To push the adoption of cleaner transportation on Indian roads, the government has implemented a series of policy measures in recent years. Initiatives such as the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) scheme, which commenced in 2015, later extended to 2019 before its revamp as FAME II, now extended until 2024, along with the National Electric Mobility Mission Plan, reflect the government's commitment to fostering a greener and eco-friendly transportation system in the country.
These policies aim to promote electric vehicles (EVs) through two main channels — the production of original electric vehicles by Original Equipment Manufacturers (OEMs) and the encouragement of a retrofitment ecosystem for converting existing combustion engine-based vehicles into electric ones.
However, a critical question arises regarding the feasibility of aggressively increasing EV adoption on Indian roads in the short and medium term. The conversion of a substantial number, potentially 33 crore vehicles, or even a third of that, into electric vehicles by 2030 poses a significant challenge. A feasible solution lies in considering alternative fuels, such as auto LPG, which already has a well-established infrastructure and supporting ecosystem in the country.
Government's cautious approach reflects scepticism
The government's cautious optimism is evident in the adjustment of its targets. Originally aiming for 100% electrification of vehicles by 2030, it has scaled down its ambitions to achieve EV sales for 30% of private cars, 40% of buses, and 80% of two-wheelers and three-wheelers by 2030.
This revised target still entails having a substantial number of 102 million electric vehicles on the roads. However, industry experts estimate that achieving the government's scaled-down target may only reach 8-10% of EV sales by 2030, falling short of the 30% goal.
Colossal transitional investment needs due consideration
The massive transitional investment required, especially for charging infrastructure, is a significant hurdle that merits careful thought and re-evaluation. With an estimated investment of around $180 billion until 2030 and a need for over 2.9 million charging points by 2030, the current infrastructure of approximately 15,000 charging points, including those at homes and workplaces, is woefully inadequate.
Additional obstacles include overcoming financial challenges, real estate costs, and logistical complexities in identifying and installing charging stations for diverse end-user groups.
Inadequate battery infrastructure poses serious questions
The country's insufficient battery infrastructure further complicates the transition to EVs. Inadequate battery quality, faulty battery management systems, and the lack of raw materials like lithium and cobalt hinder the development of a self-sustaining ecosystem domestically, forcing reliance on countries such as China and exposing India to significant politico-commercial risks.
Auto LPG more cost-effective than EV conversion
Moreover, the high cost of EV conversion, ranging from ₹3-5 lakh, compared to auto LPG, is quite a deterrent. State governments exploring retrofitting old vehicles face cost challenges, with the conversion cost equivalent to that of a new vehicle. The absence of a well-established retrofitting ecosystem for EVs further compounds the issue.
Prohibitive cost component adds to end-consumers’ apprehension
Consumer reluctance, driven by the high cost of new EVs compared to Internal Combustion Engine (ICE) vehicles, coupled with concerns about charging infrastructure, service options, range anxiety, and battery costs, contributes to the slow adoption of EVs.
With only a few EVs sold compared to the vast number of existing ICE vehicles, the government's goal of reducing pollution through increased EV adoption appears challenging.
Why auto LPG should be embraced as the ‘Net Zero Hero’
In light of these challenges, adopting auto LPG emerges as a viable solution in the government's fight against transport-related pollution. Auto LPG's zero Global Warming Potential (GWP) and minimal emissions of particulate matter and nitrogen oxides make it an attractive option for the government's low-carbon mobility initiative. Additionally, auto LPG is around 40% cheaper for consumers, and the conversion cost for an ICE vehicle is a modest ₹ 25,000-30,000 compared to the substantial ₹3 to 5 lakh per unit for transitioning to EVs.
The urgency to adopt Auto LPG to address climate change and pollution cannot be overstated, as their detrimental effects continue to worsen. Pollution has significant implications for public health, contributing to a wide range of illnesses and diseases.
Fine particulate matter (PM2.5) and other air pollutants can penetrate deep into the respiratory system, leading to respiratory ailments like asthma, bronchitis, and lung cancer. Moreover, pollutants can exacerbate cardiovascular conditions and have adverse effects on neurological development, particularly in children.
Furthermore, pollution exacerbates climate change by contributing to the accumulation of greenhouse gases in the atmosphere. The burning of fossil fuels releases carbon dioxide (CO2) and other greenhouse gases, leading to global warming and climate disruptions. Rising temperatures result in more frequent and severe weather events, such as heatwaves, droughts, and storms, which have far-reaching consequences for ecosystems, agriculture, and human livelihoods.
Addressing these challenges requires comprehensive and immediate action on multiple fronts. While transitioning to cleaner energy sources and implementing stringent emissions regulations are crucial steps, innovative solutions are also needed to mitigate the existing pollution burden. One such solution is the conversion of vehicles to run on cleaner fuels like liquefied petroleum gas (LPG).
Moreover, the conversion of existing vehicles to LPG helps mitigate the environmental impact of transportation without the need for scrappage or replacement, thereby reducing waste and conserving resources. By extending the lifespan of vehicles through conversion, we can achieve immediate reductions in emissions and alleviate the strain on the environment and public health.
Therefore, the government must pursue a comprehensive approach incorporating both EVs and auto LPG in its strategy for low-carbon transportation in the country. The substantial subsidies provided to the EV sector have not yielded positive results regarding end-consumer price reduction. By extending favourable treatment to auto LPG, such as reducing GST on conversion kits and the fuel itself, and ensuring perpetuity in type approval norms for conversion kits, the government can significantly contribute to its mission of achieving cleaner mobility.
—The author, Suyash Gupta, is Director General at Indian Auto LPG Coalition. The views expressed are personal.
These policies aim to promote electric vehicles (EVs) through two main channels — the production of original electric vehicles by Original Equipment Manufacturers (OEMs) and the encouragement of a retrofitment ecosystem for converting existing combustion engine-based vehicles into electric ones.
However, a critical question arises regarding the feasibility of aggressively increasing EV adoption on Indian roads in the short and medium term. The conversion of a substantial number, potentially 33 crore vehicles, or even a third of that, into electric vehicles by 2030 poses a significant challenge. A feasible solution lies in considering alternative fuels, such as auto LPG, which already has a well-established infrastructure and supporting ecosystem in the country.
Government's cautious approach reflects scepticism
The government's cautious optimism is evident in the adjustment of its targets. Originally aiming for 100% electrification of vehicles by 2030, it has scaled down its ambitions to achieve EV sales for 30% of private cars, 40% of buses, and 80% of two-wheelers and three-wheelers by 2030.
This revised target still entails having a substantial number of 102 million electric vehicles on the roads. However, industry experts estimate that achieving the government's scaled-down target may only reach 8-10% of EV sales by 2030, falling short of the 30% goal.
Colossal transitional investment needs due consideration
The massive transitional investment required, especially for charging infrastructure, is a significant hurdle that merits careful thought and re-evaluation. With an estimated investment of around $180 billion until 2030 and a need for over 2.9 million charging points by 2030, the current infrastructure of approximately 15,000 charging points, including those at homes and workplaces, is woefully inadequate.
Additional obstacles include overcoming financial challenges, real estate costs, and logistical complexities in identifying and installing charging stations for diverse end-user groups.
Inadequate battery infrastructure poses serious questions
The country's insufficient battery infrastructure further complicates the transition to EVs. Inadequate battery quality, faulty battery management systems, and the lack of raw materials like lithium and cobalt hinder the development of a self-sustaining ecosystem domestically, forcing reliance on countries such as China and exposing India to significant politico-commercial risks.
Auto LPG more cost-effective than EV conversion
Moreover, the high cost of EV conversion, ranging from ₹3-5 lakh, compared to auto LPG, is quite a deterrent. State governments exploring retrofitting old vehicles face cost challenges, with the conversion cost equivalent to that of a new vehicle. The absence of a well-established retrofitting ecosystem for EVs further compounds the issue.
Prohibitive cost component adds to end-consumers’ apprehension
Consumer reluctance, driven by the high cost of new EVs compared to Internal Combustion Engine (ICE) vehicles, coupled with concerns about charging infrastructure, service options, range anxiety, and battery costs, contributes to the slow adoption of EVs.
With only a few EVs sold compared to the vast number of existing ICE vehicles, the government's goal of reducing pollution through increased EV adoption appears challenging.
Why auto LPG should be embraced as the ‘Net Zero Hero’
In light of these challenges, adopting auto LPG emerges as a viable solution in the government's fight against transport-related pollution. Auto LPG's zero Global Warming Potential (GWP) and minimal emissions of particulate matter and nitrogen oxides make it an attractive option for the government's low-carbon mobility initiative. Additionally, auto LPG is around 40% cheaper for consumers, and the conversion cost for an ICE vehicle is a modest ₹ 25,000-30,000 compared to the substantial ₹3 to 5 lakh per unit for transitioning to EVs.
The urgency to adopt Auto LPG to address climate change and pollution cannot be overstated, as their detrimental effects continue to worsen. Pollution has significant implications for public health, contributing to a wide range of illnesses and diseases.
Fine particulate matter (PM2.5) and other air pollutants can penetrate deep into the respiratory system, leading to respiratory ailments like asthma, bronchitis, and lung cancer. Moreover, pollutants can exacerbate cardiovascular conditions and have adverse effects on neurological development, particularly in children.
Furthermore, pollution exacerbates climate change by contributing to the accumulation of greenhouse gases in the atmosphere. The burning of fossil fuels releases carbon dioxide (CO2) and other greenhouse gases, leading to global warming and climate disruptions. Rising temperatures result in more frequent and severe weather events, such as heatwaves, droughts, and storms, which have far-reaching consequences for ecosystems, agriculture, and human livelihoods.
Addressing these challenges requires comprehensive and immediate action on multiple fronts. While transitioning to cleaner energy sources and implementing stringent emissions regulations are crucial steps, innovative solutions are also needed to mitigate the existing pollution burden. One such solution is the conversion of vehicles to run on cleaner fuels like liquefied petroleum gas (LPG).
Moreover, the conversion of existing vehicles to LPG helps mitigate the environmental impact of transportation without the need for scrappage or replacement, thereby reducing waste and conserving resources. By extending the lifespan of vehicles through conversion, we can achieve immediate reductions in emissions and alleviate the strain on the environment and public health.
Therefore, the government must pursue a comprehensive approach incorporating both EVs and auto LPG in its strategy for low-carbon transportation in the country. The substantial subsidies provided to the EV sector have not yielded positive results regarding end-consumer price reduction. By extending favourable treatment to auto LPG, such as reducing GST on conversion kits and the fuel itself, and ensuring perpetuity in type approval norms for conversion kits, the government can significantly contribute to its mission of achieving cleaner mobility.
—The author, Suyash Gupta, is Director General at Indian Auto LPG Coalition. The views expressed are personal.
First Published: May 3, 2024 9:23 AM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
