World Environment Day: Electric mobility is a key enabler to decarbonize the transport sector, say RMI, ICCT & TERI

Press Release

• 03-06-2022

• As per RMI estimates, if all delivery vehicles were electrified by 2030, it can lead to cumulative reduction of 140 tonnes particulate matter (PM) pollution and over 12,000 tonnes of nitrogen oxide (NOx)
• A recent study by ICCT, looking at a 5-year total cost of ownership, found that electric two-wheelers are far cheaper than petrol two-wheelers, even if the petrol rates were to go down to Rs 65 per litre
• As per TERI estimates, in 2030, a strategy involving high penetration of EVs could lead to a 14% reduction in the total energy requirement

June 3, 2022: World Environment Day is a call for raising awareness about protecting the environment, especially in the backdrop of deteriorating ecological conditions. The theme for World Environment Day this year is “Only One Earth” and draws our attention towards the fragility of our unique planet and a need to take concerted steps to preserve it. It is imperative for us to live sustainably in harmony with nature by bringing transformative changes through policies and our choices towards cleaner, greener lifestyles.

India has taken on an ambitious journey to electrify transport. As many as 16 states, including Delhi, Maharashtra, Andhra Pradesh, Karnataka, Kerala, Madhya Pradesh, Tamil Nadu, Telangana, Uttarakhand, Goa, Gujarat and West Bengal among others, have finalized their respective EV policies. It is needless to say that mobility is rapidly evolving globally, and electric mobility is going to dominate the way we travel in future.

The transition to electric mobility is slowly pacing up. According to a government notification, 870, 141 EVs have been registered in India. In 2021, 329,190 EVs were sold in India, representing a 168% increase from 2020 sales of 122,607.

The key roadblocks, however, continue to be adequate awareness about owning an electric vehicle in India, especially an electric two-wheeler. Lack of adequate charging infrastructure and the range of an EVs are the primary concerns which keep one from considering an EV for their next vehicle purchase.

Ms Akshima Ghate, Managing Director, Rocky Mountain Institute (RMI), India, says, “Vehicles are a leading cause of air pollution in Indian cities. Studies have shown that tailpipe emissions contribute to about 40% of PM2.5, 20% of PM10, and more than 80% of NOx and CO in ambient air pollution in cities like Delhi. Electric vehicles present one of the best ways to mitigate these tailpipe emissions and also reduce carbon emissions from the rapidly growing transportation sector. A critical low hanging opportunity where we can see immediate impact of electrification on reducing air pollution - is the urban freight and last mile delivery segment. Our estimates show that registered delivery vehicles in Delhi emitted about 700,000 tons of CO2 in 2019 and if by 2030, all vehicles in this segment were electrified, it can lead to cumulative reduction of 140 tonnes particulate matter (PM) pollution and over 12,000 tonnes of nitrogen oxide (NOx). It is critical that we all endeavour to reduce tailpipe emissions and avoid locking into ICE vehicles for cleaner air in our cities.”

Mr Amit Bhatt, Managing Director for India, The International Council on Clean Transportation (ICCT), says, “At COP26 last year, India pledged to achieve the net-zero target by 2070, and decarbonizing road transport is vital. Research from ICCT shows that electrification of transportation is an excellent strategy for achieving climate goals. Even today, with India's current electricity mix, the benefits will only increase as more and more renewable energy becomes available to power the vehicles. Further, EVs also make economic sense.”

Talking about the cost benefits of owning an electric vehicle in India, he added “A recent study by ICCT, looking at a 5-year total cost of ownership, found that electric two-wheelers are far cheaper than petrol two-wheelers, even if the petrol rates were to go down to Rs 65 per litre. Scaling up charging infrastructure and ease of financing will increase the uptake of electric two-wheelers and contribute to achieving the country's ambitious climate, air quality, and energy security goals because two-wheelers account for 80% of India's annual motor vehicle sales.

Mr Sharif Qamar, Fellow and Area Convenor, The Energy and Resources Institute (TERI), says, “Electric mobility is certainly a key strategy to decarbonize the transport sector. With increasing number of vehicles switching to battery-electric technology, the demand for fossil fuel is reduced significantly helping the country to bring down its dependence on imported fuel and eases the foreign exchange requirement. As per TERI estimates, a significant reduction in overall energy consumption could be achieved as compared to the business-as-usual scenario.”

“In 2030, strategy involving high penetration of EVs could lead to a 14% reduction in the total energy requirement. The benefit is even greater in 2050 with an estimated 26% reduction. This suggests that even a focus on electrification of easier-to-convert segments could yield large benefits,” Mr Sharif adds.

With increasing demand, manufacturing capacity and domestic procurement of vehicle parts, the upfront purchase cost of electric two-wheelers have come down drastically. “Some of the e-2W models compete with petrol-powered two-wheelers, both in terms of cost and performance. The running cost of e-2Ws is significantly low, almost 3-times lower than the petrol vehicles. In addition, e-2Ws do not emit harmful pollutants and contribute in reducing air pollution. The owners of EVs do not have to worry about external shocks leading to rise in fuel price,” says Mr Sharif.

Talking about the financial incentives that are now available for EVs, Mr Sharif says, “There is a certain degree of comfort with the financial institutions in providing loans for EVs, as compared to the scenario 2-3 years ago. Several banks have started providing Green Vehicle Loan facilities to cater to the rising demand, particularly in the commercial vehicle segment. The proactiveness of e-vehicle manufacturers supporting the customers and helping arrange finance is also witnessed in several case. They have collaborated with potential buyers to understand their requirement in existing EV models and improve the chance of closing loans for vehicle purchase. This has helped reduce risk of financing from the financial institute perspective. The government has been incentivizing the purchase of electric vehicles through subsidies. Another positive point which has pushed the demand for e-2Ws is the low dependence on public charging stations since most of these vehicles are either charged at home or have battery swapping technology. The vehicle users are able to charge the vehicle at their convenience and reduce the range anxiety, which was earlier perceived as a key issue for the penetration of e-2Ws.”

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