Sun, Jul 08, 2018 page16

• India eases EV goals as China raises requirements

  ‘NOT SUSTAINABLE’: An Indian government adviser said that he is against large subsidies for electric vehicles, despite the still large upfront cost of owning one

  • Bloomberg
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  India’s shift to electric vehicles (EVs) has to be “gradual,” a government adviser said, signaling that the country might have further watered down its ambitions of having green vehicles comprise about one-third of its fleet by 2030.

  India needs to push for EVs in a consistent manner over a long period of time and ensure that automobile jobs stay unaffected as the country moves toward battery-driven vehicles, National Institution for Transforming India (NITI Aayog) chief executive officer Amitabh Kant said in New Delhi on Friday.

  Cheaper EVs, the costs of which are likely to be on par with internal combustion vehicles by 2026, will push their adoption even without subsidies.

  “I’m against a policy where you drive electric vehicles through large subsidies,” he said at a Bloomberg New Energy Finance (BNEF) conference on the future of energy and mobility. “That’s not sustainable.”

  BNEF expects EVs to comprise about 7 percent of sales in India by 2030 as cheap fossil fuel-driven cars dominate the market and state subsidies for electric vehicles are absent.

  That is well below Indian Prime Minister Narendra Modi’s administration’s aim to have more than 30 percent of vehicles run on electricity by 2030.

  “While the inflection point for higher EV adoption in India will come from a fall in battery prices, expected around 2030, India does need subsidies for the next five-seven years as the upfront cost of owning an EV is much higher than an internal combustion engine,” said BNEF India research head Shantanu Jaiswal, who is based in New Delhi.

  India’s policy should be geared toward electric two-wheelers, three-wheelers and public transportation, as it has a relatively low rate of car ownership, Kant said, adding that the government also needs to support the creation of charging infrastructure.

  The country pushed back a deadline to put thousands of battery-driven cars on the road by nearly a year last month, impeded partially by a lack of charging points.

  State-owned Energy Efficiency Services Ltd, which is responsible for procuring electric cars to replace the petrol and diesel vehicles used by government officials, is to roll out the first 10,000 vehicles by March next year.

  It planned to roll out 500 cars by November last year and the rest by last month.

  In related news, China is considering a further reduction in EV subsidies next year as the government pushes automakers to innovate rather than rely on fiscal policy to spur demand for alternative-energy cars, people familiar with the plan said.

  The average purchase incentive per EV might be lowered by more than one-third from this year’s levels, said the people, who asked not to be identified, as they were disclosing information that is not public.

  Vehicles could be required to be able to go at least 200km on a single charge to be eligible for incentives, up from 150km, the people said.

  The plan is still under discussion and subject to changes, they said.

  The Chinese government spent 6.64 billion yuan (US$999.62 million) last year funding consumers’ purchases of EVs, while Chinese cities and provinces separately offer incentives to make electric cars more appealing.

  “China is switching away from carrots,” BNEF analyst Ali Izadi-Najafabadi said. “The government wants to ensure automakers will launch models that would be appealing to consumers, hence setting subsidies contingent on minimum driving range requirements.”
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