India’s electric vehicle story on the verge of imploding

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The minister for road transport and highways, 60-year-old Nitin Jairam Gadkari is a man who does not lack imagination. Barely months into office in 2014, he swung into action looking to re-energise the laggard road construction activity in the country, setting an ambitious 40km per day construction target and bringing in innovative solutions to untangle the bottlenecks. At the same time he has also spearheaded ground-breaking projects like Sagarmala, a multi-billion dollar project that seeks to re-map ports around the country, and Bharatmala, a 50,000km roads and highways project that will connect the economic nerve centres of the country to the far-flung borders and beyond.

Toning down or leaving a project midway isn’t his style. So it was quite out of character when last Thursday he said there was no need for a policy on electric vehicles now after being one of its most active advocates over the last one year.

“There is no need for any policy now,” Nitin Gadkari, minister for road transport, said at a press briefing on Thursday. He was addressing reporters along with Amitabh Kant, chief executive of government think tank NITI Aayog.

It is a volte-face of near epic proportions. Over the last 12 months, the government has been steadfast in its vision of all-electric cars by 2030. On more than one occasion, the grandstanding has come without the necessary groundwork – a clear policy road map replete with incentives on how this vision can be achieved.

Electric cars as a category is still evolving globally and while costs are coming down, they are still very high. Further, for them to become a credible alternative, quick charging infrastructure needs to be in place. On all these counts, India is a laggard. As such, government’s aggression coupled with its lack of preparedness to the level of disruption it would cause, has riled the domestic automobile industry.

Gadkari has been one of the most vocal supporters of electrification of personal transportation in India. At times in his exuberance he has even exceeded his brief as a minister in this aspect. Last September he created quite a flutter when he threatened the industry to start thinking about a future without gasoline and diesel engines. He was speaking at the annual congregation of the industry under the aegis of its lobby Society of Indian Automobile Manufacturers and knew he had the attention of everybody – the who’s who of the industry, bureaucrats and media.

“We should move towards alternative fuel… I am going to do this, whether you like it or not. And I am not going to ask you. I will bulldoze it. Petrol, diesel banaane walon kaa band-baajaa bajaanaa hai,” he said. “You may not like it, but I wish it from my heart that your growth should be less. If this growth continues, I will need to add one more lane to national highways, which will cost a whopping Rs 80,000 crore. If you do not make electric cars yourself, then we will force you to do it.”

Such stern words have been repeated on numerous occasions thereafter. But they havent been matched by action. Only a fortnight before the September address, the government had taken away fiscal incentives for hybrid cars – seen as a bridge between conventional vehicles and fully battery-operated electric cars. The takeaway was that the days of half measures were over and the industry needed to leap-frog to electric cars just like it is being made to leap-frog from BS IV to BS VI emission norms by 2020. The urgency pushed companies like Hyundai and Maruti to announce their plans to launch their first electric cars even though without adequate charging infrastructure they do not stand a chance of success. To that end, a policy for electric cars was awaited and promised with Gadkari himself saying it was ready and only required a nod from the cabinet.

“What we need is just action plans,” said Kant. “Everyday, new technology is coming into the market. Technology is always ahead of rules and regulations. And in India, it becomes very tough to change rules and regulations, so let there be just actions,” Kant said, explaining the reason behind the decision.

The climb down now, puts the ball back in the court of the industry seemingly leaving it free to decide the future course of action. This freedom is something that companies wanted anyway.

“Tell us what is the target for reduction in emissions for cars or the desired improvements in fuel economy to curb dependence on fossil fuel and then let industry decide which technology to go for,” said Shekhar Vishwanathan, vice chairman, Toyota Kirloskar Motor India.

“It’s not a problem if there is no electric vehicle policy,” added R C Bhargava, chairman, Maruti Suzuki India. “The broad message is government is willing to leave it to the industry to chart its course.”

The fear though is that for the sceptics in the industry, Thursday’s pronoucement feels more like a mood swing than an actual softening of stand. There is no love lost between the government and industry on this issue and the prevalent distrust is such that even good news is taken with dollops of salt.

“One day you (government) want us to bring electric cars as soon as possible and also to stop selling petrol and diesel cars. Next day you say, okie there will be no policy on this. Is this a joke?” says a senior industry executive who requested anonymity. “This is not the way any industry can work. If you want us to bring in the change then we need to be assured there will be no knee-jerk interventions in future. I dont think anybody can promise that so we can’t promise anything either.”

The EV story in India is imploding fast even before it can reach the starting line.

Source: BUSINESS TODAY

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