consumers and gives confidence to the industry. The system-level approach to vehicle electrification and emphasis on enabling an EV ecosystem will ensure that supportive conditions are in place to enable the much needed transition to zero emission mobility in Delhi,” said Akshima Ghate, director, RMI India.
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