Niti Aayog report envisions a “leapfrog” transformation of India’s transport network
A highly influential think tank in India is recommending that government policy is changed dramatically in favour of EVs, according to Reuters.
Citing a 90-page blueprint seen earlier this week, Reuters reported that the National Institution for Transforming India (or Niti Aayog), a government think tank, recommends slashing taxes and loan interest rates for EVs and opening a 250MWh/year battery plant by the end of 2018. It would also cap sales of ICE vehicles.
The draft report, prepared in collaboration with the US’ Rocky Mountain Institute, foresees all of India’s vehicles as being electrified by 2032, sources told Reuters – an immense shift, which the authors describe as a “leapfrog opportunity.”
Currently, India incentivises both electric and hybrid vehicles. But to reach this target, sales would need to climb to more than 10 million per year in 2030, according to the International Energy Agency (IEA). By comparison, at the end of 2016, the country only had 5,000 on the road.
In emailed response to questions, reported by Bloomberg, the Agency noted that: “It is an ambitious plan nonetheless… Regardless, the exact formulation of the target and the extent of its long-term achievement, it is a good step that will help India to be among the global leaders in deploying a technology that is crucial to temper increasing oil import needs, local air pollution in cities, and limit CO2 emissions.”
Indeed, sources spoken to by Reuters are aware that the shift in policy is unlikely to play well with the existing automotive industry, noting that: “If we accelerate electric vehicle growth it will be a disruption for the auto sector and would require investment, but if we’re not able to adapt quickly we risk being net importers of batteries… There has been resistance from car makers.”
Nevertheless, the report argues that: “A set of fiscal incentives can create a self-sustaining EV market, especially as battery costs continue to decline and bring EVs closer to cost parity, helping India reach its 2020 target of 6–7 million “EV+” and jumpstarting progress towards the central government’s vision of 100% EVs by 2030.”
The report, Transformative Mobility Solutions for India, is available here.