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We have a responsibility to
protect the rights of
generations, of all species,
that cannot speak for
themselves today. The
global climate change
requires that we ask no less
of our leaders, or
ourselves.
Wangari Maathai
Fossil fuels just lost the race against renewables, Bloomberg Business, http://goo.gl/xJmRfT
i.
ii.
iii.
iv.
v.
vi.
The twentieth century has been the era of energy from nonrenewables mainly because of the ease of use, availability
and the low cost of fossil fuels. However the twenty first
century is witnessing a paradigm shift in energy generation 2
and consumption as a consequence of the negative impact of
fossil fuels on the environment and concerns over climate
change. The shift is also recognized in the global automotive
industry where alternative fuel technologies and battery
electric vehicles (BEVs) are attracting heavy investments 3.
In India, the transportation sector alone accounts for about
one-third of the total crude oil consumption and the road
transportation accounts for more than 80% of this
consumption. It is expected that from 2006 to 2030, three
quarters of the projected increase in oil demand will come
from transportation4. In addition, the World Energy Outlook,
2015 states that fossil fuel based transportation is the
second largest source of CO2 emissions globally after power
generation. This emphasizes the need for alternative cleaner
fuels including electric mobility, especially in India which is
one of the largest automotive markets in the world with a
total of more than 141 million5 user vehicles registered (till
2011).
The increasing fuel consumption increases the demand for
crude oil production. However, the domestic crude oil
production is rather sluggish and the gap between the
domestic production and consumption is widening. It is
expected that by 2020, India will import 92% of all its
consumed crude oil6. This poses a serious challenge to
Indias energy (fuel) security. Therefore urgent measures
need to be taken to decrease the countrys dependence on
fossil fuel. Clearly, electric mobility can help in lowering this
oil deficit where India needs to bring forward the
Fossil fuels just lost the race against renewables, Bloomberg Business, http://goo.gl/xJmRfT
Global EV Outlook 2015, http://goo.gl/M0oH54
4 National Electric Mobility Mission Plan 2020, http://goo.gl/yTejZf
5 Total number of registered user vehicles in India, https://goo.gl/E6HqRY
6 Refer footnote 4
2
3
Background
The NEMMP 2020 is the National Mission that provides the
vision and the roadmap for the faster adoption of xEVs (full
range of hybrid and electric vehicle) and their manufacturing
in the country.
Prior to the NEMMPs release, Ministry of New and
Renewable Energy (MNRE) offered an incentive scheme to
push sales of EVs in India. The scheme was effective from
November 11, 2010 to March 31, 2012 and had a budget
outlay of INR 95 crore (USD 14.6 million7). Although the
incentives were low, the EV market especially in the twowheeler segment witnessed a significant uptake. But
termination of the scheme resulted in steep downfall of the
EV market. After two months of its termination, close to 33%
of dealers reverted to their earlier business and more than
20% closed their shutters 8. A similar trend was observed in
the sales of Indias only EV car manufacturer Mahindra
Reva; number of manufactured units fell by 40% after the
termination of subsidy (see figure 1). This underlines the
need for stability in policy and fiscal incentives if the
government wants to establish a vibrant EV market in India.
600
500
400
300
200
100
0
40%
2011-12
2012-13
Goals
The NEMMP10 targets 6-7 million EVs on road by 2020 of
which 4-5 million are expected to be two wheelers.
According to the NEMMP, successful implementation of the
NEMMP will result in fossil fuel savings of 2.2 2.5 million
tonnes by 2020. This directly corresponds to monetary
saving of INR 30,000 crores (USD 4.61 billion). This will
result in a reduction of 1.3% - 1.5% of CO2 emissions.
According to the NEMMP, there will be a creation of more
than 180,000 jobs that will lead to the economic growth and
a cleaner future.
Incentives/ Support
While the NEMMP envisages investing around INR 22,000
crores (USD 3.38 billion) by a Government-Industry
partnership, the Government shall invest close to INR 14,000
crores (USD 2.15 billion) and the automakers shall invest
close to INR 8,000 crores (USD 1.23 billion). The complete
utilization of those INR 22,000 crores will play a pivotal role
in achieving the target.
The NEMMP was announced in 2013 for increasing the
penetration of EVs in the market and until recently, India has
not witnessed any fund allocations. In April 2015, Union
minister of Heavy Industries and Public Enterprises Anant
Geete launched a scheme for Faster Adoption and
Manufacturing of (Hybrid &) Electric Vehicles in India (also
known as FAME11).
The first phase of the scheme (2015-17) has an outlay of INR
795 crores (USD 122.3 million) of which INR 260 crores
(USD 40 million) is dedicated for the first fiscal year (201516). Although the General Budget, 2015-16 of India has
10
11
Total
260
70
155
Technology Platform
Demand Incentive
10
Charging Infrastructure
20
Pilot Projects
IEC Operations
12
10
Japan
16.32%
Rest of World
29.24%
India
0.41%
United States
41.49%
48
743
2,689
2,799
3,536
6,990
7,584
10,778
21,425
24,419
30,912
40,887
43,762
16
11
2W18
3W
4W
Components
Mahindra Reva
Lohia Auto Industries
Electrotherm
Hero Electric
Avon Cycles
Tunwal Electronics
17
18
12
Figure 619
The blue colored zone signifies the current market of ICEVs; right from the ultra-compact cars to
luxury & sports cars
19
13
20
Sales of Electric Vehicle show impressive growth: SMEV, DNA India, http://goo.gl/ujdu6R
14
Fiscal Incentives
RD & D
33%
34%
Fiscal Incentives
38%
RD & D
47%
Infrastructure
20%
Infrastucture
28%
It seems that India has rightly allocated its share for fiscal
incentives. But where does India stand as compared to the
incentives allocated by different countries? The allocation of
funds in incentives, infrastructure and Research,
Development & Demonstration (RD & D) by different
countries is shown in Figure 9.
India, 41
U.S., 268
France, 157
China, 1,120
U.S., 360
France, 56
Denmark, 10.5
India, 2,833
U.S., 7,500
Spain, 6,720
Japan, 8,200
China, 9,600
India, 33
15
IN FRASTRUCTURE
RD & D (MILLION
(USD)
(MILLION USD)
USD)
Figure 9
16
Indian
Car type
Hatchback
A1 (based on Society of Indian Automobile
Segment
Seating capacity
4
Air conditioner, central locking, CD player, power
Key features
No
INR (Lakh)
Mahindra e2o
Battery Cost
Maintenance cost
Tata Nano
Fuel cost
Capital Investment
17
21
18
Depreciation
Benefits
7.00
VAT
INR (Lakh)
6.00
Registration Tax
5.00
4.00
Net cost of
3.00
ownership
(includes
(includes tax
tax
Depreciation
Benefits
2.00
1.00
Mahindra e2o
Tata Nano
19
20
Electric-cab service Lithium to begin operations in Bengaluru next month, Economic Times,
http://goo.gl/4g1edA
23 Worlds fastest charging electric bus takes 10 seconds to charge, Electric Vehicle News,
http://goo.gl/rrVaMJ
24 ABB unveils ultrafast 15-sec flash charging electric bus, CleanTechnica, http://goo.gl/5TCcNA
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