On August 7, 2020, Delhi took an exciting step toward cleaner air by announcing the much-anticipated Delhi EV Policy. The policy’s notification marks the official start date, which is effective immediately. The policy aims to address the issue of deteriorating air quality in Delhi, which endangers residents’ quality of life and health. One of the major sources of pollution in Delhi is vehicular pollution. According to the emissions source apportionment study conducted for Delhi, tailpipe emissions account for approximately 40% of PM2. In ambient air pollution, 5 per cent of PM10, 20% of NOx, and more than 80% of CO are present. During the policy’s announcement, Delhi Chief Minister Arvind Kejriwal emphasised the importance of implementing measures that will put the city’s transportation system on an energy-efficient and low-emissions path. If the policy achieves its goal of 25 per cent registration of electric vehicles (EVs) in new vehicle sales by 2024, the city will have approximately 500,000 EVs of various types operating. This would result in a reduction of 159 tonnes of PM 2.5 in Delhi and a reduction of 4.8 million tonnes of CO2 emissions, which is equivalent to avoiding CO2 emissions from nearly one lakh gasoline cars over their lifetime.
To address the high initial cost of EVs (when compared to ICE vehicles), the Delhi EV Policy provides demand incentives for purchasing electric two-wheelers, cars, auto-rickshaws, e-rickshaws, e-carts, and goods carriers (L5N and N1 vehicles). The incentives, which include upfront purchase incentives, scrapping bonuses, and loan interest waivers, assist in bringing EVs to cost parity with their ICE counterparts. These incentives provided by the Delhi EV Policy are in addition to those provided by the government of India’s FAME II scheme (which has a budget of Rs 8,500 crore for demand incentives of EVs from 2019–20 to 2021–22).
Policies initiated by the Delhi Government
In addition to financial incentives, the Delhi EV policy includes non-financial incentives such as road tax and registration fee waivers, as well as green-registration plates. Non-fiscal incentives are provided to accelerate demand creation while not putting a strain on the government’s coffers. The policy also employs regulatory tools such as open permits for e-autos, traffic and parking exemptions for e-carriers, and regulatory approval for the operation of e-bike taxis and shared two-wheelers to generate demand for EVs in these various segments.
The policy commits to fostering an environment conducive to the development of private and public charging/swapping infrastructure. The policy includes financial incentives to encourage slow charging (or home charging). Furthermore, the EV charging tariff is kept at Rs 4.60 ($0.061), one of the lowest in India, to encourage the adoption of standardized charging equipment, as the commercial electricity tariff is up to twice as expensive as the EV tariff.
The policy encourages the reuse and recycling of EV batteries that have reached the end of their useful life. Adoption of the targeted number of EVs may result in a massive amount of batteries that must be recycled or used for secondary purposes such as energy storage.
The Delhi EV policy uses the “feebate” concept to fund a large portion of the incentives (i.e., by adopting measures by which inefficient or polluting vehicles incur a surcharge). The policy directs funding to an umbrella, non-lapsable State EV Fund from sources such as pollution cess, road tax, congestion tax, and other sources such as the environment compensation charge (ECC). The policy directs that half of the total pollution cess (Rs 0.25paise/liter of diesel) collected in Delhi be diverted to the State EV Fund, rather than the entire amount going to the Air Ambience Fund. In addition, the policy imposes a road tax and a congestion tax on ICE vehicles. Job creation is a key goal of the EV Policy. It intends to promote skill development in the electric vehicle supply chain in order to create an efficient after-sales ecosystem for EVs in Delhi. Given that the policy aims to promote approximately 5 lakh EVs in Delhi, it has the potential to generate a large number of jobs such as EV drivers, auto mechanics, charging station operating personnel, and so on.
Implementation of the policies till date, by the government
Under the leadership of the Hon’ble Minister of Transport, policy implementation will be led by the Department of Transport and the State EV Board. The leadership will be responsible for reviewing the performance of the policy’s various measures and taking additional measures as needed for effective implementation. The Policy also commits to raising consumer awareness through the creation of a plan which consists of the benefits. Delhi’s EV policy is by far the most comprehensive subnational policy that takes a system-wide approach to promote EV adoption. It places equal emphasis on instilling trust in consumers and industry, while also ensuring that a public scheme like this invests in modes and assets that will benefit everyone equally. This puts it on track for success if the necessary institutional and procedural mechanisms are put in place quickly and efficiently. The policy has served as a model for the development of comprehensive policy frameworks that address new subjects and technologies. The policy is expected to meet and even exceed its stated goals of making the capital EV-ready.