The Government of Delhi has recently announced a draft, which, if implemented as a policy, would require cab fleets, e-commerce delivery vehicles and food delivery vehicles to be 100% electric by 2030. Delhi's Transport Department has uploaded the policy draft titled 'Delhi Motor Vehicle Aggregator Scheme' on its website and is inviting feedback for the same.
Such schemes are bound to prove to be highly beneficial both from the socio-economic and environmental/climate action fronts in the long run, and fleet operators should also be able to derive these benefits eventually, noted Prateek Rao, Founder & CEO, Zyngo EV Mobility.
He said, 'Through the recently-released Delhi Motor Vehicles Aggregators Scheme, the Delhi Government is pushing all kinds of vehicle aggregators in the city, be it across cab, food or e-commerce delivery, among other segments, to convert their entire fleet to EVs by 2030. We at Zyngo heartily welcome this initiative from the Delhi Government, as we believe it is a step in the right direction; and an excellent initiative with a sufficient timeline to address the ICE to EV switch for last-mile deliveries.'
Though the policy is in the draft stages and looks beneficial at first look, there are certain questions that the Delhi Government might have to answer to ensure that the policy is the right fit for the commoner associated with the EV ecosystem. Many experts are not keen on discussing the policy publicly as they sense there will be changes to the final draft. Notably, Delhi was one of the first places in India to focus on the electrification of vehicles. It was the first state to mandate EVs in government offices.
| Five Questions |
| Not enough EVs are available in India. What does the Delhi Government plan to do for increasing availability of EVs? |
| The cost of owning (Capex) an EV is still big when compared to CNG. What are the plans to address the same? |
| EV financing is a big challenge. How will the government enable financing of EVs for faster adoption? |
| Evaluating an EV's residual value does not have a mandate yet. What happens if an owner wants to sell off his EV? |
| There is a dearth of charging infrastructure. Would drivers spend more time in charging or more time on road? |
EV Availability, Cost Difference, Finance
About 10% of total cars sold in the country are sold in Delhi. There are uncountable bike and car dealerships located across India's capital, but the number of dealerships retailing 4W electric cars is the first challenge to answer. This is followed by the challenge of EV manufacturing and choices available in India, as only a handful of electric cars seem fit to be deployed in the electric cabs space.
If a cab aggregator wants to invest in 200 EVs today, would he be able to source those 200 in one go, asked Anurag Singh, Managing Director, Primus Partners. He said, 'There are only a few players manufacturing even fewer electric cars in the country. There might be a demand and supply mismatch.'
Cab drivers who buy a car and then deploy it under a cab aggregator might also not feel okay investing in an EV which costs upwards of INR 15 lakh, as the CNG variants are available at prices as low as INR 5 lakh. Though the cost of running is entirely different, it, at the moment, seems unlikely to justify the INR 10 lakh difference between the CNG and electric cabs.
'There's a big difference in the total cost of ownership for a taxi operator in owning a CNG and an EV. Though the economics are getting favourable but the difference is still there,' pointed out Singh.
Then comes the problem of EV finance. A lot of established banks, NBFC, and other financial institutions are still not financing EVs. Some of these have pointed out the lack of data available for the EV market as a cause, while others have calculated EV finance as a big risk as there's no formula available to calculate the value of a second-hand electric car.
Taxi owners generally resort to selling off their vehicles if they cannot find business, and it takes just a day or two to sell a second-hand ICE car in the market. The case, keeping in mind EVs, is entirely different as there are almost zero buyers of second-hand EVs in India. Moreover, cab aggregators who finance cars for drivers usually charge a hefty interest rate, which many drivers might not want to avail.
'Since the residual values of EV is yet to be established, and the technology is all over the place, the value of second-hand EV keeps changing by the day. Financing EVs continues to be a problem,' said Singh.
Charging Infrastructure
Charging infrastructure is one topic that has been talked about every then and now, but there seems to be no permanent solution being worked upon for the same. Battery swap, once it becomes mainstream, would solve the range anxiety and charging infrastructure problem for electric two- and three-wheelers, but the problem for electric four-wheelers and bigger commercial vehicles would remain the same.
Deploying battery swap in four-wheelers and bigger commercial vehicles would need deploying robotic arms as the batteries are bigger and heavier.
Anant Badjatya, CEO, SUN Mobility, in a recent battery swap conversation with Mobility Outlook, noted that a car has a 50 kW battery weighing around 350 kg. He said, 'Humans can't lift, and only a robotic arm can, but it is all about its commercials. Battery swapping has good applications in India and other developing countries like Brazil, Peru and Bangladesh because of the higher number of 2/3-wheelers.'
The Delhi Government, to achieve 100% electrification of cabs by 2030, would need to make sure that there are more than enough fast chargers available across the region. Cabs mean business only when they are on the ground and not plugged in chargers. Anything less than 60 minutes of super-charging infra might turn-off drivers from investing in EVs as they would not want to spend more time charging their cars and less time transporting passengers.
'Going forward, we would urge the Delhi Government to further provide impetus to EV adoption by creating adequate infrastructure for charging and parking EVs with minimal charges,' noted Rao. This will enable aggregators who want to take electricity connection to avail of subsidy rates on infra and units. Besides, initiating and promoting easier and better interest rates and fast-tracked financing for EV end users/drivers will help, he added.
Also Read
Delhi's Draft Policy Mandates 100% EV Fleet For Cabs, E-Commerce & Food Delivery
Spearheading E-Mobility: How Delhi Is Taking Lead Over Other States
Delhi Government To Soon Launch Portal For Retrofitting ICE Vehicles To EVs