India will need “soft” mandates – that could become more stringent over time – to accelerate electric vehicle (EV) adoption, the Centre’s apex public policy think tank NITI Aayog has said in a new report. To meet the national target of 30 per cent EV sales by 2030, mandates on the sale of certain segments of vehicles such as public buses, freight fleets, and government vehicles could give the market the right signal, according to the report released on Monday.
Noting India’s progress in EV adoption over the years, largely on the back of government incentives, NITI Aayog Member Rajiv Gauba said, “It’s alright to pat oneself on one’s back, but we also have to acknowledge the fact that the adoption of EVs in India is at a slower pace than not only China, but also the US and the EU. Global penetration is about 17 per cent now, whereas we are at 7.6 per cent.”
The report titled ‘Unlocking a $200 Billion Opportunity: Electric Vehicles in India’ said it is “evident that continuation of incentives alone may not help” India reach the 2030 target. “As such it is time to give a stronger push for the shift by introducing some gentle mandates and disincentives which will help signal the required direction more firmly,” it said.
“To avoid any strong backlash, the mandates could be limited to only a certain segment of the vehicle fleet and need not be extremely stringent to begin with… They should become progressively more stringent, and have wider application with time,” the report added.
To begin with, it proposes that the mandates could cover public transport buses, paratransit vehicles (like minibuses), government vehicles, and urban freight vehicles.
“Limiting mandates and disincentives to such vehicles to begin with may not attract opposition but would at the same time, signal the future direction for all. In fact, in early 2000, Delhi had mandated conversion of all buses and paratransit vehicles to CNG. So this kind of mandate is not new in India,” the report said.
At the report release, Gauba said NITI Aayog is not calling for nationwide mandates, which cause “disruption”. “I don’t think that is being advocated. Nothing across the board nationwide. We could persuade or work with large organizations, government departments, and public sector undertakings (PSUs) which have a large fleet of buses and cars – like the Ministry of Defence, the Central Armed Police Forces, and Maharatna companies – that they should purchase only EVs when they replace their existing fleets,” he said.
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Gauba said so far, India has done well on electric two- and three-wheelers. “Some progress (has been made) on buses, progress in cars has been slow and trucks have virtually not taken off,” he noted.
According to the report, India has the highest EV penetration rate in three-wheelers (16 per cent), followed by two-wheelers (5 per cent), buses (7 per cent), cars (2 per cent), and trucks (0.07 per cent).
