Sustainable mobility is at the heart of India’s growth story. More than 890 million people expected to live in cities by 2050. The rapid pace of urbanization implies an alarming rise in the number of vehicles plying on the roads – necessitating a concerted push towards electric, sustainable and inclusive mobility solutions for people across the country.
Mass transit: While there has been an ongoing surge in urban population, the modal share of public transport, especially buses, has plummeted over the years. Our focus has shifted from public transport options to personal vehicles – adding on to road congestion, oil imports and to air and noise pollution. Bus supply in India has been struggling to keep up with the rapid growth in demand, with no major expansion in fleet over the past decade. Over 80% of public transport trips in India are still completed by public buses and they carry about 12.86 crore passengers daily. It is obvious that buses are the backbone of urban India’s passenger transport system which enables economic access to opportunities, education, healthcare, and entertainment to the people.
Mass transit, coupled with reliable and efficient first and last-mile connectivity solutions, will be critical in reshaping the way urban India travels. Currently, India has nearly 41,710 buses in cities with over 500,000 population – requiring almost 91,405 more buses for desirable people-to-bus ratio of 50 buses per lakh population. Considering India’s climate targets and the recent price discovery of operating e-buses under the Grand Challenge, (nearly 20% lower than ICE counterparts under an operational expenditure (OPEX) model), the financial benefits of operating environmentally friendly e-buses are clearly established.
While India has started working towards electrifying public transport solutions through novel endeavours like the Grand Challenge (world’s biggest e-bus tender) and now the National E-Bus Program, a plethora of challenges like lack of robust financing pathways, capacity requirements, continue to hamper progress. The need of the hour is to enable systemic changes – eliminating the archaic models Indian transit agencies have hitherto relied upon.
Some of the ways to modernize the system include setting service-level benchmarks to monitor performance systematically, creating a centralized database, automatic fare collection, and introducing innovative financing models tailormade for cash-deficit transit agencies (like dry leasing). Creating a conducive market for private operators with payment security mechanisms and capacity-building are also crucial measures in this unique transitional journey.
Empowering electric mobility: Transport sector constitutes about 13.5% of total emissions in India. The Budget 2023 is a significant step towards the decarbonization of India’s road transport sector – responsible for over 87% of transport sector emissions. This year’s budgetary focus on ‘green growth’ reinforces India’s net zero commitment and further emboldens the country’s decarbonization pursuit. The Budget has offered a bouquet of incentives to spur both supply and demand of EVs like customs duty exemption extension on the import of capital goods and equipment needed in lithium-ion cell production.
Batteries are a critical component of EVs – constituting about 30%-40% of their total cost. Battery manufacturing is one of the most capital-intensive areas in the EV value chain. Our biggest challenges on this front are import dependence and high upfront cost. The Budget has introduced viability gap funding for battery energy storage services (BESS) with a capacity of 4,000 MWh. This will go a long way in making large-scale renewable energy integration with the grid possible and economically viable. This has been considered too expensive and therefore has not yet been able to reach economies of scale. The Budget also builds upon last year’s vehicle scrappage policy, allocating more funds to support the scrappage of old vehicles under the central and state governments like official cars and old ambulances.
Indians still need a fundamental behavioural change that can empower them to make environmentally safer choices. To facilitate this change, this year’s Budget announced a Green Credit Program under Mission LiFE (Lifestyle for Environment) that will incentivize pro-environment choices by individuals and companies such as the adoption of EVs.
The impact of EV transition: Concerted global collaborations are necessary to ensure that this transition towards sustainable mobility is just and equitable, compensating for its cascading impacts across the value chain. The ongoing EV transition, the growth of mobility as a service (MaaS) and greater automation in manufacturing present significant opportunities for job creation and upskilling of the workforce. We must understand the gaps between the current and required skill sets, which in turn, will enable us to effectively plan future skill development pathways. Depending on the vantage point of the value chain and the disparate skilling, reskilling, and educational needs of the workforce, we urgently need differentiated strategies to target both high-skilled and low-skilled jobs in the EV industry.
Cross-sectoral collaborations among academia, industry and government are critical for the holistic development of the EV industry. A common platform for sharing experiences, challenges and learnings can ensure holistic industry growth while encouraging dialogues that promote a green, just and equitable transition to a sustainable tomorrow.
(courtesy: ET Auto)