 "Is the government investing too much on electric vehicles?")
The government is taking a number of pro-electric vehicle (EV) measures in order to reduce vehicular emissions, but are they even worth the cost and effort? After all this strategy does seem to be in line with the National Electric Mobility Mission Plan (NEMMP), via which the government had targeted to achieve 6-7 million sales of electric and hybrid vehicles in India by 2020 and achieve national fuel security by promoting hybrid and electric vehicles in the country.
While we do see success indicated by negative net import figures, a fundamental question remains: are EVs worth investing in? In an insightful article on the government’s shift to EVs by Shreeshan Venkatesh from Clean Mobility Shift, there are a total of 847,544 vehicles under the state and central government departments in India, and up until this announcement only the Delhi government had announced 100 per cent EV fleet for its officials. According to the Bureau of Energy Efficiency (BEE), a total of 6,586 Public Charging Stations (PCS) are operational in India as on 21st March 2023, and a state-wise distribution shows that Delhi has the highest number of PCS (Uttar Pradesh comes fifth following Karnataka, Maharashtra, and Tamil Nadu).
These figures suggest 0.001 PCS per km of a motorable road in India. To put things in perspective, there are about 0.01 petrol pumps of the same metric, ten times more! So, while data at first glance might suggest a good ratio of the number of EVs to PCS, their availability is sparse giving rise to a catch-22 situation while investing in new PCS.
The minimum expense, assuming the existing fleet was to be retrofitted with EV systems, is Rs 4,00,000 per vehicle. 842,459 vehicles in the government’s fleet are yet to be EV-fied. That would amount to Rs 3,36,983 crores of taxpayer money.
This number would be higher if the cars were to be replaced by a new EV and if we factor in the tax subsidy by most states. About six times more rare minerals than conventional cars are utilised in electric cars due to the nature of their battery and these need to be refined, requiring three to four times as much energy to make as compared to copper or steel. Till this year’s budget, there was a heavy reliance on China and other east Asian countries for Lithium batteries, but now the government is set to exempt the capital machinery required for battery production in India in order to produce batteries locally. China sits on a huge reservoir of minerals essential for making lithium batteries (the preferred batteries for EVs), mainly cobalt (41 per cent of the world) and lithium (28 per cent of the world). These batteries are different from the conventional lead-acid batteries used in non-electric vehicles, which are only sufficient to power the engine and various electronic accessories in the car.
Lithium batteries are strong enough to power the vehicle in a manner similar to how our smartphones are powered. Apart from adding to the cost in terms of decreased revenue, lithium battery refining causes air pollution and toxic waste production which must be disposed of underground or special structures in the ocean. Experts suggest that costs shoot up as more sustainable methods to process battery minerals are used. In this respect, China benefits from the relaxed environmental regulations that make it the perfect breeding ground for low-cost lithium batteries. Due to less stringent policies and vast mineral resources in China, it would be extremely difficult for the homegrown batteries to compete and abide by the environmental regulations in India unless India does what China did to grow policy-wise -- keep foreign competition out.
While we do see success indicated by negative net import figures, a fundamental question remains: are EVs worth investing in? In an insightful article on the government’s shift to EVs by Shreeshan Venkatesh from Clean Mobility Shift, there are a total of 847,544 vehicles under the state and central government departments in India, and up until this announcement only the Delhi government had announced 100 per cent EV fleet for its officials. According to the Bureau of Energy Efficiency (BEE), a total of 6,586 Public Charging Stations (PCS) are operational in India as on 21st March 2023, and a state-wise distribution shows that Delhi has the highest number of PCS (Uttar Pradesh comes fifth following Karnataka, Maharashtra, and Tamil Nadu).
These figures suggest 0.001 PCS per km of a motorable road in India. To put things in perspective, there are about 0.01 petrol pumps of the same metric, ten times more! So, while data at first glance might suggest a good ratio of the number of EVs to PCS, their availability is sparse giving rise to a catch-22 situation while investing in new PCS.
The minimum expense, assuming the existing fleet was to be retrofitted with EV systems, is Rs 4,00,000 per vehicle. 842,459 vehicles in the government’s fleet are yet to be EV-fied. That would amount to Rs 3,36,983 crores of taxpayer money.
This number would be higher if the cars were to be replaced by a new EV and if we factor in the tax subsidy by most states. About six times more rare minerals than conventional cars are utilised in electric cars due to the nature of their battery and these need to be refined, requiring three to four times as much energy to make as compared to copper or steel. Till this year’s budget, there was a heavy reliance on China and other east Asian countries for Lithium batteries, but now the government is set to exempt the capital machinery required for battery production in India in order to produce batteries locally. China sits on a huge reservoir of minerals essential for making lithium batteries (the preferred batteries for EVs), mainly cobalt (41 per cent of the world) and lithium (28 per cent of the world). These batteries are different from the conventional lead-acid batteries used in non-electric vehicles, which are only sufficient to power the engine and various electronic accessories in the car.
Lithium batteries are strong enough to power the vehicle in a manner similar to how our smartphones are powered. Apart from adding to the cost in terms of decreased revenue, lithium battery refining causes air pollution and toxic waste production which must be disposed of underground or special structures in the ocean. Experts suggest that costs shoot up as more sustainable methods to process battery minerals are used. In this respect, China benefits from the relaxed environmental regulations that make it the perfect breeding ground for low-cost lithium batteries. Due to less stringent policies and vast mineral resources in China, it would be extremely difficult for the homegrown batteries to compete and abide by the environmental regulations in India unless India does what China did to grow policy-wise -- keep foreign competition out.
Though comparatively emission-free to oil-based vehicles emissions of EVs depend a lot on the quantity of coal burned to charge up vehicles, there is a huge room for improvement in electricity grid technology for truly emission-free vehicles. Coal production in India is at an all-time high and has a lion’s share in the country’s electricity source. The EV fleet revamp, coupled with energy independence would mean most EV charging stations would be powered by coal, which won’t lead to any great improvements in air pollution. In essence, while the heart of policymakers is in the right place, the two objectives of NEMMP could lead to worse environmental consequences given the main source of energy in India is coal. This is further deteriorated by the uneasy relationship with China, which is a world leader in battery production due to its control over minerals and less stringent disposal policies, setting the homegrown batteries for failure unless the competition is curbed. Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper