Indian auto manufacturers and international oil exporters have been aflutter since India’s government announced plans to make all its cars electric by 2030. “By [that year], not a single petrol or diesel car should be sold in the country,” power minister Piyush Goyal said at a Confederation of Indian Industry session last month.
India’s need for oil has surged as its economy has grown. It’s now the world’s third-largest oil importer, paying $150 billion annually for the resource. A sizeable chunk fuels passenger vehicles acquired by the country’s growing middle class—and the number of cars is only going to increase in coming years. Switching to electric vehicles (EVs) would save the country $60 billion in energy by 2030, according to a report published last week by NITI Aayog, India’s most influential government think tank.
The change would also decrease carbon emissions by 37% by 2030, a welcome development for a country with a severe urban pollution problem. In 2014, the World Health Organization determined that out of the 20 global cities with the most air pollution, 13 are in India. The country’s leaders have made attempts to improve the air quality. In the first two weeks of January 2016, for instance, New Delhi’s government mandated that citizens could only drive their cars on odd- or even-numbered days, depending on the last digit in their licence plate number. While such interventions can help, switching to EVs would have a much greater impact.
While a debate has raged in the US, about whether electric cars really create less pollution than gas cars, it’s less of a concern in India. The root of the US issue lies in the fact that it’s mostly urbanites who purchase electric vehicles, while the coal plants that often provide the electricity to run them are found in more rural areas. This means that while cities see a decrease in pollution with an increase in EVs, the opposite is true for less urban locales near coal plants—unless the EVs are powered by renewable sources.
India’s plan for electric cars, on the other hand, is more tightly bound to its push for solar energy, such that coal (whose use in the country is already declining) isn’t a sticking point. “We don’t see that debate here,” says Ananth Padmanabhan, a fellow at the Carnegie Endowment for International Peace’s New Delhi office. “The reason is likely due to the deep connection being drawn between the future of EVs and the future of solar power, including using EV batteries as storage for solar energy, which helps with grid balancing.” (This pairing of electric cars and solar power, as my colleague Laura Bliss has pointed out, will also likely increase in the US.)
India’s announcement has made waves with the country’s auto manufacturers who are not equipped for such a radical change. There is only one Indian company, for instance, that manufactures EVs. Toyota’s India unit is already lobbying the government to take a less hurried approach to the plan in order to have time to prepare for a dramatically different car market.
The plan also spurred the International Energy Agency to announce that it is reviewing its oil demand forecast. India now joins China in a dramatic push for EVs: China announced in April that by 2025, seven of its 35 million vehicles sold annually will be powered by alternative fuels. Together, India and China currently make up 13% of global gasoline demand. Their shift away from gas cars would “change everything,” writes the University of Michigan professor Juan Cole in Informed Comment:
If we take Asia into account, we can confidently predict that over the next decade and more several million electric vehicles will be sold, putting the American market in the shade…If the US doesn’t get its act together, people may end up driving Indian and Chinese electric cars.
But can the Indian government pull off such an ambitious scheme, especially in such a short period of time?
The 15-year plan laid out in the NITI Aayog report is extensive. It includes limits on the registration of gas cars, subsidies for the EV industry, and the use of taxes from gas car sales to create electric charging stations. Yet critics say the country will need more than the allotted time to create enough number of the stations. “Electric vehicles today can only go a limited distance before requiring recharging,” Tushar Bansal, director at energy consultant Ivy Global Energy Pte, told the Economic Times newspaper. “[This will] be a longer, drawn-out affair as the market will take time to adjust.” And Padmanabhan says that though great strides have been made in India’s use of renewables, “issues such as reliability of solar power still need time to be worked out.”
Moreover, says Padmanabhan, the government must promote more research & development within India for the plan to have a real chance of success. “A convergence of various innovative efforts from Indian and foreign players is what could propel the country toward meeting the 2030 target,” he says, “because more of the same is not going to get us there.”
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