Incentives for localization and easy financing will drive EV adoption

Soma Tah

Sohinder Gill, CEO, Hero Electric Vehicles tells PCQuest what kind of government impetus, policy intervention, innovation, and  localization are needed to foster the manufacturing and EV adoption in India

As a leading player in the E2W space, what kind of opportunities and roadblocks do you see for the EV uptake in India? Do you have any suggestion, which could make the adoption better? 

Given the plans of the government for a majority of mobility to be electric mobility in the country by 2030, both the public and the private sector need to come together to make a robust infrastructure so that we can see substantial adoption of EVs in the country. 

However, there are certain areas where we need swift and major improvements. Two of them are the properly executed charging infrastructure, and rebates for Indian manufacturers matching the localization levels. While a lot has been initiated and actioned in this regard by the government via FAME II and the recently announced Delhi’s EV policy there is a caveat which leaves the low-speed segment from availing such benefits. Since they are the drivers of the whole EV segment and make up more than 90% of the total sales, such benefits will help foster our electrification of mobility goals further.   

Another heartening thing is that ever since the lockdowns, the awareness level in the people with respect to clean and emission-free mobility has certainly increased a lot. We have seen a growing interest among customers who are very interested in understanding the benefits, ease, and convenience of electric vehicles since then, and I feel that is a big boost of morale for the entire EV industry. I am certain this trend will continue even after the lockdown and we are expecting a great run towards the late 2020 and early 2021 and on an upward trajectory from there on as social distancing will continue to be a priority.  

Cost remains the biggest barrier to EV adoption, what kind of policy intervention, govt. incentives, and innovation are needed to overcome this issue? 

There is a different set of requirements for each segment type. We need to look at specific problems and then look for the solutions to those problems. Considering the pressure on government funds due to COVID-19, it may be prudent to go for indirect policy measures such as mandating businesses like e-commerce, couriers, etc. to switch to electric in a phased manner. The government is strongly committed to reviving the economy and bringing back the growth rates to where we were. 

Financing of EVs is low and public sector banks can be told to undertake priority lending especially for the lower-income group customers. Most pertinent, however, from a mass-adoption point of view, would be to allow FAME II (Faster Adoption and Manufacturing of Hybrid and EV) funds for the low-speed category vehicles as well. 

"Allowing FAME II funds for the low-speed category vehicles and priority lending by the public sector banks especially for the lower-income group customers are crucial for speeding up EV adoption"  

We can look for incentives and tax benefits for manufacturers and OEMs who are willing to increase localization levels on their products. This step will not only generate more jobs, increase revenue, reduce reliance on imports but also massively drive down costs of EVs which then will naturally appeal more to buyers.

Additionally, the government could include EVs as a part of the Swachh Bharat campaign to create awareness on the benefits of this category towards the environment. Relay messages on radio, banners, and other platforms to spread the word of switching to electric for a better India and a better planet altogether.  

What kind of innovation are you trying to do in the EV battery space (improving range, reducing form factor and costs, etc.), especially keeping India's power situation and the lack of charging infra in mind?  

Range anxiety is troublesome and setting up guidelines and defined policies in place can help foster the adoption of EVs in India. At Hero Electric we have taken care of these issues. Our entire range comes with high quality Li-Ion portable batteries that can be charged via a 3-pin domestic socket. This eliminates the need to depend purely on a charging station and most importantly, you can charge the battery anywhere, anytime. This has proven to be a great feature for all our customers and helps us not to depend on external resources/support. Also, in the time of social distancing this is a really safe option as customers don’t have to make any visits to the petrol pumps, exchange money, credit card thereby preventing them from any possible exposure to the virus.   

"Providing incentives and tax benefits for manufacturers and OEMs who are willing to increase localization levels on their products will not only reduce reliance on imports but also massively drive down costs of EVs"

Also, after the central govt’s recent announcement regarding the sales of EV’s without batteries, we acted swiftly and partnered with EV Motors for batteries powered by IoT. This will not only help reduce the upfront cost of the EVs and put them at par with ICE counterparts, but will enable customers to track the performance, charge, life, of their batteries allowing them to be more aware and connected with their scooters. These batteries can also be charged by a 3-pin domestic socket. 

Creating a robust EV Charging infra is one of the prerequisites for EV adoption. Could you suggest a holistic solution to the problem? 

Delhi Govt’s recent policy is certainly a step in the right direction and should be emulated by other states and even at the centre as well. The one-of-a-kind scrapping policy is certainly ambitious and will push more customers to look at EVs seriously. Having said that Delhi’s policy also overlooks low-speed electric two-wheelers (E2W) and the policymakers should relook at it.  

Apart from this a standardization in battery shape, size and power should be mandated to allow the battery swapping to really take-off and there is equal opportunity for buyers irrespective of the brand.  

Rebates in the form of no taxation on Indian assembled batteries, components, charging stations, and incentives for ‘Made in India’ products will definitely boost the adoption especially when we are at a stage where we need to make a stronger case for EVs so that people move on from buying EVs to choosing and loving EVs. The need to bridge the gap between ICE and EVs has not been greater. We must make the most of it.  

Also Read:  

https://www.pcquest.com/india-eyeing-ev3030-tag-theres-many-slip/