How Delhi’s draft e-vehicle policy stands out

Last year, on November 27, Delhi became the latest entrant to the band of states that have launched electric vehicle/mobility policies by releasing a draft Delhi Electric Vehicle Policy. It joined the likes of Karnataka, Maharashtra, Telangana, Kerala, Uttarakhand and Uttar Pradesh in drafting a medium- to long-term policy to encourage the growth of an ecosystem around electric mobility. Several other states, such as Gujarat, Goa and Andhra Pradesh, are also in the process of framing such policies.

Most of the listed large states, in their policies, primarily focused on the establishment of manufacturing and ancillary industries associated with the electric vehicle ecosystem. Others focused on the regulatory framework necessary to ease the operation of electric vehicles, including electricity supply.

What sets Delhi’s draft policy apart is that while its focus is on enabling the development of an electric mobility ecosystem within the state, it focuses on the state’s role as a regulator of important components of the ecosystem such as a network for private and public charging infrastructure. In addition, the components of the policy target the segments of electric vehicles that have achieved parity in terms of life cycle, total cost of ownership with ICE (Internal Combustion Engine – Diesel and Petrol operated) vehicles.

For two and three wheelers, electric mobility is already at a stage where they can compete with ICE vehicles. Further, the Delhi policy establishes small three-wheeler goods vehicles and public transport, including Intermediate Para Transit (IPT)—rickshaws and taxis as a segment of vehicles which have been identified for electrification by the state. Here, although the draft policy may be considered inadequate in parts with specific focus on electric buses, the state of Delhi has an established track record of state-led transition to cleaner fuels, as demonstrated in the case of the total shift from diesel to CNG buses, taxis and rickshaws in the early 2000s.

The draft has also, for the first time, attempted to fund this transition to electric vehicles through cross-subsidisation as a matter of policy. In the past, Delhi has demonstrated its intent through the establishment of an air ambience fund, funded from a Re 0.25 cess on every litre of diesel sold in India. Established in 2008, this fund is the only such dedicated state-level fund in the country that uses the principle of cross-subsidies, through the mechanism of fee bates to attempt to generate funds to counter air pollution. The 2018 draft Delhi EV policy continues these fee bates, extending the cess to the sale of both petrol and diesel. Also, it attempts to generate further funding for the creation of an EV ecosystem through the “polluter pays” mechanism—graded additional road taxes and parking fees for ICE vehicles.

The primary objective of the draft Delhi Electric Vehicle Policy 2018 is to drive rapid adoption of battery-run electric vehicles (BEVs). So much that they contribute to 25 per cent of all new vehicle registrations by 2023. Other key features of the draft are:

Incentives on vehicles (subsidy) and mobility services

• Waiver on road tax, registration fees, Municipal Corporation of Delhi (MCD) one-time parking fee and auto rickshaw permit fees for e-vehicles
• Only high-powered vehicles (>250W) with lithium ion (and other advanced) batteries eligible for subsidy
• For two wheelers, purchase incentive of 50 per cent of Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME) incentive to be supplemented by top-up incentive of 50 per cent of FAME incentive for two wheelers with swappable batteries. Maximum subsidy of up to Rs 29,000 per two wheelers.
• Existing non-electric two-wheeler owners to get a scrapping and de-registration incentive of up to Rs 15,000 per vehicle for non BSIV vehicles, up to two years of the policy term.
• For e-autos, a purchase incentive of 5 per cent and increase in credit availability. And, existing non-electric rickshaws and autos to get a scrapping and de-registration incentive of up to Rs 15,000.
• When it comes to e-rickshaws, drivers and operators to get access to loans at 5 per cent interest and a purchase incentive of 10 per cent
• For e-goods carriers, a purchase incentive of 50 per cent of FAME incentive for first 5,000 registrations with advanced swappable batteries. Also, an exemption from prohibition on plying and idle parking of light goods vehicles during specified timings within the city.
• Public sector e-bus procurement has a target of 50 per cent of the fleet by 2023 and there will be incentives for operators of private stage-carriage vehicles
• Electric two wheelers can be used for rentals and taxi services
• Open permit system for approved e-autos, with no limits on the number of permits to be issued
• App-based aggregators and taxi service providers to get cash back rebates for short first and last mile connectivity trips

Private charging infrastructure

• Changes in building bye-laws to enable new charging infrastructure: All new non-residential buildings with parking space for more than 10 cars will need to have at least 20 per cent parking accessible to chargers and a 100 per cent access in such residential buildings, co-op, group housing societies and colonies managed by Residents Welfare Associations (RWAs)
• For existing residential building owners, RWAs and co-op group housing societies, as well as non-residential building owners and market associations with similar parking space, subsidy to install one charger for every three cars.
• For the first 10,000 charging points, a 100 per cent grant for purchase and installation of up to Rs 30,000
• Tariff for private charging infrastructure: Rs 5.50 per kWh with time of day rebates

Public charging and battery swapping infrastructure

• This is to ensure public charging facilities within 3 kms from anywhere in Delhi. 11 charging energy operators (EOs) will be selected to set up multiple regular and fast chargers
• For both charging as well as battery swapping, concessional locations will be made available to selected EOs at public parking zones. In addition, a capital subsidy covering cost of chargers and installation expenses will be provided.
• For battery swapping, three battery swapping operators (BSOs) will be selected to set up swapping stations with charged batteries
• For swapping, the BSOs will be reimbursed 100 per cent of net state GST for purchase of advanced batteries

Battery and vehicle recycling

• EOs and BSOs will serve as end of life battery recycling agencies. EV owners can deposit unusable vehicle batteries with them and get a remunerative price for it. Disposal in any other manner will not be allowed
• A nodal agency, which is yet to be appointed, will purchase these used EV batteries from EOs and BSOs and then re-use them as power banks to store renewable energy by auctioning to renewable generators
• EV batteries that cannot be re-used to be sent to recycling facilities

Funding

• All petrol and diesel-powered vehicle users will pay a pollution cess on the sale of fuel beginning with April 2019. A higher cess will be levied on diesel, being a more polluting fuel and a known carcinogen, and the existing diesel cess will be subsumed under this
• An air quality parking surcharge will be levied on base parking fees on all non-electric vehicles
• Additional road taxes will be levied on diesel and petrol vehicles
• A congestion fee of up to 2.5 per cent on fare will be levied on all cab aggregator and taxi trips. This tax will be waived for rides taken in an e-two-wheeler, e-auto or e-cab
• All these sources will come under the umbrella, non-lapsable State EV Fund. Any gaps left after all of the State EV Fund is utilised, will be filled either through allocations from the Environment Compensation Charge already being collected in Delhi or through budgetary allocations from the GNCTD.

(The author is a senior research associate with the Clean Air and Sustainable Mobility team at New Delhi-based non-profit Centre for Science and Environment)

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