Despite push, government departments show little appetite for electric cars
State-run Energy Efficiency Services Limited (EESL), which was tasked with procuring 10,000 electric cars for government departments by January 31 this year, has been granted a year’s extension, owing to lack of demand for their deployment to replace diesel- and petrol-fuelled vehicles in existing fleets, according to the ministry of power.
EESL, a joint venture company of state-owned firms under the power ministry, has finished the procurement process of 10,000 e-cars under the national e-mobility programme that was launched by the Centre in March 2018, although it hasn’t taken delivery or paid for the cars.
That was to be done against demand from government departments to which these vehicles were to be provided on lease or on the basis of an outright purchase, to replace their existing fleet of petrol and diesel vehicles.
Till date, only 652 e-cars have been deployed in government departments; 295 AC and 161 DC captive chargers have also been deployed in their premises to charge these cars. The most number of vehicles have been deployed in Andhra Pradesh (280) and Delhi (256).
“ Demand has been low in the past couple of months but anything new takes time to settle. Apart from these (652) cars around 1,500 cars are under various stages of deployment right now and we have also signed a memorandum of understanding (MoU) of 500 cars with a taxi aggregator — Blu Smart, which is an app based EV (electric vehicle) cab service,” said Saurabh Kumar. managing director at EESL. Kumar expects demand to rise, and said the Indian Army and Indian Railways will soon start procuring cars from EESL.
Interestingly, while the original plan was to supply the electric vehicles to government departments, EESL decided to supply cars to Blu Smart because of high demand from the aggregator.
“As per the Letter of Award (LoA) issued on 13 October 2017 (for 400 e-cars) and 28th February 2018 (for 9,600 e-cars), the e-cars were to be supplied by 30th November 2017 and 31st January 2019 respectively. However, the demand for e-cars has been less than estimated,” union minister of power RK Singh informed Parliament last week.
The tepid response from government departments has caused EESL to put its second procurement drive (also for 10,000 EVs) on hold.
According to an official at the ministry of power, poor performance by the electric vehicles was also cited a an issue by government officials who were keen to opt for petrol and diesel vehicles instead.
The Central government has been aggressively promoting the transition towards the electric mode of transport. The Goods and Services Tax (GST) Council on Saturday also cut the tax rate on electric vehicles (EVs) to 5% from 12%, a reduction that may lower the prices of electric cars by between ₹50,000 and ₹1.5 lakh.
In the first budget of the National Democratic Alliance (NDA) government’s second tenure, union finance minister Nirmala Sitharaman announced income tax rebates of up to Rs. 1.5 lakh to customers on interest paid on loans to buy EVs, with a total exemption benefit of Rs. 2.5 lakh over the entire loan repayment period.
“E-Mobility in India is still in a nascent stage. Like any new technology, E-Mobility, too, will take some time to fully scale up. Apart from the 652 vehicles, there is a firm order of around 600 more vehicles which are under registration or delivered. EESL’s current focus is to develop a robust supporting infrastructure as it will boost customer and investor confidence. We believe E-Mobility is a promising technology with a bright future in the Indian market,” a senior power ministry official said on condition of anonymity.
Under the national e-mobility programme, the centre had expected to save over ₹50 million litres of fuel every year leading to a reduction of over 569,000 tonnes of annual CO2 emissions with the procurement of 20,000 electric cars. The Centre had expected to reduce its mobility bill as well; the estimated per kilometre cost for an electric car was projected as just 85 paisa against Rs. 6.5 for normal cars.