ICRA Ratings has said that the recent Electric Vehicle (EVs) Policy 2020, finalized by the Government of National Capital Territory (NCT) of Delhi augers well for the overall development of the EV industry. The policy seeks to drive the rapid adoption of battery electric vehicles (BEVs) with the goal of reducing air pollution in the Nation’s Capital. It offers subsidies, waivers, and incentives on the purchase of EVs on one hand and dis-incentivizes the use of conventional viz. Internal Combustion Engine (ICE) based vehicles on the other. The incentives would be offered across segments like electric two-wheelers (e-2W), e-rickshaws (3W), goods carriers, electric cars, and buses and would be incremental to those offered under the FAME-II Scheme.
Commenting on the policy, Mr. Shamsher Dewan, Vice President, ICRA says, “ We believe that the Policy holds multiple attractive propositions for the potential e-2W customers. The concern for deteriorating air pollution conditions in the national capital had already been gaining momentum for the past many years. With a progressive EV Policy in place, the 2W consumers will be able to contribute towards alleviating the situation while benefiting from the lower upfront cost as well as the total cost of 2W ownership. The high upfront cost of the e-2W vis-à-vis conventional 2Ws has been one of the main hindrances for faster e-2W penetration, which will get addressed through the attractive demand incentives under the Policy. While scrappage incentive is first of its kind in an EV policy, industry response to the requirement of matching participation by OEMs/dealers and de-registration of conventional 2W remains to be seen.”
The 2W is the dominant mode of commute in India and with the ongoing pandemic, the preference for personal vehicles is expected to increase further. The subsidies and incentives offered under the scheme for retail consumers and manufacturers could, therefore, give a long-needed push for faster EV penetration and development of this ecosystem in New Delhi. As per ICRA, coupled with the FAME-II incentives, the upfront e-2W prices would become 25-30% lower than conventional 2Ws (for basic models) thereby proving to be a catalyst for accelerated e-2W penetration.
“In addition to sizable cost savings, to both the consumer and the Government (on crude imports), several non-economic factors are also conducive for faster electrification in 2W like lower dependence on commercial charging infrastructure, range per charge meeting daily commute requirements, growing environment, and health concerns, among others,” added Mr. Dewan.
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