Chandigarh aims to phase out fuel vehicles, but will there be enough EVs to meet the ambitious targets?

Chandigarh aims to phase out 100% registration of fuel bikes in two years and 50% registration of fuel cars within five years to promote electric vehicles, as per its new EV policy. -However, local auto dealers and civil society members called the policy unjust. They say the EV market in India is still at a nascent stage and yet to pass through the affordability, accessibility, and adaptability tests.

-Experts want governments to focus more on pushing the development of cost-effective EV models and setting up public charging infrastructure rather than forcing consumers to buy EVs by curbing registration of fuel vehicles.

The north Indian union territory of Chandigarh, in its electric vehicle policy released on September 20 this year, aims to phase out fuel-based vehicles and promote electric vehicles by putting restrictions on registrations of the former.

The policy's goal is to accelerate adoption of EVs in Chandigarh which, it says, should contribute to 70% of new vehicle registrations by the end of policy period, which is five years from the date of notification. According to Dharam Pal, an advisor to the UT administrator, this policy, with such targets, is the first of its kind in India.

Chandigarh is among the 20 states and union territories (UTs) that have unveiled their separate policies to promote EV sales so far, after the centre unveiled its first phase of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme (the phase-wise electric vehicle policy), in the year 2015.

According to the policy, Chandigarh will no longer accept registration of the three-wheeler diesel and petrol passenger autos, from immediate effect.

In the two-wheeler category, it is aiming that after two years, 100% of the new vehicle registrations be for electric vehicles. It will target 35% electric two-wheeler registrations in 2022-23, followed by 70% EV registrations in 2023-24 and by the third fiscal year, 2024-25, the aim is to have all new two-wheeler registrations be for electric two-wheelers.

In the four-wheeler segment, for personal cars, the policy has a target that 50% of new vehicle registrations should be electric cars by the end of the policy period (2026-27). The target amount will start with a 10% share of vehicles and increase by 10% every year. In this segment, the policy has also fixed the target to fully shift to e-buses and e-goods vehicles by the end of the policy period.

Overall, in terms of personal vehicles, the policy plans for no more diesel and fuel two wheelers after two years and going down to half the number of fuel-based personal cars in five years by curbing year-wise reduction in their registration and replacing it with the registration of EV vehicles.

The vehicle registration data of the previous financial year (2021-22), in which 17,000 two-wheelers and 26,274 cars were sold, has been taken as the base year to calculate and achieve policy targets.

Through these changes, the policy wants to establish Chandigarh as a "Model EV city by achieving one of the highest penetrations of Zero Emission Vehicles."

Emissions from the transport and mobility sector are a concern worldwide. As of 2018, a little more than a fifth of total CO2 emissions came from the transportation sector as a whole, and 75% of those emissions came from the road vehicles. Non-EV vehicles are considered among the major polluters and the electrification of road vehicles, specifically, is seen as one of the solutions.

The Chandigarh policy has a slew of measures like incentivisation of batteries and assurance to set up 100 charging stations by the end of the policy period with a minimum of one charging point in every parking lot of the city.

But what makes the policy controversial is Chandigarh's quick fix to increase EV penetration by phasing out the registration of internal combustion (IC) vehicles – petrol, diesel, and CNG – when the share of EVs against total fuel-running vehicles as of now, is very low.

As per the central government's transport data available on its Vahan dashboard, the total number of EVs in all segments, currently in use on Chandigarh roads, is 4,048 of the 800,000 total running vehicles as on November 22, 2022. Of these, 2396 (59%) are e-rickshaws and e-autos alone, and the remaining are e-bikes and e-cars.

This makes EV share in the local market just 0.45% – not enough to be considered as an "alternative" to fuel vehicles, which Chandigarh is trying to achieve through its new policy.

A total of 26,274 cars are registered in Chandigarh in 2021-22, which is the base year for the EV policy implementation, a figure obtained under the RTI Act, filed by the journalist in July 2022.

If we consider the current number of registered cars, as the baseline for the policy's goal of a 10% compound increase in the registration of electric personal cars every year, Chandigarh must register at least 2,600 e-cars in the first policy year, 5,200 e-cars in the second policy year, 7,800 e-cars in the third policy year, 10,400 in the fourth policy year, and 13,000 in the fifth and final policy year.

Similarly, there are around 17,000 fuel-run personal two-wheelers, such as bikes and scooters (2021-22 data). in Chandigarh. Using this number for estimations, the UT will have to have 17,000 electric two-wheelers by 2024-25, since the policy targets for 100% share of two-wheelers being EVs by that year.

But the current number of EVs is far from these projections. As per Vahan data, EV registration in Chandigarh was 370 in 2020, followed by 734 in 2021 and is 2,278 in 2022 so far.

"The targets are illogical and do not make any sense when EV registration is still taking baby steps in Chandigarh and elsewhere," said Ranjeev Dahuja, president of Chandigarh Automobile Dealers Federation while talking to Mongabay-India.

He said, "We have no problem with Chandigarh's EV policy except that it puts an ambitious target of increasing EV registration at the cost of curbing the registration of IC vehicles."

He said no other state tried this model because the move is not practical right now. "EV market is growing but not to the extent that it replaces fuel variants in the five-year policy period of Chandigarh administration," said Dahuja.

The federation, representing all auto dealers in the city, has already submitted a representation to the UT administrator, a top Chandigarh functionary, to review its policy and withdraw the capping part.

Dahuja said the current production of EVs is very slow in all segments. The models are limited. There is also a waiting period of three to four months for the delivery of existing models.

According to Sanjay Dahuja, a city-based dealer of Tata cars, Tata is launching the country's first EV model under Rs. 10 lakh range. "We believe it will increase demand for e-cars but also increase the waiting period for delivery since the scale of the production of EVs is not as high as fuel variants," he added.

R.K. Garg, president of Second Inning Association, a body of city residents, told Mongabay-India that Chandigarh's EV policy cannot force those looking to purchase vehicles, to buy e-vehicles, be it two-wheelers or four-wheelers.

He said when it comes to EVs, people still have several doubts about their safety, how it works on highways, and whether there are enough charging stations to make people use these vehicles freely.

"Cost is another factor. All EV vehicles are quite expensive than fuel variants. If vehicles are affordable and easy to use, people will buy them irrespective of any policy," Garg said, asking the local administration to roll it back.

As per the ministry's Vahan data, the total EV vehicles registered so far in the country is 1.7 million. Of this, 0.4 million vehicles are registered in U.P. alone, which is 1% of the state's total registered vehicles.

Delhi has 0.18 million registered EV vehicles, 1.31% of its total registered vehicles. On the contrary, EV vehicle registration in Chandigarh against its total registered vehicles is 0.49%.

When asked if it is justified to push EVs by curbing the fuel vehicles when demand for EVs is not sufficiently high, the director of the Environment Department, Chandigarh Debendra Dalai, told Mongabay-India, "Somewhere, we have to draw a line for the sake of the environment protection."

Dalai said people have already started buying e-two-wheelers. There is some problem with four-wheelers, but the EV market is expanding with new affordable models coming up. "The targets fixed in the policy are very much achievable. We will, however, keep fixing issues as and when they come," Dalai added.

Experts, however, have a different take. Gagan Sidhu, director of Centre for Energy Finance at Delhi-based Council of Energy, Environment and Water (CEEW), told Mongabay-India, "We have seen EV volumes increased in states where there is no such curb on fuel vehicle registration."

He said several elements, including cost, variety of models, easy viability of finance, ease in travel, and looks of the models, play an important role in the sale and purchase of vehicles.

According to him, the EV market has great potential, and a substantial increase in registration has been witnessed in the past few years. As per data based on the Vahan dashboard, 0.13 million EVs were sold in 2020-21 in India, which increased to 0.4 million registrations in 2021-22. In the first nine months of this financial year, the number has already reached closer to half a million.

But the share of the EV market against total running vehicles is still minuscule. He added that we must develop more affordable EV models to drive growth further in all segments and set up robust public charging stations across every nook and corner of the country.

Sidhu said so far, e-rickshaws and e-two wheelers have the lion's share of EV registration – 90% of total EV registration in India. The share of four-wheelers in total registration is at most 3-4 %, which is where the challenge lies.

As per the Union Ministry of Transport data, under Phase-I of the FAME India Scheme – the total number of charging stations country-wise was 479 as on July 1, 2022. Out of this, 94 such stations are alone in Delhi. Chandigarh has 40 stations, but most of them are not yet operationalised.

Dalai told Mongabay-India that tendering process to make these stations operational is finalised. They will soon start functioning.