India, China vie to tap clean energy market by phasing out fossil-fuel vehicles

Hindustan Times, New Delhi/Beijing | ByChetan Chauhan and Sutirtho Patranobis
Oct 03, 2017 08:46 AM IST

Unlike China, which has more than 1 million new electric vehicles on roads, India produces a very small number of electric vehicles, most of which are either imported or assembled.

Asian rivals India and China are bracing for a new war that promises to be a breath of fresh air and change the way we commute.

Road and highways minister Nitin Gadkari said by 2030, not a single petrol or diesel car should be sold in India.(HT File Photo)
Road and highways minister Nitin Gadkari said by 2030, not a single petrol or diesel car should be sold in India.(HT File Photo)

The two countries want to transform mobility from fossil fuels to electric to tackle air pollution and control international trade in clean energy, a sector that is expanding at a fast clip.

China’s vice-minister for industry Xin Guobin announced recently his country was considering a ban on petrol and diesel-guzzling cars to phase out fossil-fuel vehicles.

India matched the announcement. Road and highways minister Nitin Gadkari last week declared the cabinet would soon take a call on the National Institution for Transforming India (Niti) Aayog’s suggestion to stop by 2030 the registration of fossil-fuel vehicles.

“The idea is that by 2030, not a single petrol or diesel car should be sold in India,” Gadkari said.

Electric vehicles run at least partially on electricity. They use an electric motor that is powered by electricity from batteries.

The electric push by the world’s two biggest vehicle markets could spur the global clean energy market that was worth $50 billion in 2016.

Around 736,000 electric cars were sold in 2016 and the number is expected to cross 150 million by 2030, with China and India leading the pack, International Energy Agency’s outlook for 2017 said, projecting an annual growth of 15.6% till 2030.

China, the agency said, was way ahead but India could “leapfrog” on the back of rapid expansion of the passenger light duty vehicle market. India could have more than 50 million electric cars in less than 15 years.

“It is a bold target,” said Sunita Narain, director general of the Delhi-based advocacy group the Centre for Science and Environment, of Gadkari’s announcement.

“Feasibility will depend upon what is our target — cars or mobility. Cars could be difficult but mobility (public transport) can be achieved as we will have multiple options.”

China’s first off the block

The Chinese announcement triggered a buzz. China sold the world’s most new electric vehicles (NEVs), which includes hybrids, in 2016, a 53% year-on-year increase. Sales are already up by 30% this year.

More than 1.3 million NEVs are running on China’s roads, of which more than 75% are electric cars, government data says.

In 1990s, China’s industrial policy focused on electric two-wheelers but sales only took off in the beginning of this decade, as prices came down and battery power improved.

China plans to build more than 12,000 charging stations before 2020 for more than five million NEVs.

“Promotion of electric vehicles became a part of industrial policy in the last decade with big investments in the run up to the Olympics,” said Lauri Myllyvirta, a Beijing-based global campaigner for Greenpeace.

NEVs would account for more than 40% of total auto sales by 2030, the Society of Automotive Engineers of China says.

Can India catch up?

India woke up to this growing market in 2015 when the government notified faster adoption and manufacturing of (hybrid &) electric vehicles scheme.

It gave subsidy on 160,000 vehicles but more than half of these were diesel hybrids, defeating the purpose of the programme aimed at reducing emissions.

Unlike China, India produces a very small number of electric vehicles. Most are either imported or assembled here. Nearly all the electric two-wheelers in India operated on poor quality lead-acid batteries as opposed to the state of the art lithium-ion batteries, said Anup Bandivadekar, director, passenger vehicles programme, at International Council on Clean Transportation.

Batteries, which accounted for 40% of the vehicle cost, were the real challenge, said Arunabha Ghosh, chief executive officer of Council on Energy, Environment and Water.

“In 2030, the battery demand would be five times of the batteries sold across the world currently” he said, adding India needed a high-quality battery-producing industry.

The Aayog has proposed incentives for vehicle manufacturers, including tax waiver and rebate on purchases.

The government intends to introduce carbon credits for electric-vehicle owners who could trade them for money.

The Aayog wants charging stations to be part of city planning and electricity charges to be lower than those for domestic consumers.

The government think-tank estimates that new age transport solutions could save $60 billion by 2030 and one gigatonne of carbon emissions — 37% of India’s carbon load — between 2017 and 2030.

“It would push innovative public transport,” an Aayog official said.

Narain agreed, saying electric transport would ensure energy security. “Having right incentives and public policy push such as government buying one lakh electric vehicles can drive down the high costs,” she said.

Some trials have begun. Taxi-hailing firm Ola had deployed electric three and four wheelers for a pilot and civic bodies in Himachal Pradesh and Karnataka were keen on electric buses, Bandivadekar said.

Step in the right direction

Experts in both countries see the shift as a step in the right direction, one that could cut air pollution by half.

“Two and three wheelers burn more fuel and emit about five times as much PM 2.5 as four-wheel private cars,” Greenpeace’s Myllyvirta said, adding China achieved a high electrification ratio in this segment.

The Indian electric car market in 2030 would be second only to China and would help in checking air pollution, Bandivadekar said.

India, like China, should first push for electric two-wheelers and then turn to public transport, they said.

A cleaner world

Both France and the United Kingdom plan to ban the sale of internal combustion vehicles by 2040. Norway is more ambitious — all light duty vehicles sold after 2025 are to be zero-emission vehicles.

“If India puts a right policy in place, India and China could be competing in 2030,” Bandivadekar said. “If that does not happen, Indian youth will lose a big job opportunity.”

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