Towards Clean Mobility

Delhi’s new EV policy to accelerate uptake

In the past couple of years, a number of states have come forward to issue policies on electric vehicles (EVs) for specifying clear deployment targets for EVs and charging stations, and offering a range of supply-side and demand-side incentives.

The Delhi government recently notified the state EV Policy 2019 to promote electric two-wheelers, shared transport vehicles, goods carriers and freight carriers since these contribute to the majority of vehicular pollution. The draft Delhi EV policy was issued in November 2018, and was put up for comments and suggestions in the public domain. Various rounds of stakeholder consultations were held before the finalisation of the policy.

The new policy aims to achieve 25 per cent of all new vehicle registrations by 2024 from battery EVs (BEVs). Currently, electric two-wheelers constitute 0.2 per cent of the annual two-wheeler sales, and electric cars make up 0.1 per cent of car sales in the state. Meanwhile, the sales of electric three-wheelers, including autos and goods carriers, are near to nil.

To incentivise the purchase of EVs, the new policy provides fiscal incentives ranging from Rs 5,000 per kWh to Rs 30,000 per kWh. To strengthen the charging infrastructure, the policy envisions setting up public charging/battery swapping facilities within 3 km travel from anywhere in Delhi. In the next one year, it underlines the need for inducting 35,000 EVs in the category of two/three/four wheelers and buses, and another 1,000 EVs for last mile deliveries. It also aims to set up 250 public charging/swapping stations.

Key highlights

Targets: In the next five years, it aims to register 500,000 new EVs in Delhi. Over their lifetime, these EVs are estimated to cut down approximately Rs 60 billion of oil and liquid natural gas imports. Further, EVs are estimated to mitigate 4.8 million tonnes of CO2 emissions, equivalent to avoiding CO2 emissions from nearly 100,000 petrol cars over their lifetime, and about 159 tonnes of PM 2.5 (fine particulate matter) from tailpipe emissions.

Two wheelers: The policy stipulates a purchase incentive of Rs 5,000 per kWh of battery capacity. Therefore, for an average electric two-wheeler with a 2 kWh battery, the applicable purchase incentive is around Rs 10,000, as against Rs 5,500  currently being offered as subsidy for BEVs by the Delhi Pollution Control Committee. The policy has scrapped the provision of extending an incentive of up to Rs 5,000, which was subject to a matching contribution from the dealer or original equipment manufacturer. It has allowed ride-hailing service providers to operate electric two-wheeler taxis. This is expected to  enhance clean last-mile connectivity in a big way. For all two-wheelers engaged in last-mile deliveries (such as food delivery and e-commerce logistics), the policy has set a target of adopting 50 per cent electric vehicles by March 2023, and 100 per cent by March 2025.

E-autos, e-rickshaws, e-carriers: The policy stipulates a purchase incentive of Rs 30,000 per vehicle as against no incentive at present. It offers interest subvention of 5 per cent on loans and a hire purchase scheme for the purchase of electric autos. A loan with typically 12 per cent interest rate from the Delhi Financial Corporation will now be available at 7 per cent. This is the lowest applicable interest rate on loans for EVs in India. Apart from this, the policy has laid down an open permit system for e-autos, wherein individuals will be given permits on a first-come, first-served basis, subject to the cap on the maximum number of autos permissible in Delhi as per the Supreme Court orders. It has lifted the prohibition on e-carriers for plying and utilising idle parking of light goods vehicles on identified roads of the National Capital Territory (NCT) of Delhi during specified timings.

Four wheelers (e-cars): The policy stipulates a purchase incentive of Rs 10,000 per kWh of battery capacity for the first 1,000 cars, subject to a cap of Rs 150,000 per vehicle. Further, all leased/hired cars used by the state government will be replaced with e-vehicles within a period of 12 months from the date of policy notification.

Buses: The policy states that the subsidy decided by the state government from time to time with a commitment that pure electric buses will constitute at least 50 per cent of all new buses (including smaller buses for last mile connectivity) to be added to the city bus fleet, will continue to be applicable.

Other provisions: All financial incentives provided under the policy will be applicable for both fixed battery models and swappable battery models. Further, the road tax and registration fees have been waived for all BEVs under the effective period of the policy.

Private charging infrastructure: The policy states that all new home and workplace parking spaces will need to be “EV ready”. Further, 20 per cent of all vehicle-holding capacity/parking will be required to be EV ready. The Delhi government will provide a 100 per cent subsidy for the purchase of charging equipment up to Rs 6,000 per charging point for the first 30,000 charging points. The subsidy will be routed through discoms, which will be in-charge of installing chargers.

Public charging infrastructure: The policy aims to provide public charging/battery swapping facilities within 3 km travel from anywhere in Delhi. Energy operators will be invited to set up charging and battery swapping stations across Delhi in multiple phases by pooling and providing locations for charging stations at bare minimum lease rentals. The state government will provide a capital subsidy for the cost of charger installation. Further, 100 per cent of net State goods and services tax will be provided as reimbursement to energy operators for the purchase of advanced batteries to be used at swapping stations.

Implementation: The Delhi EV Policy 2019 will be valid for three years from the date of notification. A dedicated EV cell will be set up within the state transport department for effective day-to-day implementation of the policy. Meanwhile, a state EV board will be constituted as the apex body to ensure effective implementation and monitoring of the policy.

Funding: Funds envisaged under the policy will be sourced from multiple avenues such as pollution/diesel cess, road tax, and environment compensation charge using the feebate concept. These funds will be aggregated under a non-lapsable umbrella, “State EV Fund”. All financial incentives/subsidies will take effect from the date of notification of the policy and will be provided directly to EV buyers.

Conclusion

The targets set under the Delhi’s EV policy are more aggressive in comparison to those in other state EV policies. The policy aims to achieve a significant share of EV mobility in the next couple of years by focusing on demand-side incentives. It offers reasonable purchase incentives to promote EV uptake. Further, initiatives such as interest subvention as well as provisions for ensuring adequate charging infrastructure are steps in the right direction. These are also in line with the union government’s Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) scheme. The policy, however, is not intended to make Delhi an EV manufacturing hub.

That said, Delhi has been gearing up for greater EV adoption. In the tariff order for 2019-20, issued in July 2019, the state regulator reduced the electricity tariff for e-rickshaws and other EVs, at charging stations in Delhi, by Re 1 per kWh for the LT category and by Re 1 per kVAh for the HT category.

In sum, these initiatives, coupled with the new EV policy, are expected to go a long way in promoting EV deployment in the NCT region and in addressing its pollution challenges.

Priyanka Kwatra

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