Government plans on electric vehicles are non-starters: CSE

Analysis of the first phase of FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicle) programme says the agenda of electro-mobility is going nowhere. It has only pushed mild diesel hybrid cars. 

  • Centre for Science and Environment presents its latest analysis here today at a stakeholders’ round table meeting.

  • Almost 60 per cent of the FAME incentives have gone to mild diesel hybrid cars that already enjoy substantial excise cuts. Electric and strong hybrids have remained neglected.

  • 95 per cent of all four-wheeled vehicles sold under this programme have been mild diesel hybrid versions; a mere 3 per cent have been strong hybrids and 2 per cent, electric cars.

  • Defeats the original purpose of promoting electric vehicles. Undercuts the fuel efficiency and emissions-saving benefits of the programme. Has not worked for public transport at all. 

  • Blurs the power ministry’s vision of 100 per cent electric vehicles by 2030.   

  • No course correction done to ensure that the programme works for strong hybrids and battery-operated electric vehicles.  

  • Urgent intervention needed to plug this loophole -- let the policy work for electro-mobility, mainly for public transport. 

New Delhi, March 3, 2017: Centre for Science and Environment (CSE) released an analysis here today which shows that the FAME programme (Faster Adoption and Manufacturing of Hybrid and Electric Vehicle) of the Government of India to promote electro-mobility in the country has only ended up hard-selling mostly mild diesel hybrid cars. In 2015-16, of the amount of Rs 70 crore spent on incentives -- Rs 40 crore, or 57 per cent -- was spent on diesel mild hybrids. 

Said Anumita Roychowdhury, executive director-research and advocacy, CSE: “These mild hybrids are a marginal improvement over conventional diesel models, and are much cheaper than electric vehicles. The main purpose of scaling up strong hybrid and electric vehicles for the big transition towards clean and zero emissions has not taken off.” 

“Worse, this programme has not worked for public transport at all. No incentives have been given to either electric buses or three-wheelers,” she added.

This directly contradicts the policy vision of the Union power minister Piyush Goyal -- to have 100 per cent electric vehicle sales by 2030; or the target set by the National Electric Mobility Mission to have six-seven million electric vehicles by 2020. Even though this segment of electric and hybrid vehicles is still a low volume one – with only 1.3 per cent market penetration -- it is an important step needed in the longer run to clean up the air, reduce climate impacts and secure energy. Globally, even though penetration is still about 3 per cent, strategies are being defined for much quicker transition. 

“This demands immediate course correction as tax payers’ money used for incentives for electric mobility, is only bringing mild hybrids that are only 7-15 per cent more fuel-efficient than comparable conventional diesel models.  This forgoes the benefits of improving fuel efficiency that can be as high as 32 per cent in the case of plug-in-hybrid cars and 68 per cent for fully electric models,” said Roychowdhury. 

As much as 60 per cent of the incentives have gone to support minimal improvements, point out CSE researchers. Instead of tying this up as incentive to promote mild diesel hybrids, the same amount could have been spent on infrastructure for electric vehicles and strong hybrids to improve the effectiveness of the overall programme. The skew in sales of mild diesel hybrids is more pronounced in Delhi where Supreme Court directives to first ban and then impose 1 per cent pollution cess on big diesel cars has slumped the sales of conventional diesel vehicles. 

It may be noted that the notification from the Ministry of Heavy Industry defines mild hybrids as ‘those that have minimal application of electric energy and use regenerative braking power only to assist the motor to start from the stationary position’. These vehicles cannot run on electric power. A strong hybrid vehicle has a provision for off-vehicle charging and a rechargeable energy storage system. A strong hybrid with an electric drive train allows more significant fuel and emissions saving. 

Fully battery-operated electric vehicles are powered exclusively by an electric motor whose traction energy is supplied exclusively by a battery in the vehicle which has a ‘electric regenerative braking system’. These have zero tailpipe emissions. Pollution-challenged cities in a climate-constrained world can benefit from quicker transition to electro-mobility. But the roadmap is currently very fuzzy, say CSE researchers. 

Key findings
FAME programme promotes mild diesel hybrid cars instead of strong hybrids and electric vehicles -- regressive

According to the data submitted by the Department of Heavy Industries to the Lok Sabha, of the incentives given under the FAME programme 81 per cent have gone to cars and 19 per cent to two-wheelers. Of the cars, 57 per cent are mild diesel hybrids. Only 14 per cent are electric vehicles. As diesel mild hybrids get preference, there is very little innovation and market strategy to hardsell strong hybrids and electric vehicles. 

Diesel mild hybrid vehicles that are a lot less fuel-efficient than plug-in hybrids and electric vehicles are already enjoying excise duty cuts. These are now being proposed to get super credits under the fuel economy regulations for cars (to be implemented this year). These are well established technologies and have seen substantial market penetration within a year; they do not require incentives for market development. Moreover, at this stage, diesel-based mild hybrid car models have lead acid batteries that are extremely polluting.

Incentives for these vehicles will not only lower the effectiveness of the electro-mobility programme but also ramp up massive dieselisation which is a source of highly toxic and cancer-causing emissions. “This is a regressive step when cities are battling toxic risk from growing dieselisation,” says the CSE analysis. Incentives should be given only for super-efficient and zero emissions vehicles – such as plug-in hybrid electric vehicles and pure electric vehicles -- with high incremental cost, says the analysis. 

Delhi leads the transition
Though overall sales volumes of such cars in the country are not much, the majority of the sales happens in Delhi. 79 per cent of diesel mild hybrid during the year 2016 have been sold in Delhi. 

However, 62 per cent of total electric vehicles sold in the country have also been sold in Delhi. 

This has been additionally spurred to some extent by the Air Ambience Fund created from the levy of the pollution cess on diesel fuel sold in Delhi; this is being used for giving subsidy – though its utilisation remains low. There is an opportunity to identify niche areas like para transit, two-wheelers and buses for promoting electro mobility to clean up the air. 

Stop diverting incentives to ineffective solutions
Incentives available for mild hybrids are making total ownership cost even cheaper than the comparable conventional base model. Estimates available from the International Council on Clean Transportation, show that in the case of mild hybrids, the total cost of ownership is about 5 per cent lower than the base model with incentives and 14 per cent higher without incentives. In addition, these cars also enjoy significant tax reduction. In the case of strong hybrid cars, the total cost of ownership is 23 per cent higher without any incentives; and in the case of electric cars 51 per cent higher without any incentives. Clearly, incentives are needed for strong hybrid and electric vehicles that are part of the solution to the challenges of local toxic pollution, energy security and climate change. 

Compromising emissions and fuel saving benefits of the programme
Available information shows that mild diesel hybrid cars are only 7-15 per cent more fuel-efficient than their comparable conventional base models, whereas strong plug-in hybrid cars are 32 per cent more fuel-efficient and fully electric SUV models are 68 per cent more fuel-efficient.  

Fully battery-operated electric vehicles have zero tailpipe emissions. Only emissions from power generation are accounted for while estimating life cycle emissions from electric vehicles. This is influenced by the source of power – coal being the dirtiest compared to hydro and renewable energy. Therefore, the life cycle emissions intensity of electric vehicles can reduce substantially if grid power is cleaned up with more renewable energy infusion aligned with India’s post-2020 climate action plans. Energy source of electricity to run electric vehicles can change flexibly depending on expansion of use of renewable energy. 

Public transport ignored
Not a single public transport vehicle of any kind has been considered for FAME incentive; these are not even included in the list of models that qualify for the incentive. This is strange, as several manufacturers are prepared to roll out these models. Even though manufacturers have come up with bus models there is no framework for uptake of these models. The new programme has remained car-centric. It has failed to see the unique opportunity in India: combining public transport strategy with electro-mobility. 

The way ahead
Clearly, in the name of electro-mobility, cities cannot end up promoting mild hybrid diesel cars even if they are little more fuel-efficient compared to their conventional counterparts. The scheme has to deliver on its intended objective of scaling up strong hybrids and electric vehicles and overall electro-mobility. The ongoing FAME scheme is now going to be reviewed. It is, therefore, time for course correction:

India needs a win-win strategy of linking electro-mobility with public transport – buses, autos, taxis, aggregators, and Metro feeder buses
Average travel distances and trips are short in India and very appropriate for the use of short-range electric vehicles that can run on local routes and allow cost-effective solutions. Similarly, small short- range electric buses can be used as feeders to the Metro system -- this can be made integral to Metro planning and investment. Since bus costs remain high even after giving incentives, what is needed is innovative strategies -- such as support from government to provide upfront capital costs and allowing battery swapping so that limited charging stations do not constrain operations. Feeders and school buses on electro-mobility also need to be planned. 

Target polluting vehicle segments like two-wheelers
Two-wheelers are the Indian dilemma -- affordable, fuel- and space-efficient but very polluting. A zero emissions mandate based on the electric vehicle programme can help address this problem. China has seen a rapid proliferation of electric two-wheelers following a ban in many of its cities on petroleum fuel-based two-wheelers. There can be special focus on delivery vehicles that do high daily mileage. There is also a need for strategy on niche application of electric auto-rickshaws.  

Create a dedicated fund based on polluter-pays principle
E-mobility represents very high cost. It is important to impose a pollution tax on dirty technologies to generate resources at state and national levels to develop relevant funds for financing the cost of transition.   

Design incentives carefully to avoid unintended consequences. Remove diesel mild hybrids from the list of vehicles that qualify for incentives. Link incentives with clear performance targets so that they are significantly better than the fuel economy standards and also enable zero emissions target.  

Need reliable and longer term incentives. But also cap incentives for gradual phase down once technologies begin to get established.

Link electro-mobility with pedestrianisation of city centre etc and public transport access.

Plan and implement charging network 

Provide non-fiscal incentives: Public and private charging; adapt building code; link charging with parking infrastructure etc. 

Ensure safe recycling of batteries. 

For more on this, please contact Vrinda Nagar, CSE Media Resource Centre, at 9654106253/