Opinion piece by Prasad Sreeram – CEO and Co-Founder, COGOS Technologies
Climate change is one of the biggest issues faced by mankind right now and the biggest contributor to global warming and temperature rise is the continuous exploitation of fossil fuels and its continuous usage in small and medium-size vehicles. India has also opted for quick measures and created various goals under FAME-II where we have planned to sell more than 10 lakh units of EVs by 2022. The target looks a bit ambitious right now especially due to the slowdown after the pandemic but the policies and infra support offered by various state governments recently make the targets look achievable.
Right now progressive logistics companies are looking towards replacing 30% of their existing fleet with EVs by 2030. 30% is a big number and it will surely take some time. The companies are not doing this just for the sake of the environment, yes obviously everyone needs a clean environment for themselves but the increase in cost of logistics whether it fuel prices, increasing taxation on commercial vehicles have made them turn their focus more on EVs. Where the Cost of EV is much higher, the operating cost is lower keeping the longer term EV’s have been in focus.
If we look at the vehicle distribution in the term of sales, commercial vehicles would be somewhere around 30% as compared to the rest of the vehicles, however commercial vehicles travel the most as compared to the personal vehicles and if we can have infra and policy to support the adoption of EV in the commercial vehicles segment, then it would automatically be there for the personal vehicles.
Let us look at some of the important points which can further increase the EV adoption in India:
Vehicle Financing and Subsidies: One of the prime reasons of people being hesitant to switch to EVs are its costs. EVs are very costly as compared to normal vehicles running on fossil fuels. Various state governments have already started putting their efforts to reduce the costs like exempting road tax, subsidies on interests, scrapping incentives for old vehicles etc. But we think the work will not be complete if we don’t come up with a national level policies which are not limited to certain states only.
Charging Infrastructure: The government has already announced that it will be mandating oil marketing companies to set up charging stations on their outlets but this needs to be taken up on a very high priority if we are really looking to transform how India ships and How India drives, the effort put in by the government has been extremely gracious and we are hoping they would be taking some more steps towards that.
Automobile Manufacturers to go for backward integration: There is a huge opportunity for automobile manufacturers to turn their head backwards and look towards energy as a business. The government has already announced that automobile manufacturers can sell EVs without batteries that will help in reducing the vehicle cost drastically but what if automobile companies come up with their own battery swap outlets and thus removing the need of charging the vehicles.
Expectations from Union Budget 2021 for the EV industry specifically for the commercial vehicle segment would be more on creating a national policy regarding scrapping incentives and road tax exemption for EVs and creating a bouquet of cheaper financing options for logistics companies and original equipment manufacturers.
By Prasad Sreeram – CEO and Co-Founder, COGOS Technologies