This is the second of a two-part series on Delhi's challenge of private vehicle electrification. Read the first part here.
Electrification of private vehicles is much more challenging than commercial fleets due to the stark contrast between individual choice and corporate mandates. A city like Delhi that has struggled with increasing the adoption of private electric vehicles despite having strong policy framework and incentive mechanism to support electrification is a good case study.
Two prominent tools that can help are a supply-side zero-emission vehicle (ZEV) mandate, requiring manufacturers to increase electric vehicle options, and a demand-side approach like a low-emission zone (LEZ), where entry of high-emission vehicles is restricted, incentivising electric vehicle use.
LEZs provide a practical and immediate tool for directly reducing emissions by restricting high-emission vehicles in targeted zones. It incentivises consumers to switch to cleaner vehicles to avoid penalties, ensuring a faster impact on air quality without relying on the broader adoption of electric vehicles, among other sustainable modes.
LEZs can also help build the case for ZEV mandates, which depend on supply chain readiness and require time to influence manufacturing and consumer markets, by fostering early demand for low-emission options.
The Centre for Science and Environment, a Delhi-based think tank, conducted an impact study of a potential low-emission zone in Delhi to understand the effect of a disruptive restraint measure such as LEZ on commuters of the geography.
An assessment was done based on willingness-to-pay and willingness-to-shift through questionnaire-based surveys, conducted among potentially impacted commuter groups. The area chosen to test the hypothetical LEZ was the central part of the city — the New Delhi Municipal Council (NDMC) area.
The LEZ scenario was designed to restrict BS IV and older vehicle engine types from entering the area, meaning that only BS VI and electric vehicles will be allowed in.
Public transport and park-and-ride zones outside the LEZ areas were also considered viable options to access the area. All other vehicles will need to pay a fee to access the zone. The idea was that a high entry fee can induce a shift towards cleaner modes of transport.
Among two-wheeler commuters, 45 per cent were unwilling to pay a fee to enter the LEZ and would switch to one of the compliant vehicles.
Of the remaining, 28 per cent had inelastic demand, meaning they are willing to pay any cost to continue using their private vehicle due to socio-economic reasons or lack of alternative transport options.
The final 27 per cent expressed elastic demand, meaning they would switch to cleaner modes if the fee exceeded a “critical cost” threshold or the highest affordable travel cost.
Similarly, among daily car commuters, 9 per cent were unwilling to pay anything to enter and would switch to a compliant mode immediately. A significant 65 per cent showed elastic demand and would switch to cleaner modes if the LEZ fee increased above their cost threshold, while 26 per cent had inelastic demand.
Hence two potential shift groups emerged: Commuters unwilling to pay a fee and wanting to switch immediately, and those with elastic demand who would change modes if fees rose above their threshold.
1) Unwilling to pay a fee: Among two-wheeler users, about 40 per cent will shift to electric two-wheelers, no takers for cars. Among car users, 13.3 per cent will shift to an electric two-wheeler and 6.7 per cent will shift to an electric car.
2) Elastic demand: Willingness-to-pay survey reveals that 90 per cent of two-wheeler users will pay a maximum of ₹79 to enter the LEZ and 90 per cent of car users will a maximum of ₹120. In other words, 90 per cent compliance to shift to a compliant mode can be achieved for the respective segments at these prices.
If the LEZ entry cost exceeds Rs 79 for two-wheelers, around 5.2 per cent of two-wheeler commuters would shift to electric cars, while 10.5 per cent would switch to electric two-wheelers. Similarly, if the entry fee for cars exceeds Rs 120, about 21.8 per cent of car commuters would opt for electric cars, and 2.7 per cent would switch to electric two-wheelers.
Demand curve to access LEZ at different price points
Preference towards EVs among private vehicle owners in the event of a priced LEZ implementation
Private vehicle commuters in Indian cities do not pay two components of the journey cost: Congestion cost and environment cost. A demand-side restraint measure such as a low-emission zones is required to discourage the surplus enjoyed by private modes of transport at the cost of public health and urban growth.
By implementing an LEZ Zone, Delhi could not only pave the way for a rapid transition to electric vehicles but also set a transformative precedent in reshaping urban mobility.