Rapid urbanization and transport problems:
- India’s urban population will nearly double in the next decade.
- More than half a billion people will live and work in Indian cities.
- Travel within and between cities will grow exponentially.
- This rapid growth poses several social, economic and environmental challenges.
Converting this into opportunities:
- To convert these challenges into opportunities, India needs to prioritise shared and public modes of transportation and turn to new sunrise industries (like electric vehicles) that can help combat pollution, reduce congestion, strengthen energy security and also create jobs.
Initiatives aimed at transforming India’s mobility system:
- Recently, the Union government approved two initiatives:
- Fame-II: The second phase of the Faster Adoption and Manufacturing of Electric Vehicles scheme
- National Mission on Transformative Mobility and Battery Storage
Focus on electrification:
- Both these actions signal India’s commitment to transforming its mobility system, with focus on electrification as the primary technology pathway to achieve this transformation.
- This focus presents India with a powerful opportunity to emerge as a leader in clean, connected and shared mobility solutions, battery manufacturing and renewable energy integration.
- Renewably supplied electricity can deliver long-term, fixed cost power supply for mobility services throughout the economy, and solar energy can become a transportation fuel.
- Energy security: From the perspective of energy security and competitive advantage too, new mobility solutions will reduce oil import costs, lower trade deficits, and limit vulnerability to oil supply disruptions and process shocks.
- Environmental benefits: Shared, connected and clean mobility solutions will deliver a host of environmental benefits, including cleaner air so Indian citizens can breathe more easily.
Future of mobility in India:
- Addressing the Global Mobility Summit, the Indian Prime Minister outlined a vision for the future of mobility in India based on 7Cs.
- These 7 Cs include: Common, Connected, Convenient, Congestion-free, Charged, Clean and Cutting-edge.
Steps to achieve these objectives:
- Focus on shared electric transportation:
- India’s per capita car ownership is quite low with fewer than 20 vehicles per 1,000 persons (5% of the people), as compared to 900 per 1,000 in the US and 800 per 1,000 in Europe.
- India’s low per capita car ownership affords it the chance to pursue a different model from the western world.
- Our emphasis must be on shared, connected and electric transportation.
- Focus on EVs in two and three wheelers segments:
- Two and three wheelers constitute almost 80% of India’s domestic automobile sales.
- India must leverage this and provide impetus to electrification of these two segments to provide size and scale to India’s e-mobility efforts.
- Push public transportation:
- India must push for public transportation to become the preferred mode of travel.
- At present, India has only 1.2 buses per 1,000 people, which is far below the benchmarks of developing nations.
- Only 63 of the 458 Indian cities have a formal city bus system and 15 cities have a bus or rail based mass rapid transport system.
- Public transport must become the core focus area for municipalities and state governments.
- Creating an ecosystem for EVs:
- As we shift from Internal Combustion Engine vehicles (which have 2,000 components) to Electric vehicles (which have 20 components), India must create a unique ecosystem to encourage and ensure Make in India as far as possible.
- This would require measures, including Phased Manufacturing Programme (PMP) across the entire value chain, and an efficient fiscal and tax structure.
- This ecosystem should also be able to attract global OEMs for manufacturing.
- Promote battery manufacturing:
- Batteries account for almost 40% of the total purchase cost of EVs today.
- Domestic battery manufacturing is a massive market opportunity for India to rapidly enable the transition to EVs.
- India has the opportunity to pursue manufacturing of both battery cells and packs while importing only raw materials.
- With this, India can capture nearly 80% of the total economic opportunity.
- New battery technologies, like solid-state lithium ion batteries, sodium ion batteries and silicon-based batteries, are under development.
- India needs to vigorously pursue research and development in these areas and have a clear roadmap for manufacturing on a mega scale.
- Creating charging infrastructure:
- India’s cities must build charging infrastructure to remove worries over the range the EVs can travel.
- The existing network of our marketing oil companies must be fully utilised to ensure charging facilities in urban areas and highways.
- Innovation: India must therefore explore newer models of swapping batteries and pay as you go, and facilitate startups that are innovating and disrupting status quo in mobility.
- Capacity building: Our IITs and engineering institutions must also include courses on new technologies as an essential component of their curriculum.
- Policies by states: States must drive uptake of these solutions by dynamic models of charging a fee for polluting combustion vehicles, while providing rebates on electric vehicles, and tightening norms of fuel efficiency across vehicle segments.
- Forecasts indicate that EVs prices will drop and can reach price parity with ICE vehicles by 2024.
- A recent report by Morgan Stanley has highlighted that half of India’s car fleet will be EVs and half of all miles driven will be on shared platforms by 2040.
- This is on account of rapid spread of digitisation and mobile telephony and low per capita car usage in India.
- This new sunrise area can emerge as the biggest catalyst of clean environment, lower trade deficit and new jobs for India.
GS Paper III: Indian Economy
India has committed to transforming its mobility system, with focus on electrification as the primary technology pathway to achieve this. Suggest steps towards achieving this transformation.