Not just driving EVs but mobility at large

The budget's near doubling of subsidy allocation under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles-2 (FAME-2) is a clear signal of India's intention to shift to clean mobility. The subsidy will make it attractive for consumers to make the switch and create a market for auto companies to manufacture less internal-combustion-engine (ICE) vehicles. Transport accounts for 14% of greenhouse gas (GHG) emissions. The move to electric vehicles (EVs) will help reduce the sector's GHG footprint.

But reducing the environmental footprint (GHG emissions and pollutants) of the transport sector will require more than a switch from ICE vehicles to EVs. It will also require aggregation of mobility needs. Because road transport accounts for 90% of the sector's energy consumption, the focus is on EVs. But meeting mobility needs through cars and 2- and 3-wheelers will mean a growing vehicle population with growing incomes. The reduction in emissions from EVs will be offset with higher pollution from sources like road-tyre friction and life-cycle emissions. So, as GoI encourages EV penetration, it must encourage cities and towns to set up robust integrated mass public transport systems. Metro rail systems and electric buses are expensive, making wholesale adoption difficult. The government needs to create fuel-agnostic incentives for cities and towns to set up public transport, with a long-term plan with clear milestones for reducing its environmental footprint.

Aggregation of demand will have a beneficial impact on emissions and fuel demand (road transport accounts for 90% of the sector's energy use). The government needs to plan for clean energy-powered vehicles and a system that meets the population's mobility needs at lower environmental cost.