Fleet Financing

Unlocking the billion dollar electric vehicle opportunity for Gujarat

Guest blog by Nitish Arora and Charu Lata

While COVID-19 is an immediate priority for India, actions to reduce harmful emissions, such as the transition to electric mobility, can achieve major gains for public health, the environment and the economy. Indian economy. The state of Gujarat aspires to be a hub of electric mobility and was one of the first states to draft an electric vehicle (EV) policy. Stakeholders are now calling on the state to finalize and publish the Gujarat EV policy to follow market trends and reap the economic, environmental and societal benefits of a robust EV market.

Gufran Khan, Wikimedia Commons

A recent round table, Unlock the billion dollar EV opportunity for Gujarat, hosted by NRDC, CEPT University and Gujarat Energy Research & Management Institute (GERMI), highlighted how Gujarat can harness its strength as a growing automotive hub in the global shift towards electric vehicles.

Highlights of the discussion

Gujarat is committed to advancing electric mobility. Mr. Akhilesh Magal (GERMI) highlighted the initiatives taken by the State so far, including the classification of electric vehicles as a “ sunrise ” sector as part of its 2020 industrial policy, and the establishment of a lucrative incentive structure to bring investments for electric vehicle manufacturing and related industries.

He highlighted how collective industry action can support the creation of the political will needed to quickly formalize EV policy. This can support the establishment of the manufacturing base and pave the way for a reduction in dependence on imports of vehicles and components, by aligning with the “Make in India” and “Atmanirbhar” campaigns. Bharat ”(Autonomous India). The Electric Vehicle Manufacturers Company (SMEV) and stakeholders are also planning to send a letter of support from the coalition to the state government to formalize Gujarat EV policy.

Over 80% of Indian cities are struggling with unhealthy air quality. Shivanand Swamy from CEPT University pointed out that electric vehicles make even more sense for the cities of Ahmedabad, Vadodara, Rajkot and Surat – where air quality has deteriorated over the past five years, and the concentration of fine particles / particulate matter (PM) pollution has almost doubled. Widespread adoption of EVs would reduce exposure to nitrogen oxides (NOx), sulfur oxides (SOX) and PM, thereby improving health outcomes.

Solving the chicken-and-egg dilemma facing charging infrastructure providers. From a stakeholder perspective, EV pricing should be granted infrastructure status and the government should have a long-term political strategy, as it does for manufacturing-related investments. There is no need for tax incentives to bring financial sustainability in the charging infrastructure sector. On the contrary, the government should put in place enablers such as socializing the cost of upgrading the network, ensuring that the energy operator has an adequate electrical load and a land lease to viability rentals. Stakeholders proposed an innovative approach to create a few champion cities, saturating them with charging infrastructure, rather than spreading efforts across the state. This could increase public awareness of EVs and their massive adoption. Fortum, a leading energy operator, has expressed interest in partnering with the Gujarat state government to build charging infrastructure.

Electric utilities play an important role in the transition to electric mobility.

NRDC’s Dr Simon Mui explained how state governments are partnering with electric utilities in the United States and investing heavily in charging infrastructure. There is a tremendous opportunity to integrate the use of renewable energy to power EVs, especially as Gujarat has a growing capacity for renewable energy.

Identify hotspot use cases to jumpstart VE adoption. A targeted approach to high use cases such as fleet operators, e-commerce, and logistics companies can help accelerate the adoption of EVs in B2B use cases. The economics work well here, as these vehicles cover more miles than private vehicles. For widespread adoption of electric vehicles, Mr. Rahul Bhatnagar of Hero Moto Corp, suggested innovative business models such as leasing batteries to separate the cost of the battery (around 40%) from the vehicle. This would reduce the high initial costs of electric vehicles compared to internal combustion engine (ICE) vehicles. Creating ambitious value around EVs can help engage young people as ambassadors to accelerate adoption of EVs.

Holistic policy framework to increase appetite for electric vehicles. In addition to the traditional policy instruments of leveraging tax incentives, stakeholders suggested using non-tax measures to incentivize electric vehicles over ICE vehicles. Low Emission Zone and Zero Emission Vehicle (ZEV) policies have successfully accelerated the adoption of EVs in the US and European markets. In addition, innovative financing instruments can help improve the bankability of projects in the EV sector. Several emerging financial solutions for electric vehicles are presented in the NRDC brief: Stakeholder-driven solutions for financing electric mobility.

NRDC and its partners have released new EV resources

During the discussion, NRDC and its partners released a new fact sheet, Transition to Electric Mobility in Gujarat, focusing on the impacts and benefits of the state’s EV policy. The full Gujarat Electric Vehicle Policy Report is available online here.

Nitish Arora and Charu Lata are electric mobility and clean energy experts working as consultants with NRDC’s India program

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