Will govt’s all-electric car fleet plan make inroads in India?

The National Electric Mobility Mission Plan (NEMMP) 2020 launched in 2013 aims to achieve 6-7 million sales of hybrid and electric vehicles year on year from 2020 onwards. Further, the Minister for Power, Coal, New and Renewable Energy, Piyush Goyal has ambitiously set an environment-friendly goal of moving the road transport sector on electricity by 2030. The government has been providing fiscal and monetary incentives to leapfrog hybrid technology to ensure complete adoption of the electric vehicle by 2030.

India plans to reduce its crude oil import dependency to 67 per cent by 2022, but recent import trends suggest otherwise. India’s oil import volumes increased by 5 per cent from 202.8 million metric tonnes (mmt) in 2015-16 to 213.9 mmt in 2016-17, while domestic crude oil production declined by 3 per cent; from 33.1 mmt in 2015-16 to 32 mmt in 2016-17. India’s average crude oil import during April 2012-March 2017 stood at $106.8 billion resulting in an average net petroleum import of $73.8 billion. Despite softening of global crude oil prices, India’s crude import remains a major concern.

The domestic transport sector being one of the biggest consumers of petroleum products not only contributes significantly to petroleum trade deficits, but also rising greenhouse gas emissions. To address the above concerns, electric mobility (e-mobility) emerges as one of the best alternatives.

Adoption of electric vehicle technology could disrupt existing business processes, and a value chain of the automobile and petroleum sector. At this juncture, analysts are divided over the impact of disruption on the automobile industry. Some commentators argue that electric vehicles (EV) could lead to a decline of the automobile industry, while McKinsey suggests they could open up additional areas of revenue generation.

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