The Modi government is thinking of giving a major push to the environment part from saving fuel. The idea is to promote more electric vehicles. But one should find out if it viable.
Electric vehicles are expensive due to high battery costs, and car makers say a lack of charging stations in India could make the whole proposition unviable.
The proposed policy focuses on electric vehicles, and is likely to also include plug-in hybrids. But it overlooks conventional hybrid models already sold in India, such as Toyota’s Camry sedan, Honda Motor’s Accord sedan and so-called mild hybrids built by Maruti Suzuki.
Hybrids combine fossil fuel and electric power, with mild hybrids making less use of the latter.
In doubling down on electric power India would be shifting away from its previous policy, announced in 2015, that supported hybrid and electric technology.
That could delay investments in India, expected to be the world’s third-largest passenger car market within the next decade, according to industry executives and analysts.
“All these policy changes will affect future products and investments,” said Puneet Gupta, South Asia manager at consultant IHS Markit, adding that most car makers would need to rethink product launches, especially of hybrids.
Mahindra & Mahindra is the only electric car maker in India but has struggled to ramp up sales, blaming low buyer interest and insufficient infrastructure.
Pawan Goenka, managing director at Mahindra said the company was working with the government and other private players to set up charging stations in India. Mahindra was also focusing on developing electric fleet cars and taxis, Goenka said.
The cost of setting up a car charging station in India ranges from $500 to $25,000, depending on the charging speed, according to a 2016 report by online journal IOPscience.
While the proposed policy suggests setting up battery swapping stations and using tax revenues from sales of petrol and diesel vehicles to set up charging stations, it does not specify the investment needed or whether the government would contribute.