DTE Call For Action: Why is rapid electrification of autos necessary?

Autos play a critical role in urban commuting in small, medium and big cities. But internal combustion-powered autos are high emitters

By DTE Staff
Published: Friday 08 September 2023

Autos play a critical role in urban commuting. They account for 42 to 76 per cent of public transport in medium to smaller cities. In the case of bigger cities, autos act as the second preferred mode of service, particularly for providing last-mile connectivity.

A 2010 study showed that in Delhi 31 to 45 per cent of metro commuters use three-wheeler services as feeders. However, the issue is that internal combustion-powered autos are high emitters — a BS6 standard diesel auto emits close to six times higher particulate matter and two times more nitrogen oxide compared to a BSVI diesel car.

This is where rapid electrification of autos becomes necessary. Other than having environmental benefits, like zero tailpipe emissions and no noise pollution, electric autos have the following advantages:

  • Firstly, it is easy to drive. There is no clutch or a gear system.
  • Better Technology — Electric vehicles in general are more energy efficient than their IC counterparts.
  • Additionally, it has fewer parts compared to IC, thus, less wear and tear.
  • Improved cost parity — Though the up-front cost is still a little higher, but overall TCO (total cost of ownership) of electric autos, considering the FAME 2 and state subsidy, is estimated to be lower than CNG autos in Delhi.
  • Even without subsidies the goods autos can achieve cost parity with their IC counterparts by 2023.

Despite these advantages, the number of electric automakers and their product range is quite limited compared to IC autos. Almost all electric autos use plug-in charging technology, except one or two swapping models found mostly in key cities, like Delhi, Bangalore, etc.

Another key aspect is vehicle range. Current electric auto models have an operating range between 120 and 140 km on a single charge. The operational requirement for an auto driver is around 180 to 200 km per day.

As a result, electric auto drivers lose out on operational hours and revenue. Arranging finances for electric autos is quite limited too. Uncertainty around new technology, an underdeveloped market for second-hand electric autos and the lack of creditworthiness of auto operators fragment the already small market.

Though, several NBFCs and fintech companies have come forward to fill the gap in EV financing their interest rates are much higher than that of conventional banks—around 20-25 per cent.

The loan payback period for electric versions is much shorter too. Night parking-cum-charging is a big concern for the majority of auto drivers as many of them do not have adequate parking spaces near their homes or have access to reliable electricity.

This increases the chances of vandalism and theft. Several incidents of battery theft have already impacted them negatively. Emphasise value engineering — for higher levels of penetration, companies need to do extensive research and product development to reduce battery load, optimise the motor power for better performance, extract more energy from the battery and transfer the energy smoothly to drive the motor more efficiently.

Reduce up-front cost to make electric autos a more attractive option — several OEMs have started delinking batteries from vehicles to reduce cost and providing batteries as a service (BAAS) which allows vehicle operators to pay as they go and batteries are available on rent.

This innovative model helps auto operators in two ways, firstly, by reducing vehicle costs and secondly, by improving battery performance and durability.

Easy financing options — Recently, some NBFCs have started providing financial support in a way that the beneficiaries do not need to pay their instalments of more than Rs 8,000/- a month or Rs 250/- to 300/- a day.

Implement the mandate for new autos to be electric — Delhi has decided to issue all the new or renewed permits to be for electric autos only.

Additionally, Delhi is planning to introduce a motor vehicle aggregator scheme in which phase-wise targets shall be provided for 100 per cent electrification of the aggregator fleet in four years, including electric goods auto.

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